NSW Landowners Stand to Lose Millions: New Law Significantly Reduces Existing Use Rights

Developers who have bought land on the basis of the value of existing use rights could lose millions of dollars because of an amendment to planning laws in NSW. Already developers are seeking advice on whether the legislation can be challenged through the courts.

Landowners’ rights over the use of their sites have been reined in. Slipped in amongst the raft of planning reforms that were passed by the NSW Parliament last Wednesday (discussed in Gadens Lawyers’ March 2006 Update click here... ) was a scantly discussed amendment aimed at curtailing existing use rights.

The amendment potentially impacts on the commercial value of land in NSW that previously had highly beneficial existing use rights. For example, a developer who has purchased an industrial site having existing use rights with a view to converting it into a shopping centre, might not be able to follow through with its plans because of the legislative change.

Existing use rights operate to protect an existing use of land that was lawfully commenced but has subsequently become prohibited by later planning controls.

From 1979 until now, the existing use rights provisions of the Environmental Planning and Assessment Regulations 2000 not only enabled an existing (otherwise prohibited) use to be continued, intensified, or expanded, but the existing use could also be changed to another use which would otherwise have been prohibited. Commercially, this was enormously advantageous to the owner of a site with existing use rights, because the site could be used for any purpose, even prohibited purposes, provided that consent was first obtained.

The new amendments remove the long-standing ability to change an existing use to another prohibited use and hence significantly reduce the scope and value of existing use rights.

Existing use rights now only operate to protect the specific existing use.

Subject to development consent being obtained, an existing use may still be

• enlarged, expanded or intensified;

• altered or extended; or

• rebuilt,

but may only be changed to another use if that use is one that is permissible, with or without development consent under the Environmental Planning and Assessment Act 1979.

These changes to existing use rights will not affect development applications made before 29 March 2006. Any development consent, complying development certificate, construction or occupation certificate arising out of such a development application is also unaffected.
By Anthony Whealy and Christina Renner

This publication is provided to clients and correspondents for their information on a complimentary basis. It represents a brief summary of the law applicable as at the date of publication and should not be relied on as a definitive or complete statement of the relevant laws.