ASSETS

When assessing a client and deal, lenders will focus on the financial strength of a prospective borrower, via their Asset & Liability statement (A&L), Profit & Loss statement (P&L), and forward looking cashflow.

 

From the lenders perspective assets taken into consideration generally include real estate property, equities (shares) and other such valuables that a borrower owns directly or via companies/trusts which a lender may use as security when lending.

 

ASSET & LIABILITIES STATEMENT

The A&L consists of a generally one-page summary of the borrower’s assets and corresponding debts and demonstrates the borrower’s net equity position. This can also be referred to as a Statement of Position.

 

BALANCE SHEET

The Balance Sheet represents a company’s A&L position and provides management with an assessment of its net shareholders position or net worth. From a lending perspective, it assist lenders in assessing a borrowers business performance.

 

BALANCE SHEET STRENGTH

This is the overall position of the borrower (individual / company) and displays their ability to provide security in order to borrow or meet obligations. Lenders may apply standard ratio calculations based on industry standards to confirm that the borrower has the ability to meet its existing and proposed obligations.

 

CASHFLOW

Cashflow generally includes a 12 month forward looking forecast detailing all the borrowers income and payment obligations.   Cashflow forecasts assist in providing a better understanding of the borrowers risk profile.

 

CAP AND COLLAR

This refers to a mortgage in which the variable interest rate paid by the borrower cannot rise above or fall below specified levels.  The lender will generally charge a risk fee to provide a borrower with this offering and for the borrower this can effectively act as an insurance policy.

 

CREDIT RECORD

Credit records (or reports) detail the personal and corporate loan applications and any defaults usually over the prior 5 to 7 year period.

 

COST TO COMPLETE

Cost to complete refers to the developers cost to complete a project.  With a construction facility lenders require that the undrawn loan facility balance is always sufficient to complete the project. This ensures that the Lender does not end up in a situation where they are reliant upon the developer to come up with additional cash to complete the project.  Lenders generally require the developer’s cash to be committed into the project prior to the lender funding any cost,  thereby ensuring the lender can fund to complete the project without reliance on the developer.

 

INTEREST COVER RATIO

Interest Cover Ratio (ICR) is the measure by which the borrower’s net income before interest and tax is measured as a ratio against their total borrowing.  This ratio allows the lender to assess the borrower’s servicing capacity along with any risks that might impact loan repayment.

 

INTEREST

Interest is the return earned by the lender for providing financing, paid by the borrower.  It is generally calculated on a daily basis on the drawn funds and charged monthly in arrears.

 

CAPITALISED INTEREST

This refers to a loan where the interest payments are accrued and included as part of the total loan facility and paid at the end of the term (as opposed to monthly direct payments by the borrower). For example, it is standard for property developers to capitalise interest during the development construction period (during which no income is being derived from the project).  Upon completion of the project the loan, including all capitalised interest, is repaid via development sales proceeds or a construction debt refinance into a standard investment loan (or a residual stock refinance).

 

COMPOUND INTEREST

This refers to the interest paid on the principal debt as well as the interest accrued on that principal, calculated from the loan commencement date.

 

INTEREST ONLY LOAN

A loan type whereby the principal amount borrowed remains the same at the end of each month (i.e. it is not being paid down), while the interest is calculated and payable at the agreed to terms, such as monthly.

 

VARIABLE INTEREST RATES

A variable loan rate that varies in sync with a nominated money market rate (commonly the 90-day BBSY). This reference rate is the cost at which banks typically buy and sell money to each other.

 

MINIMUM INTEREST PERIOD

This is an agreed to period during which the lender requires interest to be paid.  For example, a borrower may be seeking funding to acquire a development site and needs the funds for say six months until perhaps the development funding is sourced. Given the relatively short loan period the lender may not wish to incur the associated loan setup costs only for it to be repaid within a short period.  To negate this, the lender may require a four month Minimum Interest Period.

 

PRINCIPAL AND INTEREST LOAN

A loan type whereby both the principal and the associated interest are included in the repayments progressively repaid over the term of the loan.

 

DEVELOPMENT COSTS

Development Costs refer to the costs associated with the acquisition, design, construction

and sale of a development project. These costs are made up of both Hard and Soft Costs.

 

DEVELPOMENT HARD COSTS

Hard Costs include all development costs associated with the physical completion of the project to the point considered practical completion, with the appropriate certifications in place allowing it to be used in accordance with its intended use under the DA.  Directly related consultant and statutory costs may be included within Hard Costs.

