Land use planning and development can be complex, with various stakeholders and competing interests. The section 173 agreement is legally binding between land management authorities and landowners and provides a flexible way of dealing with planning challenges. In this topic, we will examine how the objective utilitarian principles of section 173 are relevant to land use policy.

What is a section 173 agreement?

Section 173 agreement allows the governing body concerned to enter into an agreement with the landowner to establish standards or restrictions on how the land can be used or developed or to meet planning objectives on the property. Like any other contract, a section 173 contract is a legally binding document.

However, the advantage of section 173 agreement is that it can be recorded in the title of the land so that the agreement binds the owner’s obligation to the future owners and occupants of the land.

Know about Section 32 Vendor Statement

Section 173 agreement example

This could be a lot to process, so, let’s make this easier with an example.

For example, the Section 173 agreement can restrict the number of residential units built on a property, mandate the installation of permanent infrastructure, or even ensure the protection of native vegetation. This allows local authorities to shape their future communities.

As you can see, section 173 agreements are versatile tools that can be tailored to each community’s specific needs. By working closely with local authorities, developers can manage land use challenges and develop projects that benefit both local communities and the environment.

Parties to an agreement

Two main parties are usually involved in a Section 173 agreement: the controlling authority and the landowner or developer.
It is important to note that:

If the prevailing owner and the prospective owner agree on positive terms, the agreed-upon terms will automatically be binding on the original owner.
Generally, a contract with the prospective owner will provide that the obligations under the contract only begin when that person becomes the official owner of the land.

The flexibility of section 173 agreements allows for the involvement of third parties beyond just authority and the landowner, e.g.:

Planning authority or the Referral agency, if they consider it worthwhile to regulate their rights or uses of land.
A developer or occupant with a substantial interest in the development or use of land.

For the agreement to be valid, the current landowner must be a party. This is because the contract’s obligations and limitations must be formally spelled out in a land title, requiring the owner’s consent.

Also, suppose the property under a Section 173 agreement is subsequently distributed, or shares are sold to new owners. In that case, those new owners are simply new parties to the agreement, unless the agreement specifically states otherwise. This continues the obligation and conditions of the original contract.

How to find a Section 173 agreement?

One of the main ways to negotiate a section 173 agreement is with your local council or planning authority. All section 173 agreements concluded within these regulatory authorities’ jurisdiction must be registered.

You can access this registration on the council’s website or by contacting their planning department directly.
Another option is to look at the section 173 agreement on title. For example, with section 173 agreement in Victoria, you can search the online Landata system to find a list of section 173 agreements that apply to specific properties. This can be particularly useful if you are interested in the details of a contract for a piece of land.
Note that some councils and planning authorities may also provide online portals or databases where you can search and access Section 173 agreements. These digital options can make finding the specific contract you’re looking for more accessible, especially if you have information such as the property’s address or contract name number.
We know what you’re probably thinking—: “But what if I don’t have all the details needed to know about a particular deal?” You can contact the controlling authority directly and ask questions about any Section 173 agreements for a particular property or development.

When should an agreement be used?

Before implementing a Section 173 agreement, administering authorities should consider alternatives to achieve their policy objectives.
Moreover, section 173 contracts can be:

Difficult and expensive to deliver.
It is difficult to change or cancel, especially after the land involved has been subdivided.

Advantages of agreements

When it comes to land use planning in Australia, section 173 agreements offer several key benefits, including:

Binding the future holders: These contracts can be written in the name of the land, binding not only the current owner but any future property owners. This helps to ensure that the contractual obligation will continue.
Ability to require actions: Unlike planning policy provisions or permit conditions that only authorise a work, a section 1 authority can expressly require a landowner to take specific steps. This is particularly useful when a regulatory authority wants to guarantee particular outcomes before granting or issuing planning permission.
Detail and site-specific: Agreements can include detail and site specificity that may be difficult to capture in permit conditions or other planning provisions.
Potential positive covenants: Unlike restrictive covenants, section 173 contracts can include positive covenants, such as a substantial new operating standard or system for the use or production of land.
Achieving broader objectives: These agreements can create positive obligations for regulatory authorities of other parties, enabling broader policy objectives to be achieved beyond mere licensing conditions.
Continued restrictions: Even if the need for specific planning permission is withdrawn, a section 173 agreement can still impose relevant limits on land.

When not to use an agreement?

When it comes to land use arrangements, there are certain circumstances under which the Section 173 agreement should not be used:

1. Exceeding statutory powers

A section 173 agreement cannot be used to extend the powers of the responsible authority beyond what is provided for in the Planning and Environment Act. The agreement cannot authorise its application or authorisation that would impact the existing planning process or appropriate permits.

2. Less restrictive provisions

The agreement includes unlimited provisions other than those already in the planning schedule or permit. For example, it allows otherwise restricted users or developments.

3. Substitutes for a planning policy

A section 173 agreement should not be used as a substitute for an express planning policy. To effectively accomplish the objective and apply a simple licensing environment, the controlling authority should rely on something other than the complexity of Section 173 contracts.

4. Unnecessary complexity

Before seeking an action 173 agreement, the responsible authority must ensure that the clause justifies the agreement’s power and complexity, not by force; a well-written paper condition will handle this.

What can an agreement cover?

The Planning and Environment Act provides a greater scope for the use of section 173 agreements, enabling a range of land use and planning issues to be addressed:

Restrictions and regulations of use or development: This agreement may prohibit, restrict, or regulate land use or development.
Conditional use or development: Conditions may be established for land use or development for a particular purpose.
Achieving planning objective: Section 173 agreements may be used to achieve or further broader planning objectives, as set out in the planning scheme or amendments.
Coordinating development: This means meeting with neighbouring landowners and other regulators.
Staged developments: A framework for phased implementation of large scale projects.
Environmental and heritage protection: Property restoration, environmental restoration, property protection, or vegetation protection.
Infrastructure provision: Local or development-specific provision, such as open spaces or facilities.

Final takeaway

Section 173 agreements are a powerful tool in Australian land use policy, providing responsible authorities and landowners with a flexible and collaborative way to shape the future of communities.

These agreements can negotiate various terms, restrictions, and requirements, from the scheduling of developments to protecting the environment and property including property transfer. However, they must be used judiciously, within reasonable legal and practical limits.

And you know what? You can connect with us at Easy Link Conveyancing for expert help with all your conveyancing needs, including advice on section 173 agreements.

What is Section 173 Agreement in Victoria? An Ultimate Guide