What is a Development Agreement?

What is a Development Agreement?

 

When you undertake a development either through Land development, Residential, Commercial Developments or even a trade agreement between two countries a Development Agreement is required.

This agreement reduces and resolves implementation issues from commencement through the Development Agreement and typically use the following principles and structures.

Development Agreements between Public (Crown & Crown Agencies) and Private Sector Agencies have three requirements;

  1. To ensure funding responsibility from the public sector onto the private sector (Developer) this however can include financial and non-financial incentives within the transactions such as reduce value of land or design outcomes
  2. To provide access to all parts of the development infrastructure to ensure the development can proceed where possible
  3. To allow developers to proceed to a programme that works for them but committing to deliverable outcomes

 

Development Agreements are typically structured as follows

  1. Background – the reasons for the need for a Development Agreement
  2. Other Precedent Conditions – often for example; the agreement is in place prior to a new zoning plan being operative or having an existing a resource consent issued.
  3. Inclusion of the obligations of each party
  4. What happens if things don’t go to plan? – dispute resolution
  5. Termination of the agreement by either party and how does it work
  6. Schedules & Appendices
  • The land/Assets the agreement is about
  • Financial
  • The project works that are required to be undertaken from both parties
  • Exclusions or exceptions
  • Cost vs Time and associated penalties

 

Are Development Contributions still payable?

Most Development Agreements do not exempt the developer from paying charges under the Council’s Development Contributions Policy. However, in some instances where the scale of the infrastructure provided by the developer offsets the Council’s anticipated expenditure, as recorded in their Long-Term Plan, on growth infrastructure a reduction in the development contribution charge may be agreed. This can be documented as part of a DA.

 

Cost of a Development Agreement

Costs will range and may include Architectural, engineering or survey advice, legal advice and management fees.

 

Definitions and Interpretations

Within the DA there will be a section that should include definitions for key terms used within the agreement. Where possible it is best practice to use standardised definitions that align with other Council related documents (e.g., District Plans, ITS) and LTP

 

Development of Infrastructure

For Development Agreements that involve development of physical infrastructure works, there should be clauses in the DA with provisions for purchase price, vesting, and operations and management will likely be a focus of any required amendments. Key linkages to schedules defining the infrastructure and price should be included.

 

Development Agreements with Crown/Crown Agencies

If you are entering into a DA with the Crown or any Crown Agency Councils etc please ensure you look at Section 207 of the Local Government Act 2002

(This is not a Development Agreement)

 

Should you require any assistance for your Development Agreement please contact us Here

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