 

DEVELOPMENT SOFT COSTS

Soft Costs can include architectural and engineering costs, legal costs, permitting costs, finance fees, construction Interest, expenses, leasing and real estate sales or brokerage commissions, advertising and promotion costs, and supervision fees.  Soft Costs are generally cost items required in addition to those included as direct construction costs. It is important to note that the soft costs a lender will include in their funding table can vary between lenders.

 

EARLY REPAYMENT FEE

This refers to a fee charged by the lender to a borrower when a loan is repaid prior to the agreed term.  This fee can be more common when utilising a non-bank lender given that non-bank lender funds are often raised from investors with targeted returns over a set time period, such as twelve months. When a borrower repays early the lender needs to lend those funds out again to ensure their investors reach their targets.

 

GENERAL SECURITY AGREEMENT

General Security Agreement (GSA) refers to the registered security process managed under the new PPSA legislation replacing the prior system of registering a charge over a company in support of its borrowing/guarantor obligations. GSA’s are registered on a National Register securing the lender’s interest against the relevant security entity and or asset while also allowing for a priority system agreed between lenders secured over the same security.  This ensures that multiple lenders receive the appropriate levels of security and priority.

 

LAND BANK LOANS

A land bank loan refers to finance sourced to specifically secure, acquire and hold a development site which may still be in the planning stage (or earlier) and is not likely to be developed in the short to medium term.

 

Loan to Cost Ratio

Loan to Cost Ratio (LCR ) is a measure used in property construction by which a lender determines if there is an adequate level of equity contributed by a developer into a project.  Generally, the higher the measure of leverage, the riskier the loan is considered to be.

The ratio is as follows: Loan Amount ($) / Total Project Cost ($) = LTC (%).

 

LOW-DOC LOAN

In situations where a borrower may not have the ability to demonstrate a strong asset position or business history for example, a lender can lend to this borrower based on the strength of the security asset. In these risker scenarios,  the lender will negate their risks by either charging a higher interest rate or lowering the LVR.

 

LOAN CONDITIONS

These conditions are part of the lenders loan terms and generally include the following:

 

CONDITIONS PRECEDENT

These are the conditions which must be satisfied before a lender will settle a loan and provide the first advance. These conditions are usually detailed in the Indicative Terms Sheet or Letter of Offer and are then noted in the full in the Facility Agreement which covers the full terms and conditions of the facility.

 

These Conditions are generally around:

 

Presales: For development project financing a lender may require a specific number of conforming or qualifying presales, covering a percentage of the total debt being provided. This required presell coverage can vary and is determined by the level of risk in a deal and the lender’s risk tolerance.

 

Building Contract: The lender will assign an independent Quantity Surveyor to review a signed building contract (signed by the client and reputable builder) to ensure the costings  and structure are in line with market conditions.

 

Valuation: Refers to a valuation report providing:

• The current “as is” value.

• The gross realisation “on completion” value of the completed project.

• In a “strata titled” scenario, an “in one line” value may also be included.

 

Survey Report: ensures that the land dimensions match with title searches and that there are no encroachments or other boundary or usage issues.

 

Geotechnical/Site History Report: This report confirms that  the site is not listed on an EPA register and further that there are no on site contamination or sub-strata issues that could potentially impact a proposed project.

 

Property Searches: Generally undertaken by the lenders solicitors to certify acceptability.

 

CONDITIONS SUBSEQUENT

These are lender conditions required to be satisfied by the borrower after the first advance and prior to subsequent milestones.

 

LIABILITIES

Debts or obligations, secured or unsecured, associated with a borrower or guarantor directly or via trusts.

 

JOINT AND SEVERAL LIABILITY

With this condition a lender can pursue recovery of outstanding debt against all of the guarantor parties, meaning they may pursue the party with the most accessible asset position until they have obtained payment, and an unsatisfied judgment against one debtor will not be a bar to an action against the others.

 

LIMITED LIABILITY

A situation where the lender agrees to place a limit on the debt obligation of a party which caps their liability to recover debts. Generally used in joint venture scenarios where the liability is limited to reflect the capacity and obligations of different partners.

 

Loan to Value Ratio

The Loan to Value Ratio (LVR) reflects the ratio of total debt and the projected “on completion value”.

 

LOAN TERM

The length of a loan generally measured in months.

