If you are thinking of entering into a voluntary planning agreement, you should be aware of the legal requirements and obligations involved. These requirements are set out in this article. It also explains what is required to enter into a VPA, how the agreement is registered on title and the misuse that may result from entering into one.
Guidelines for the use of voluntary planning agreements
Voluntary planning agreements, or VPAs, provide certainty and control to developers. They must include the landowner and other parties who are guarantors of specific obligations. They must also consider the possibility of a change of landowner, and must have provisions for assignment. The government has published practice notes that detail the process for preparing VPAs.
Voluntary planning agreements can be structured in a way that provides good outcomes for both developers and local communities. Developers can get more control over works, while councils can have the flexibility to refuse the development if they don’t want it. But, the greatest benefit of a planning agreement is usually for the community surrounding the development, which can get specific public works in return.
Ideally, voluntary planning agreements should only deal with works that are dedicated to the public authority. They should also contain specific obligations on the developer, such as requiring title deeds to be recorded at LPI. They should also contain a robust changes regime, as large projects often change in timing or delivery. As such, it’s critical that the developer and local authority negotiate in good faith.
A voluntary planning agreement should not be a substitute for a contributions plan. The agreement should address development standards and the planning objectives in the development standard. In some cases, financial security may be unnecessary. In other cases, a planning agreement may not be a sufficient substitute for a contributions plan.
Whether a development is acceptable or not depends on the planning authority’s standards and guidelines. The terms of the agreement must reflect the requirements of the planning authority and local community. It should provide positive public benefits and meet the planning authority’s spending limits. It should also provide for effective formal public participation.
A voluntary planning agreement (VPA) is a legal agreement between a developer and a planning authority. It must be in writing and signed by all parties. If the agreement includes monetary contributions, they must be consistent with the terms of a development consent or the changes sought by the environmental planning instrument.
Registering of voluntary planning agreements on title
Voluntary planning agreements are often registered on title. This requires that they deal with subsequent interests and be available for public inspection and comment for 28 days. The new practice note also suggests getting formal authority from secured financiers sooner in the process. However, many secured financiers will not examine a voluntary planning agreement until it is completed.
A voluntary planning agreement can also include monetary contributions over and above the development contribution cap. It can also contain a guarantee of compliance. When a developer enters into voluntary planning agreements, they are typically seeking to mitigate the adverse impacts of their project on the surrounding community. The developer will often offer these contributions as part of the process of seeking an EPI change or preparing a development application.
The Draft Practice Note requires that each party to a VPA provide written consent before the VPA can be registered. This could delay the execution of the VPA and may be unpopular with proponents. Therefore, it is vital to check whether the new practice note outlines a clear process for VPA registration and the role of council staff in the process.
Voluntary planning agreements are legal contracts that can be signed by both developers and local councils. These contracts are generally used to improve community amenities, such as affordable housing. These agreements can be negotiated during the development application process. This type of agreement can be beneficial to both sides. By registering VPAs on title, developers are ensuring that these public benefits are included in the development of the property.
The policy should ensure that VPAs are used responsibly. This is particularly important when it comes to community benefit. While voluntary planning agreements are relatively new in the planning system, they are a new way to secure developer funding and valuable community benefits. As with any other form of bargaining in the planning system, the key concerns with VPAs are governance and probity.
The law has a very specific definition of a voluntary planning agreement. It is a document that requires developers to make a certain amount of development contributions. These contributions are generally in the form of monetary payments or the dedication of land for a public benefit. The developer is required to meet certain requirements set out in the planning agreement, such as a statutory certificate. In some cases, the planning authority can also enforce these obligations through a court of law.
Requirements for entering into a voluntary planning agreement
The requirements for entering into a voluntary planning agreement are not set in stone. However, there are some common requirements. One of the most important is that there is no conflict of interest. A development must contribute to the community. This contribution can be a monetary contribution, dedication of land for free, or some other material benefit. There is also an obligation to disclose any costs or benefits associated with a development.
The voluntary planning agreement should be structured in such a way that it meets the needs of all parties. This includes a strong dispute resolution mechanism. This may involve binding arbitration or expert determination. Often disputes can be resolved through mediation, but if this is not possible, then a mandatory binding expert determination may be necessary.
Another important requirement for a VPA is that the developer must agree to contribute to the community. The developer should be willing to meet at least one percent of the cost of the development. Generally, developers can be asked to contribute to community needs by offering affordable housing. As long as this requirement is met, the developer can build on the land.
As well as these requirements, VPAs should not be used for the primary purpose of value capture. This is because this can give the perception that a planning decision can be bought. It is crucial to make sure that the purpose of a VPA is related to legitimate planning purposes as defined in statutory planning controls and other adopted planning strategies. The planning agreement must also guarantee the delivery of public benefits and infrastructure not related to the development.
The practice note for VPAs was issued by the NSW Government in 2005. In November 2016, the NSW Government released an updated draft with a more fair framework for VPAs. However, this draft was never finalised. The current draft of the practice note incorporates the changes from the previous draft and the recommendations of the Kaldas Review.
Potential misuse of voluntary planning agreements
Voluntary planning agreements can be misused by developers. As their name implies, voluntary planning agreements are agreements between developers and local councils over certain aspects of a development. These agreements are only enforceable as a condition for development consent. This means that a local council cannot refuse to grant development consent based solely on the existence of a planning agreement. However, there are a number of reasons why developers should be wary of such agreements.
While many planning agreements are beneficial, many local councils demand financial security, which is unnecessary. In some cases, financial security is necessary because delivery of planning obligations is linked with the issuance of statutory certificates. However, financial security is often required only when this link is broken. In addition, a new practice note states that planning agreements should not be used in place of contributions plans.
Another potential misuse of voluntary planning agreements is to capture value. This can create a perception that planning decisions are purchased. However, this can be avoided by ensuring that planning agreements are not used to capture the land value uplift that follows a rezoning. Rather, they should be used to deliver public benefits and infrastructure that are unrelated to the development.
The use of planning agreements is not limited to development, but also to development standards. This is because clause 4.6 allows a developer to vary the planning requirements. In some cases, these agreements can be used as a way to justify strict application of clause 4.6. Further, voluntary planning agreements should take into account public benefits, which may not be possible with traditional contributions plans. These planning agreements can be a great tool to achieve planning objectives.