Planning agreements are a special type of agreement between developers and landowners (on the one hand) and local governments and/or state government agencies (on the other hand). Planning contracts are a hybrid legal document – a cross between a development permit and a commercial contract. VPAs therefore provide a mechanism by which a consenting proponent can make contributions of a type or value that the planning authority could not require the proponent to provide in any other way. There does not need to be a close correlation between the proposed development and a monetary contribution or the work to be done under a PPA, although the presence of a link between the two makes it less likely that the APF will be considered an attempt by the developer to "purchase" a development permit.4 Refreshingly, the practical note deals specifically with this subject. It states that linking "compliance with the developer`s obligations to the issuance of building, subdivision or occupancy certificates" may, in certain cases, be an appropriate means of enforcing obligations under planning contracts. .. When applying this approach, consideration should be given to including provisions allowing a project promoter to provide a financial guarantee, such as a bond or bank guarantee, when subsequently requesting the release of a certificate before fulfilling the necessary obligations (emphasis added). 2See additional guidance on the basic principles governing the review of development agreements in the Practical Note and Contributions to Natural Resource Development of the Ministry of Infrastructure Planning published on 19 July 2005. The DPIE published a draft exhibition for planning agreements in April 2020, but it has not yet been prepared. In addition, "planning authority" (section 93C) means either a board, the Minister, a ministerial body, or a public authority declared a public authority by the Regulation. Voluntary Planning Agreements (VPAs) are legal agreements between proponents and planning authorities such as councils or the Ministry of Planning and Environment. Developer industry groups have criticized the way many local councils have used (or abused) planning agreements.
Essentially, proponent representatives argued that (in many cases) planning agreements are used to simply tax perceived benefits, rather than overcoming infrastructure or maintenance issues. For example, many developers have found that once an offer is made, the council may simply ask for more money – for example, a 50% share of a perceived increase in the value of the land – and threatens to block or reject the planning proposal altogether. The draft guidelines do not apply to VPAs for which a public notice has already been issued, but to all VPAs that are currently under negotiation and have not yet been issued at the time the direction was issued. There is a risk that this will delay the completion of partially negotiated VPAs if they need to be amended in the light of the draft practice note. The draft practice note also indicates that planning authorities may consider the draft practice note when completing VPAs that have already been issued, even if this is not necessary after design management. In particular, none of the key changes to the draft practice note address the concerns raised about the potential misuse of VPAs. The draft practice note provides examples of possible "undesirable outcomes", including planning authorities that request inappropriate benefits or inappropriately rely on their legal position to obtain undue benefits, but does not provide new guidance on how to avoid these outcomes. Refreshingly, the new practice note advises against using planning agreements "to require compliance or reformulation of obligations arising from conditions of approval." The New South Wales Government has just published a new practice note for planning agreements. The planning rules have also just been amended to oblige local councils to take the new practice note into account when concluding planning agreements. .