 

MARGINS

The amount the lender charges the borrower above the lenders base cost of funds, which is in effect the lenders return on the loan. The margin is often quoted as a percentage over a published reference rate. The lender will generally calculate it based won the daily balance of drawn funds and charged monthly in arrears.

 

BANKS TREASURY MARGIN

The cost of a banks funding, raised via the interbank markets, and used to fund loans, are generally passed on to borrowers.   This cost is the banks treasury margin, and is referred to as their “internal cost of funds”. This fee is charged to the customer along with the reference rate, loan margin and line fee.

 

LINE FEE

When lending towards developments or construction projects a lender may charge a line fee charged as a percentage rate. This would be in addition to a margin fee, which is the interest rate is calculated and charged on drawn funds only, while the Line Fee is calculated and charged on the total facility limit.  This provides the lender with certainty of returns  given that it has committed the funds to be available to the borrower.  It also protects the lenders in situations where a borrower does not draw down on all or part of a funding facility, perhaps because they found alternative capital sources, while the bank has still committed to have the funds available at its cost (and is therefore not able to be lent out, creating an opportunity cost).

 

LOAN MARGIN

The loan margin refers to the margin earned by a bank over and above its cost of funds. This is expressed as a Reference Rate.  The reference rate + loan margin = the total loan “interest rate”.

 

MORTGAGE DOCUMENTATION

This refers to the set of security documents a borrower must sign providing a lender with security over the property.  This set also includes the facility or loan agreement along with any documents detailing loan terms along with any legal documents.

 

NON-CONFORMING LOANS

This refers to loan types that are structured specifically for borrowers who are outside general or standard income verification and credit history criteria that mainstream lenders require. Borrowers who fall into this category often include the self-employed,  those with a poor credit record or recent immigrants. These loans tend to have higher interest rates reflecting the higher risk of non-repayment.

 

ORIGINATION

Loan origination refers to the preparation, evaluation and eventual submission of a loan application. Generally includes borrower background, consultants reports, verification of information, and a credit paper outlining the risks and mitigants in support of the application.

 

PERSONAL PROPERTY AND SECURITY ACT 2009 (PPSA)

The PPSA effectively replaced the prior system for registering charges over a company in support of its borrowing and guarantor obligations. Under PPSA, “security interests” are defined as an interest in personal property provided for by a transaction that secures payment or performance of an obligation.  The PPSA structure, operating under a national register system, replaces a wide range of former security forms including property, leased equipment and goods which relied on ownership for protection. Under PPSA Lenders require borrowers to enter into a General Security Agreement (GSA), which is then registered on a National Register securing their interest against the relevant security.

 

PRESALES

 

QUALIFYING PRESALES

When lending funds towards the construction of a residential development project banks will often require presales. The presale requirement will differ depending on the size of the project, the lender, and the prevailing economic environment.  Examples of qualifying presale requirements can include: Minimum 10% deposit and a limit on foreign purchasers.  

 

PRESALES UNDER-WRITING

This refers to an agreement between a wholesale property investor and a property developer whereby the investor receives a discount for ‘underwriting’ the presales. This is generally negatively viewed by lenders as it does not demonstrate market demand for the development.

 

PROGRESS PAYMENT

Construction loans are typically paid progressively throughout the construction period, with the lender advancing funds monthly against the loan limit, paying the contractor or builder directly under the loan facility to protect their security position.

 

The lender will rely on the independent Quantity Surveyor report which verifies the completed work and assesses it against the total project cost. The Quantity Surveyor will then determine the cost to complete which provides comfort to the lender that the remaining undrawn loan funds will be sufficient to complete the project.

 

The lender or Quantity Surveyor will request invoices for any costs and perhaps a statutory declaration stating that the costs are genuine and that the project is on track.  Once the lender is satisfied they will pay the contractor or invoice directly, or reimburse the developer for any invoices they have paid themselves.  The preference is for lenders to pay the contractor directly and satisfy themselves that any sub-contractors have also been paid.  This avoids the risks around having to pay twice in the case of an insolvency event impacting the developer.

 

PROFIT AND LOSS STATEMENT (P&L)

The P&L makes up part of a lenders risk assessment (alongside the A&L statement and cash flow), providing comfort around the borrowers financial capacity.  The P&L is an accounting form depicting a company’s profit or loss position after taking into account the income earned adjusted for cost of goods sold, operating costs, expenditure, interest and tax along with all relevant deductions.  Usually prepared by an accountant the P&L provides an assessment of the business’ profitability and can provide a prospective lender with an understanding of the businesses capacity to meet its financial obligations.

