Small developers be wary when impacting vegetation

Small developers be wary when impacting vegetation

Posted on Thursday, December 15 2011 at 12:50 PM

As urban development increasingly encroaches on rural areas, and as property investors are increasingly dabbling in small developments, it’s important to become aware of the upfront costs that could arise if vegetation is sacrificed for new construction, according to Herron Todd White’s rural director Tim Lane.

While the legislation has been floating around since the ’90s and was most recently set in stone under the Vegetation Management Act 1999, it’s only now hitting mum and dad developers as the urban sprawl edges closer to rural areas and as many investors try to cash in on small development opportunities near the mining activity typically rurally zoned, Lane said.

First-time developers are the ones most likely to be faced with the unexpected vegetation offset costs, rather than the big corporate developers with swags of expert legal advice and project managers to oversee the due diligence process, he said.

Lane said rather than waiting for the environmental impact statement to be returned with offset conditions subject to the development approval and a hefty upfront cost to pay prior to proceeding, small developers should seek expert legal advice to determine if this could be an issue.

Vegetation offsets are triggered when a development impacts a specific type of vegetation, depending on the region. In Central Queensland the common vegetation types are bluegrass and brigalow woodland.

A developer can offset this impact by paying an upfront and ongoing fee to a property owner in the same region to protect and manage that identical vegetation initially impacted by the development, Lane said.

“The vegetation management agreement (VMA) generally continues for up to 25 years; it could be a significant sum depending on the impact and the individual circumstances,” he said.

The vegetation offset is also recorded on the title of the property owner who agrees to manage the vegetation.

The offset could also be triggered if a lot is subdivided and vegetation is removed only to set the new boundaries, even if the purpose is to just change the title to gift the land to family members, he said. “The impact can be up to five times of that specific area requiring vegetation clearing.

“For example, one large hectare might require five hectares of vegetation protection on another landholder’s property,” said Lane.

The idea of the VMA is to eventually return the region’s vegetation back to normal growth levels.

In Lane’s time identifying potential landholders to undertake the VMA and negotiating the agreement on behalf of the developer, he’s seen some good reasons why the developer’s due diligence of potential offsets is crucial in this process.

He remembers a small developer who bought a block with a development approval and because he didn’t seek legal advice on what the vegetation offset cost highlighted on the development approval meant, “years later that block still remains a cattle paddock”.

Brisbane-based partner Brian Healey of Holding Redlich Lawyers agreed that if a buyer of development land is unaware that the existing approval attached to the land is subject to vegetation offset conditions, the viability of the proposed development may be in jeopardy.

“It’s important that buyers of land with development approvals in place make themselves aware of whether or not the existing development approval requires a vegetation offset, as such conditions will bind buyers when they seek to develop the land under the existing approval,” said Healey.

“Unfortunately for developers, the standard conveyance may not flush out these issues. Buyers will need to undertake a more complete due diligence and review pre-existing development approvals before deciding whether or not to proceed with the purchase.”

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