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Local council due diligence done by property developers

As a property developer, I choose the suburbs where I undertake developments very carefully.

By the way, those planning to undertake a development to sell at a profit should look for very different criteria than those planning to hold the completed development as a long-term investment.

Let's look at a few of these...

Property Development

Local Due Diligence

As a property developer, once you’ve shortlisted an area with development potential, you then need to understand the local council’s planning scheme and their willingness to allow developments to be undertaken.

A great place to start is by searching the local council’s website where you can usually review and download their DCP (Development Control Plan) and LEP (Local Environment Plan) guidelines.

If after reviewing these you need further clarification then you can visit the council offices and speak with their town planner.

The things I look for include:

1. Planning Policy – what is the council’s attitude to development?

Some councils are very development friendly, while others are more restrictive.

I also check to see if there are any proposed changes to their current planning policy, so I’m not caught out by surprise.

2.  Zoning - All councils have areas where they severely restrict or even prohibit development (such as heritage precincts )and areas where they encourage development (often on main roads and near transport and shops.)

And there are areas where they will allow development if it meets their guidelines.

There may be height or density restrictions in different areas within the municipality.

3. Minimum size – is there a minimum lot size the council requires for a development?

4. Floor space ratios – is there a floor space to lot ratio the council requires?

In other words how much open space do they require and how dense do they allow development to occur?

5. What car parking requirements does the council have?

How many car spaces need to be provided for each dwelling and are there restrictions to parking configuration within new developments?

For example, some councils will require cars to drive out of the property in a forward direction (not backed out) which means you will need to provide room for turning within the property.

6. Is there a minimum street frontage required to allow redevelopment?

7. What setbacks are required by the council? This not only relates to the frontage of new developments but setbacks from neighbours on the side.

8. What is the council policy to established trees on properties? Will they allow the removal of trees for new development?

9.  Are there any demolition controls in the area, in particular in relation to heritage properties? While this is relevant in all states, it is particularly relevant in Brisbane.

10.  Are there flood or bushfire controls, or heritage and conservation constraints?

11. What are the council fees and levies for new developments?

12. Are there any other issues specific to that council?

As you can see a property developer has to do a lot of local due diligence long before starting to look for specific development sites.

About Bryce is a property development specialist, having successfully sourced, project managed and completed hundreds of development projects for Metropole’s clients, helping them create substantial wealth.
5 comments

Demand/Supply is another factor. Also it is better to select development unfriendly councils. The property once developed will carry a premium. It is better to develop in Boroondara with it's tough development controls than go to Sunshine where ever ...Read full version

1 reply

I have just bought a property which has a council order on it that I didn’t know when I purchased it. Do I have any way to make the vendor pay for this if they didn’t declare it on purchase

0 replies

As a first time developer I learnt some lessons the hard way. Subdividing a battleaxe South of Perth I was very naive and did not do the research. The council were extremely high maintenance and I had to pay a POS tax that was over 20k. Much of my pr ...Read full version

1 reply
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