 

REFERENCE RATES

 

Bank Bill Swap Rate (BBSW)

The BBSW is the Inter Bank Reference Rate quoted by banks as their benchmark cost of funds and on to which they add their lending margin.  The  90-DAY BBSY is the most commonly used published Reference Rate.

 

INTER BANK REFERENCE RATE

This is the average interest rate as estimated by leading lenders in the relevant market that the average leading bank would be charged if borrowing from other banks (i.e. BBSY (AUS), LIBOR (UK) and SIBOR (Singapore and SE Asia).

 

RENOUNCEABLE PRESALES CONTRACT

A contract allowing a developer to renounce a sales contract at a later date. Typically used in presale underwriting agreements.

 

UNENCUMBERED

An unencumbered property is one owned free of encumbrances or restrictions.

 

Loan & Equity Options

 

DEBT

 

SENIOR DEBT

Senior Debt is the principal debt piece that holds the primary or first ranking registered mortgage over the property.  This debt is typically provided by a bank of major mortgage fund.  Given its priority position and hence the associated lower margins (rates) it is the most desired source of development funding.  This debt type is also generally the most conservative which is reflected in its lending ratios.

 

MEZZANINE DEBT

Mezzanine Debt (aka ‘Junior Debt’) is a subordinated debt piece secured by a second ranking registered mortgage over the property and is considered an extension of debt beyond the standard LVR levels typically provided by a senior lender.  A developer will generally need to have de-risked the project as much as possible to be eligible for this debt and it generally does not occur until the project is “shovel-ready”. Given the style of debt and its subordinated position the costs are typically high.

 

EQUITY

 

PREFERRED EQUITY

Preferred equity refers to a situation where an investment or loan is required that exceeds standard LVRs (Loan to Value ratios).  Preferred equity is generally a mix of debt and equity financing that fills the gap between lender funding and the borrowers towards the Total Developments Costs (TDC) of a project. Given the higher risk than ‘junior debt’, a higher return is expected, and can be achieved via a profit sharing arrangement.  The return may be made up of interest paid on equity invested, along with a share of the project’s profits.

 

JOINT VENTURE

A property joint venture (JV) is a deal between multiple parties to combine resources and work together on a development project.  An advantage of a JV is that it allows groups or individuals with property development experience to ‘join forces’ or pool resources and work together with capital providers or investors into the project.  Profits are distributed via an agreement and are often in line with input in to the deal.

 

EQUITY REDRAW

An Equity Redraw is a financing option allowing a developer to take out equity from a completed project, usually to use towards their next project.  A lender or investor will provide the equity secured by the property for an agreed return or rate.  The rate can vary based on the project risks and security provided.

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NON-RECOURSE

Non-recourse, also referred to as limited recourse, lending refers to the lender’s recourse being limited to the security asset (property) only.  Meaning, there is no further recourse to the borrower and their assets.

 

Project Feasibility

 

CONTINGENCY

A contingency allowance is required by lenders to be built into the project construction budget to be used in case of unforeseen expenses encountered during the build. This allowance is typically 5% of the total development cost (TDC).

 

FEASIBILITY

A feasibility report measures a projects financial viability, via taking the projected net income from sales and deducting the total cost required to deliver the project, to determine the resulting net profit.

 

GROSS REVENUE

Gross revenue is the realisable revenue resulting from the sale of the completed project.

 

Good and Services Tax (GST)

GST is usually applied on all residential properties developed and sold. GST Fully Taxable refers to the tax applied to residential projects. (Retail, commercial, and industrial projects typically do not attract GST but this should be confirmed with your accountant).

 

GST APPLYING THE MARGIN SCHEME

A conforming project (as confirmed applicable by an accountant) allows a developer to only pay GST on the ‘margin’ difference between the revenue realised from sale of the completed asset and the site purchase price. E.g. if a developer purchased a site for $5M and the development GRV was $25M,  the developer would only pay GST on the differential of $20M.

 

MARGIN ON DEVELOPMENT COST

This is the profit margin as a percentage of the total development cost.  Depending on the lender, they will generally require minimum project returns between 18-25%.   This can vary based on transaction size and type (e.g. for subdivisions).  Can also be called “Return on Capital”.

 

NET REVENUE

This refers to the net proceeds from the sale of a completed project.  Net revenue is calculated as the Gross Revenue amount net of GST, legal, commissions, and sales costs.

