Voluntary Planning Agreements: [Wo….Wo…Wo…] What Are They Good For?
By Justin Cotton, Partner and Head of Practitioner Advocacy at Lovegrove Solicitors
When is an agreement between two or more parties more of a public contract rather than a commercial bargain?
The concept of Voluntary Planning Agreements (or “VPA’s”) is relatively recent and is enshrined in section 93F(1) of the Environmental Planning Act 1979 in New South Wales.
This article will look briefly at the purpose behind and the nature of such Agreements, and what they should contain. More information about what they must encompass is set out in section 93F of the EP&A Act and also in practice notes published by government. These practice notes and the template VPAs they contain are not legally binding, but serve as a guide to the industry.
VPAs have been defined as voluntary agreements or other arrangements between one or more planning authorities and a developer, by which the developer agrees to make public contributions towards a public purpose or objective.
They are entered into when a developer has sought either a change to an environmental planning instrument or if they have made (or propose to make) a development application. The VPA is entered into between the developer and a planning authority (or 2 or more planning authorities) and involves the developer making a development contribution to confer a public benefit as part of the development.
‘Development contribution’, being the provision by a developer under a voluntary planning agreement, can mean a monetary contribution, the dedication of land free of cost or the provision of a material ‘public benefit’. In turn, the term ‘planning obligation’ means an obligation placed on a developer requiring them to make a development contribution.
Further, a “planning authority” is taken to mean (section 93C) either a Council, the Minister, a ministerial corporation or a public authority declared by the regulations to be a public authority.
Public interest is served by utilising fair and enforceable planning controls for the benefit of the community at large and to have equity as between developers. Given the public nature and purpose of VPAs, the parties to them do not have the same freedom of bargaining as is found in a commercial contract. In VPAs, there are always ‘public interest’ and ‘probity’ issues to be considered.
What is the substance of a VPA?
Firstly, a VPA must of course be in writing and signed by all parties to it, and it is not regarded as binding until everyone has signed it. The ‘raison d’etre’ of the VPA will be the consideration for the developer wanting to either modify an environmental planning instrument or to apply for a development consent.
The development contribution included in the VPA can be for any of a range of public purposes, some of which extend beyond section 94 contributions in the Act. For example, the capital funding and possibly recurrant funding of transport, state infrastructure and affordable housing, funding of public facilities provided by Council, the monitoring of public impacts of development, and protection of the environment.
This idea of conferring public benefits by developers involves the developer conferring part of the development profit for a public benefit, it is not just about limiting the costs of development. However, the VPAs should not be entered into outside the planning system in order to secure contributions that are totally disconnected from the development or do not make development acceptable.
A consent authority (eg, a Council) can require a VPA as a condition of a development consent, but the agreement must then be consistent with the terms of the development application (“DA”) or the change actually sought to an environmental planning instrument in connection with the DA.
Planning authorities and in particular Councils should publish policies and procedures concerning their use of voluntary planning agreements, and further the making of a VPA (or any revocation or change to it) may be registered on the title to land. Section 93(H) of the EP&A Act stipulates that a planning agreement that has been so registered under the Act is binding on every owner from time to time of the land as if they had each entered into the planning agreement themselves.
In a future article next week, the writer will look further at what VPAs should and should not contain in more detail, how they can be misused and how to avoid such misuse, and how they may be enforced.
For more information, please contact the writer at Lovegrove Solicitors.
By Justin Cotton, Partner, Lovegrove Solicitors
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© Lovegrove Solicitors 2013