Imagine this scenario: you’re ready to secure a prime site for your upcoming Queensland development project. The location fits your vision. Your consultants are optimistic. Your numbers stack up. Everything looks great – as long as the project gets through council.

To protect yourself from planning risks, you include a clause in the contract, “subject to development approval”

Simple, right? Not always.

While this clause seems straightforward, its wording can significantly impact your flexibility, timelines, and exposure to risk. Many developers simply reuse a clause from past deals – and that’s where problems start. Poor drafting can mean missed opportunities or unexpected obligations.

In this post, we’ll break down what the development approval clause really does, and what you should consider before signing.

What is a Subject to Development Approval (DA) Clause?

A “subject to development approval” clause gives the buyer, usually a developer, the right to terminate the contract if development approval isn’t granted by an agreed-upon date. Simple enough, right? Not quite. The wording of this clause can make all the difference –  it can either give you solid protection or leave you dealing with expensive headaches partway through the project.

Developer’s Discretion: Can You Walk Away if the Approval Isn’t Right?

Development approval isn’t always the green light you imagine. Sometimes, it comes with conditions that make the project unworkable, such as fewer lots than planned or expensive infrastructure upgrades. Technically, you’ve got your DA, but the project is no longer viable.

A skilled property development lawyer will draft a “subject to development approval” clause that gives the developer the strongest level of protection. This often means the approval must be satisfactory to the developer in its absolute discretion. In practice, this allows the developer to terminate the contract if the approval comes with conditions they’re not satisfied with.

However, if the seller has an experienced lawyer on their side, they may push back on this. Instead of giving the developer absolute discretion, they may insist on a clause that requires the developer to act reasonably. This means you can’t terminate for minor issues, and you’ll need to show that your decision to walk away is fair and based on genuine concerns.

Clarifying your duty when applying for Development Approval

If a clause doesn’t spell out what steps the developer must take to secure approval, the court will usually imply there’s an obligation on the developer to act reasonably. In other words, you can’t rely on the right to terminate if you haven’t made any real effort, like seeking town planning advice or lodging a development application.

When acting for developers, most property development lawyers tend to avoid adding express obligations to “diligently pursue” or “use best endeavours,” as these terms can restrict flexibility and create undue pressure. However, be aware that sellers (with solid legal advice) often try to include them, so you’ll need to negotiate carefully.

Setting (and managing) DA milestones

A seller might want the contract to include a specific milestone, for example, lodging the development application by a certain date, to ensure things are moving forward.

For developers, though, fixed milestones can be risky. Delays with consultants or changes after pre-lodgement meetings can throw off your timeline. Miss the deadline, and the seller may have the right to terminate the contract. Only agree to these clauses if you’re confident the timeframe is achievable.

What happens if the DA is refused?

If the council refuses your development application or approves it with conditions you can’t accept, you may still be within the approval period. In Queensland, an applicant or submitter can appeal decisions made by the council to approve or refuse a development application. But does that mean you’re actually expected to appeal?

Unless the clause says otherwise, there’s a risk of that argument being raised. To avoid this grey area, make sure the clause clearly states you’re not required to challenge a decision if it’s not commercially viable.

Flexibility to extend the DA period

Delays can happen even when everyone’s acting in good faith. If your DA is close to being granted but the deadline is looming, you don’t want to lose the benefit of the clause.

One solution is to include a right to extend the DA period, usually for 30 days at a time. This small addition can make a big difference to your risk management.

Getting the seller’s help where needed

Securing development approval often requires the seller’s cooperation, particularly in the early stages of the planning process. A well-prepared clause should outline their responsibilities clearly, such as:

• Providing landowner consents to allow you to lodge the DA.  You can find more information on owner’s consent for development applications on the Queensland Government’s planning website.
  
• Granting site access for surveyors, engineers, or other consultants.
  
• Allowing signs to be erected on the property, especially if public notification is required by the council as part of the assessment.
  
• Supplying any relevant documents, including prior approvals, reports, or studies that may support your application.
  

These actions are often time-sensitive. Including them in your agreement can help avoid costly delays and frustration in the future.

Easements and adjoining land

If the seller owns adjoining land, consider whether your project will need access rights or service easements over that property. A well-drafted clause can require the seller to grant these rights on reasonable terms. If necessary, it can also include a power of attorney to ensure those rights are properly registered. For more context, it’s worth reviewing general easement requirements in Queensland.

Missed the DA notice deadline: what are the consequences?

Your clause should make it clear what happens if you fail to give notice about the DA outcome by the deadline. Common options include:

• Allowing either party to terminate after the deadline passes – usually the fairest approach.
  
• Automatic termination, which is risky and often unenforceable.
  
• Deeming the condition satisfied, which can backfire by forcing you to proceed or terminate in a rush.
  

In most cases, the first option offers the best balance, avoiding unnecessary pressure while still providing certainty for both parties.

Project Your Project with the Right DA Clause

Every development project is unique, with its own set of planning hurdles, timelines, and financial considerations. Using a generic “subject to development approval” clause may seem like a shortcut, but it can leave you exposed to unnecessary risks and costly disputes.

The safest approach? Work with an experienced property development lawyer who understands the complexities and can draft a clause that protects your interests, gives you flexibility, and keeps your project on track.

At Brisbane Property Lawyers, we specialise in development contracts and know what it takes to safeguard your deal from day one. Ready to secure your next project with confidence?

Call us on (07) 3266 3843 or get in touch online for your free initial consultation.