 

PROJECT VALUATION

This is determined by the valuation report requested by and prepared for the lender.  The valuation will provide an “on completion” project value (“GRV”) along with an “as is” value of the development site.

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Total Development Cost (TDC)

TDC refers to all of the costs connected to the completion of a project.

 

Construction

 

BANK GUARANTEES

A Bank Guarantee is an unconditional assurance that a builder will pay the lender in case of an occurrence as described in the Building Contract where the builder is required to pay the lender.  This is an alternative to a builder securing their performance by “retentions” which secures the builders obligations and in case of the builder’s non-performance can be called by the lender.

 

BUILDING APPROVAL (BA)

This is the (post DA) approval provided by the local council’s building approval authority authorising a project’s construction in accordance with a submission including working drawings. This is generally lodged by the developer’s consultants or builder.

 

CONTRACTS

 

DESIGN AND CONSTRUCT BUILD CONTRACT

This refers to a situation where the builder undertakes the construction and design of the project.  Generally used for projects without complex design parameters.  Advantage is the elimination of the need for an architect.  This contract type can also be written to provide a ‘Fixed Price and Time’ requirement.

 

CONSTRUCTION MANAGEMENT CONTRACT

This is for a situation where the developer and the builder agree that the builder will manage the construction process on a “cost plus” basis.  This can be riskier from a lender’s perspective as any cost increases are covered by the developer.  Conversely, a GMP (Gross Maximum Price) contract provides for cost and time penalties which motivate the builder to complete the project on time and on budget.

 

COST PLUS CONTRACT

This refers to a contract type where a builder or contractor obtains material and services throughout the stages of the building process and the costs are passed to the owners.  On top of this there is an agreed to margin to cover overheads, profits, and labour rates.

 

FIXED PRICE CONSTRUCTION CONTRACT

This refers to a contract type that is fixed in both construction time and price. This is the lender’s generally preferred construction contract type.

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Guaranteed Maximum Price (GMP)

This contract type works on the bases of a “not-to-exceed price”, i.e. a guaranteed maximum price.

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COST OVERRUNS

This refers to costs that accumulate which were not included in the contract are beyond the contingency amount.  Lenders will review a developers Asset and Liabilities position to ensure that they can access funds if required to meet overruns on short notice. Without being able to demonstrate this, a transaction may be deemed riskier.

 

COST TO COMPLETE

The ‘cost to complete’ refers to the lender requirement that they will only advance funding on a project only once the developer has contributed their full equity contribution. This provides comfort to the lender that their undrawn funds will always be sufficient to complete the project (and hence the debt will be fully repaid).  At each drawdown a QS will  certify the “cost to complete” (if they were to determine a shortfall against the undrawn funds the lender will be required to add further equity before the lander will advance further funds.

 

DEVELOPMENT MANAGER

The development manager is authorised by the developer and is responsible for coordinating the project completion. The role includes managing the entire transaction  such as Planning Approvals, Construction, Marketing, and Sales.

 

FEASIBILITY

The feasibility is the formula used to determine the profitability or legitimacy of a proposed project.  In simple terms it can be explained as:

Gross Income less selling costs = Net Income less: TDC = Net Profit

(TDC includes the land plus acquisition costs, construction plus soft costs, plus finance, legal, and other costs.

 

DEVELOPER FEASIBILITY

To determine the assumed viability of a project the developer will work on an assessment based on assumed and estimated costs based on research and market comparisons (such as recent sales to determine GRV and construction costs to determine cost per square metre). Assuming the quality of the data this exercise can provide the developer some idea as to the project’s viability, projected return on equity, and projected net profit.

 

REVERSE FEASIBILITY

This refers to the valuer’s feasibility report which uses known market data and therefore applicable profit and risk analysis to determine the ‘as-is’ market value of the development site.

Net Income = Gross Income less Selling Costs

Total Capital Outlay = Net income Iess profit and risk factor

As-Is Value = Total Capital Outlay less Development, Finance, Interest and Acquisition costs

This value is then compared to other relevant site sales in the prior period to confirm accuracy.

 

Furniture, Fixtures and Equipment (FF&E)

Refers to the planning and interior design of retail stores, offices, longer-stay apartments, and hotels.

 

GANTT CHART

Bar flow chart comparing the actual flow and the projected flow of a project’s schedule of activities. Notes items such as the start and finish dates, critical and non-critical activities, and down time.  Helps determine the likely completion date and any potential road blocks that could impact construction progress.

