New requirement for registered easements for ground anchors under the Design and Building Practitioners – Particulars for Regulated Designs Order 2021
On 10 June 2021, the Minister for Better Regulation and Innovation made the Design and Building Practitioners - Particulars for Regulated Designs Order 2021 (Order) under section 5(3) of the Design and Building Practitioners Act 2020 (NSW) (Act). The Order commenced on 1 July 2021.
Schedule 2 of the Order deals with particulars that apply to regulated designs prepared for building work involving a ground anchor if any part of the ground anchor will extend onto a neighbouring property.
Generally, where a developer or builder is required to install ground anchors under a neighbouring property, they must obtain consent from the neighbour to avoid trespass claims. Consent for installing the ground anchors under the neighbouring property usually occurs in the form of a licence or deed. However, where an agreement between the builders and neighbours is not reached, the builder can apply for a court-ordered easement under section 88K of the Conveyancing Act 1919 (NSW).
The Order has imposed a new requirement on developers and builders of class 2 buildings in respect of ground anchors on neighbouring properties. Section 3(a) of Schedule 2 of the Order specifies that "evidence of a registered easement" over the neighbouring property granting the right to install an anchor on that property is required for such regulated designs. This means that builders and developers will now be required to obtain registered easements for regulated designs prepared for building work involving a ground anchor if any part of the ground anchor extends onto a neighbouring property, rather than relying on a licence or deed to grant them access to install ground anchors.
This requirement does not apply to a neighbouring public road where the relevant roads authority has granted consent under section 139 of the Roads Act 1993 (NSW).
How does this requirement fit into the Act?
Under section 9 of the Act, a registered design practitioner must provide a design compliance declaration to a person if the practitioner provides the person with a regulated design prepared by the practitioner, and the design is in a form suitable for use by that person or another person in connection with building work.
Section 8 of the Act specifies that the design compliance declaration must address various matters, including any matters prescribed by the Design and Building Practitioners Regulation 2021 (NSW) (Regulations).
Further matters to be included in the design compliance declarations are set out in clause 9 of the Regulations. Relevantly, clause 9(1)(c) of the Regulations states that the design compliance declaration must include whether or not the design accords with relevant elements of guidance material for regulated designs that have been approved by the Secretary and published on the Department of Customer Service's website.
NSW Fair Trading published a Regulated Design Guidance Material (Guidance Material) under clause 9(1)(c) of the Regulations, which sets out each class of design and the categories within that class, specifying the minimum requirements.
With respect to ground anchors, the Guidance material states that under the Geotechnical class of design (prepared by a registered design practitioner in the class of structural engineering with geotechnical expertise and/or by a class of geotechnical engineering), the minimum requirement is "compliance with requirements set out in Ministerial Order relating to verification of easements". This is replicated in the Design Practitioners Handbook.
Pursuant to section 19 of the Act, builders must not carry out any part of building work for regulated designs unless they have obtained a design compliance declaration that complies with the applicable requirements set out in section 8 of the Act. Therefore, to comply with the Act, registered design practitioners must address the requirement for a registered easement in respect of ground anchors on neighbouring properties in their design compliance declaration, which is then provided to the builder to enable them to commence the building work.
Further, section 4A of the Act states that regulated designs and compliance declarations required to carry out the building work under a construction certificate must be provided to the Secretary before building work commences under that construction certificate.
Preference for easements
There are many reasons that could justify the preference for registered easements over the use of a licence, including:
- easements carry certain property rights and are a more secure way to obtain rights of access to neighbouring land
- licences do not create any interest in the land
- easements are registered on the title of the property, whereas a licence is not
- if the neighbouring property is sold, the easement transfers to the new owner and remains active
- licences cannot be assigned
- easements can be perpetual, whereas licences only last for a specified period of time
- licences can be terminated by default, whereas easements cannot.
However, while a registered easement may be preferable for the reasons set out above, making it mandatory may create additional challenges for developers or builders as:
- a number of additional parties, including lessees and mortgagees of the burdened land, will be required to give their consent to the easement
- until certificates of title are abolished later this year, the certificate will need to be located for both the burdened and benefited lot and produced at NSW Land Registry Services to allow the easement to be registered
- unlike a licence, which will usually be binding on the date it is executed and entered into, the easement will not be binding until it is registered
- if the easement involves burdening land held by a community, neighbourhood or precinct association, the Community Land Development Act 1989 (NSW) requires that the relevant association pass a unanimous resolution before it can grant the easement
- if the easement involves burdening land held by an owners corporation, the Strata Schemes Development Act 2015 (NSW) requires the owners corporation to pass a special resolution before it can grant the easement.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.