Is Development Approval Required Before Registering a Lease?
Overview
Property owners and landlords should take the time to consider the particulars of their property and details of the potential Lease arrangements before entering into Lease agreements with prospective tenants.
A potential pitfall in leasing in Queensland lies in Leases for:
- part of the land where the term (including all options) is 10 years or more or;
- for part of a building which includes part of the land outside the building.
This includes any further term/s that may be available pursuant to any option/s to renew.
These Leases in Queensland fall under Queensland planning legislation and are deemed as subdividing the land and require council approval before registration.
Subdividing Land
Under the Land Title Act 1994 (Qld), if a Lease (other than a lease of all or part of a building) is for ‘reconfiguring a lot within the meaning of the Planning Act’,[1] then government approval must be obtained.
Under Schedule 2 of the Planning Act 2016 (Qld), reconfiguring a lot includes:
“Dividing land into parts by agreement rendering different parts of a lot immediately available for separate disposition or separate occupation, other than… a lease for a term, including renewal options, not exceeding ten years…”
Therefore, any Lease for part of land that is over 10 years will be a deemed a subdivision requiring approval.
This includes any renewal options; for example, if a Lease covers part of the land for a 5-year term, with two options to renew for 5 years each, then approval must be obtained.
If a Lease of all or part of a building includes part of the land outside, for example an outdoor dining area, then it falls under the same scrutiny as the abovementioned Leases and will also require approval.
In these cases, a licence of that area may be more appropriate.
It is important to note that any development approval is valid only for 6 months and the Lease must be lodged for registration within this timeframe, otherwise a new application for approval must be submitted.[2]
Consecutive Leases
The execution of consecutive Leases with the second lease having a future commencement date has been addressed in the courts and in Equuscorp Pty Ltd v Belperio [2006] VSC 14, determining consecutive Leases were held to be one singular lease requiring development approval.
Ultimately the Leases were rendered void.
Although this was not a Queensland case, landlords and tenants should tread with caution based on its outcome.
Moving Forward
We note the abovementioned information is not exhaustive. If you intend on Leasing part of a lot for a term of 10 years or more including options, we recommend contacting us to obtain expert tailored advice.
Contact the experienced team at Miller Sockhill Lawyers on 07 5444 4750 and one of our friendly team members can answer any questions you might have.
The content of this article is current at the date of publishing and is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Natalie Cox 6th October 2023
[1] Land Title Act 1994 (Qld) s65(3A)
[2] Land Title Act 1994 (Qld) s50(5)
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