 

HOUSE CONSTRUCTION PROGRESS DRAWS

For detached dwelling construction, progress draws typically follow HIA stipulated draw down milestones (vs monthly drawdowns) based on the following:

 

MILESTONE

An agreement between the borrower and lender whereby the borrower is required to meet specific goals, including, project completion, presales hurdles, and the like.

 

MILESTONE PAYMENTS

Fees paid upon specified and agreed-to goals being reached. For example, Development Management Fees may be paid in amounts as key milestones are hit (as opposed to guaranteed monthly payments). This helps ensure that the development manager’s project  completion goals are aligned with the developer’s goals.

 

OWNER BUILDER

This refers to a situation where the owner takes on the general contractor responsibilities to build a specific project. In these scenarios, lenders may reduce their lending ratios given the increased risk associated with costings and associated subcontractor negotiations.

 

PERFORMANCE BONDS

A performance bond (bank guarantee) can be a council requirement to secure works to be completed or maintained for a period of time post completion.  Council requires this security from the developer to ensure any future damage is rectified

 

PROJECT MANAGER

Appointed by the developer, the project manager is responsible for coordinating all tasks related to completing the construction.  The project manager will generally manage the  builder, architect, engineer, town planner, and will liaise with the quantity surveyor and other consultants.

 

QUANTITY SURVEYOR

An independent consultant retained by a developer to assess a project’s profitability and then controls costs once development begins. They are also retained by lenders to ensure that the project is correctly costed and that the “cost to complete” requirement is being met. The Quantity Surveyor assesses the development costs associated with the project with regard to its architectural plans and prevailing market conditions of material supplies and labour costs. In land subdivision projects this role is undertaken by Civil Engineers.

 

RETENTIONS

As part of most construction contracts a builder agrees to have a portion of their

progress payments “retained” to ensure:

 

(i) they complete the contract works,

(ii) the quality of the works are satisfactory; and

(iii)any faults requiring rectification are completed in a timely manner.

 

The retained amount is generally 5% of the total contract sum but does vary as agreed to by the parties, including the lender, and are accrued at a rate of 10% of each progress payment until they reach the agreed limit.

 

SHOVEL READY

A shovel ready project is one ready to commence development. The town planning and building approvals are in place and the project is ready to commence assuming once the financial resources are in place.

 

VARIATIONS

These provide the builder the ability to claim an increase to the contract amount to account for client initiated design changes or increased costs agreed to under the initial contract terms.

 

Valuation Terminology

 

“AS IS” VALUE

This refers to the value applied to a property based on its current town planning status and reflects the market value a buyer would pay for the property, with regard to its existing status including its redevelopment potential.

 

IN ONE LINE

An ‘in one line’ valuation applies to a group of apartments (or other product) valued collectively but can be sold individually.  A discount rate is usually applied to reflect the risk which can be 20-25%.

 

NPV

Net Present Value equals refers to the overall value of all incoming and outgoing cash flows derived from the property over a period of time (generally 10+ years).

 

“ON COMPLETION” VALUE

Refers to the value of a development based on any DA and/or BA approvals and assumes that is constructed to meet those terms and conditions.

 

Town Planning

 

DEVELOPMENT APPROVAL (DA)

DA refers to the written approval provided by the local council’s town planning authority authorising the development of a specific project. Generally lodged by the developer or  land owner’s consultants. Approvals are generally granted on the basis that they are either “Code Assessable” (ie that the proposed development meets all the existing town planning code requirements as published by the local authority and can be processed and approved without public notification, resulting in faster approvals) or “Impact Assessable” (ie the submission has elements that fall outside of the standard requirements of the published planning codes and will require some level of relaxation/approval. It will also require to be given public display, which provides opportunity for parties with legitimate objections to submit them to council for consideration. Prospect of approval will be largely dependant on how much diversion from the planning code is being sought).

 

ZONING

Local government authority provided guidelines as to the permitted uses of land and buildings within designated zones.  These zones are displayed on town planning maps published to assist developers assessing development potential for sites.

 

Reconfiguration of Lot (ROL)

Refers to a process of reconfiguring a lot, for examples dividing a lot into two titles.

 

Material Change of Use (MCU)

Making a material change to the use of a property. For example changing a farming zoned lot into an urban residential zoning allowing a larger number of houses to be built on the land.

 

Request for Information (RFI)

RFI can occur once council have received and assessed an application and deem that they need more information on particular aspects of the application prior to processing the approval.