When can Council impose section 94 conditions on a development consent?

Council’s will often impose conditions on a development consent that require a developer to provide monetary or infrastructure contributions – but can these conditions be legally imposed?

Section 94 of the Environmental Planning and Assessment Act 1979 (NSW) allows for Councils to collect contributions from new developments to build and improve public infrastructure and facilities when land is developed. Councils must develop a Section 94 Contributions Plan (“CP” for short) to plan out what they require from developers to meet future community needs.

A CP is often developed over an extended period of time, and includes consultation with all stakeholders including the community, developers and technical specialists.

Infrastructure can be removed from a CP if the parties see it as unnecessary or excessive. Sometimes, after the CP commences, it may become apparent that the infrastructure was required after all.

To get around this issue, some Council’s attempt to impose a condition on a development consent for a developer to provide infrastructure or contributions beyond what is in the CP.

However, Council has the power to impose a condition of development consent that requires a section 94 contribution only if there is a CP in place that allows for that contribution.

The case of Australian International Academy of Education Inc v The Hills Shire Council considered the validity of a section 94 condition, referred to as “Condition 98”. Condition 98 required the dedication of a part of the site that was identified as local road.

The court provided an instructive summary of section 94. They said that section 94 provided the sole source of statutory power to impose a condition of development consent either requiring the payment of a monetary contribution or requiring the dedication of land.

The court also clarified that the power to impose a condition of development consent under section 80A. The power to impose a condition under this section is restrained to only conditions that are “authorised to be imposed”. This means that Council is not authorised to impose a condition requiring the dedication of land even if a developer volunteers to dedicate land.

Ultimately, the court found that the absence of a CP meant that Condition 98 could not be lawfully imposed against the developer.

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Alyce is a civil engineer and a practicing lawyer, who has a desire to share her insights on the legal and practical realities of the development industry.

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