A business signs a lease for a unit, fits it out, and then discovers it cannot lawfully do there what it took the unit for. The landlord permitted it. The lease permitted it. The approved use did not.

Whether the property may be used for your purpose, and whether your landlord will let you, are two separate questions. Both have to be answered yes, and only one of them is negotiable.

Change of use is development

Under the Planning Act, development means carrying out building, engineering, mining, earthworks or other operations on land, or the making of any material change in the use of any building or land.

That second limb is the point. You can change the use of a property without laying a brick, and it is still development requiring planning permission.

A person must not, without planning permission, carry out or permit the carrying out of any development of land outside a conservation area. Inside a conservation area, conservation permission is required for works.

The penalties are not nominal

Contravening the permission requirement is an offence. The penalty is a fine of up to $200,000, or imprisonment of up to 12 months, or both, and for a continuing offence a further fine of up to $10,000 for every day the offence continues after conviction.

Where the contravention involves demolition in a conservation area, the fine rises to up to $500,000. There is also a heavier regime where the contravention involves using land or a building to provide dormitory accommodation.

The daily continuing penalty is what makes an unresolved breach so serious. It does not sit still while you work out what to do.

What is not development

The Act carves out a number of things, and two matter in ordinary practice.

Works that do not materially affect the external appearance or the floor area of a building, carried out for maintenance, improvement or alteration, are not development. Most interior refurbishment sits here. Not all of it does.

A change of use within the same use class is not development. Where a building or land is used for a purpose in a class specified in rules made under the Act, using it for another purpose within the same class does not require permission.

That second point is the one to check first on any change of use, because it is the difference between an application and no application. It is also the point people assume rather than verify.

Where a dwelling house is involved

The Act deals with dwelling houses expressly.

  • Using a building not originally constructed for human habitation as a dwelling house is a material change of use.
  • Using a building originally constructed as a dwelling house for other purposes is a material change of use.
  • Using a building originally constructed as a dwelling house for a purpose specified in the Fourth Schedule constitutes development, whether the use began before or after 15 May 2017.
  • Using an existing building or land within the curtilage of a dwelling house for a purpose incidental to enjoying the house is not development.

Demolition, reconstruction and additions all constitute development in their own right, as does using an external part of a building for advertising where it is not normally used for that.

The practical checks before you commit

Check the approved use, not the marketing description. An agent’s listing, a landlord’s description and a previous tenant’s business are none of them evidence of what the property is approved for.

Check it before the option or the lease, not after. Once you are committed, a refusal is your problem. A conditional clause dealing with what happens if permission is not obtained is cheap to include beforehand and impossible to add afterwards.

Assume time. An application takes time to prepare and time to determine, and it may attract conditions. Fit-out programmes and rent-free periods are usually built on the assumption that none of this is happening.

Watch shophouses in particular. Mixed use with residential upper floors and commercial ground floors, frequently in conservation areas, and frequently bought on assumptions about what the upper storeys can be used for. This is the property type where the question arises most often and is checked least often.

Some uses need more than planning permission. Food and beverage, childcare, education, medical services and dormitory accommodation each carry their own licensing on top, from different agencies, on different timetables.

If a breach has already happened

If you have discovered that a property is being used in a way that was never approved, whether you inherited it or created it, get advice before doing anything else. How the position is regularised, and in what order, affects the outcome. The daily continuing penalty means the cost of drift is real, and quietly carrying on is the worst of the options.

Where this sits

We check the approved use as part of due diligence on commercial conveyancing purchases and on sale and leasing matters. Where the change of use is part of a development, see development, planning and land, and where an application has been refused, regulatory appeals covers how agency decisions are challenged.

The whole question usually costs very little to answer at the right moment, and a great deal at the wrong one.