NSW: Q&A Rezoning a commercial lot to a residential lot in our building

The following NSW article about the rezoning of strata lots in NSW has been provided by Shane Williamson, Williamson Lawyers Pty Ltd.

Question: We have a single non residential lot in our 51 lot building that is to be used as a 7 day medical practice. Residential owners would prefer this was rezoned as residential. Is this possible?

Fifty of the 51 units in our building are residential. The remaining lot is an intended medical practice that has been sitting vacant and not fitted out since 2009. The owner intend to fit out the lot and open a medial practice with six consulting rooms operating 7 days a week, 7 am to 9 pm.

Residential owners would prefer the lot be rezoned for residential use to avoid having to share a lift with possibly highly infectious patients plus the loss of visitor parking spaces. Where does each party stand, legally?

Answer: A planning consultant should be engaged to provide advice.

There are a number of facets to this question.

Firstly, there is the issue of zoning and whether the lot may be rezoned for residential use. Zoning is how a particular council area is divided up to regulate the use of a certain area in a certain way. As the building in question is a 51 lot strata scheme this would suggest that the area in which the building is located is already zoned as high-density residential. In any case, seeking to rezone an area can be a very costly process and could take considerable time.

To undertake some research, zoning information for the property is available on the NSW Planning Portal website, click on the “Find a Property” link and insert address. There will be a link to a development control plan which specifies car parking requirements. I recommend that the owners corporation engage a planning consultant to provide advice in relation to the zoning and development control plan.

Next, the reference to the lot being an “intended medical practice” introduces some questions. From a legal perspective, this appears to be a reference to the permissible use of the lot. To ascertain whether the lot is allowed to be used as a medical practice, the conditions of development approval will need to be obtained from the local council. It would be best to obtain all of the conditions of development approval for both the common property and the lot extending back to the original construction of the property and subdivision as a strata scheme. It is best to have a complete understanding of whether and how the lot has changed its use over since registration of the strata plan.

Reviewing the conditions of development approval should shed light on whether:

• there is no council approval to use the lot as a medical practice;


• there is approval for use only but no approval for the fit-out of the lot as a medical practice;


• approval has been granted for both use and fit-out as a medical practice; or


• approval has been granted for the fit-out of the lot, however the approval has lapsed.

Importantly, reviewing the conditions of development approval should assist the owners corporation in ascertaining whether the lot owner will require the owners corporation’s consent to lodge an application for development approval. The lot owner will require the owners corporation’s consent if the fit-out work has not already been approved, or the approval has lapsed, and the work affects the common property.

It should be noted that that it is possible development approval is not required, for example the fit-out may be able to be undertaken pursuant to a complying development certificate, this will need to be investigated. This is one of the reasons a planning consultant should be engaged to provide advice.

If the fit-out will affect the common property, the owners corporation should obtain legal and planning advice in relation to whether there are reasonable grounds to refuse giving consent to the lodging of any development application required to undertake the fit-out work.

The Appeal Panel’s decision in the case of Dehsabzi v The Owners Corporation – Strata Plan No 83556 [2020] NSWCATAP 142 deals with this issue. In this case the lot owner sought to convert an office into a Dominos Pizza store. The owners corporation refused to consent to the lodgement of the development application and was successful in justifying its position in relation to this. The lot owner subsequently sought to circumvent the Appeal Panel’s decision by undertaking the fit-out pursuant to a complying development certificate. This resulted in the owners corporation filing a Class 4 application in the Land and Environment Court. The owners corporation was successful again in the Land and Environment Court.

Subsequently, assuming the lot owner has the right to use and fit-out the lot as a medical centre, the owners corporation will need to review the conditions of development approval to ascertain the number of visitor car spaces required. It is quite possible that the building has more visitor spaces than is required and if this is the case the owners corporation has more flexibility over the control and use of the additional visitor spaces.

Regarding your concerns in relation to how the common property, such as the lift, will be affected by the use of the lot as a medical centre, the strata committee may need to consider making some new by-laws however care needs to be taken to ensure that the by-laws are not open to challenge on the basis that they are harsh, unconscionable or oppressive. Legal advice should be sought prior to passing any resolutions making or repealing any by-laws.

Seeking to restrict the use of a commercial lot in a way that reduces its ability to generate an economic return will quite likely result in a dispute and legal proceedings. Some very complicated issues arise in relation to this matter and the owners corporation should obtain legal advice before taking a firm position on the issue. Expert advice from a planning consultant will also need to be obtained.

Shane Williamson Williamson Lawyers Pty Ltd E: shane@williamsonlawyers.com.au P: 0404 045 605

This post appears in Strata News #583.

These articles are not intended to be personal advice and you should not rely on it as a substitute for any form of advice.

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