Building Approval Lapse Risk for Residential Builders

What it is

An approval lapse is the failure mode where a builder is doing perfectly good work under an approval that has expired, was never obtained, or no longer describes the building being built.

Residential work sits under two separate approvals and builders conflate them constantly. The planning approval, a development consent in NSW, a planning permit in Victoria and a development approval in Queensland, decides whether the thing may be built on that land. The building approval, a construction certificate in NSW, a building permit in Victoria and a building development approval in Queensland, decides whether the design meets the National Construction Code and may be constructed. Losing either one stops the job.

Both expire. Both carry commence-and-complete conditions. Almost nobody diarises them.

The lapse periods, and why you cannot memorise one number

The timeframes are state law and they are not the same anywhere.

In NSW a development consent lapses five years after it becomes operative, unless work has physically commenced. Building work must not start until a construction certificate has been issued, a principal certifier has been appointed and a notice of commencement has been lodged.

In Victoria the numbers are precise and short. Under the Building Regulations 2018, building work must commence within 12 months of the permit being issued, and a Class 1 or Class 10 building must be completed within 24 months of the permit date. Miss either limit and the permit lapses under regulation 55. The relevant building surveyor can extend the dates, but only before the permit lapses, not after.

Queensland runs building development approvals through private building certifiers, with a currency period on the approval and separate currency on the planning approval underneath it.

The practical rule is simple. Read the dates off your own permit, put them in the same calendar as the BAS, and apply for any extension before the date rather than after.

What it costs when it bites

Building on a lapsed permit is not a paperwork problem. It is unlawful work, and the consequences arrive in a stack.

• The certifier cannot issue the occupancy permit, occupation certificate or final inspection certificate, because there is no valid approval to certify against.
• Without that final document the owner cannot lawfully occupy, cannot draw the last of a construction loan and cannot sell.
• Your final progress claim is gated on the very certificate you cannot get, so the money stops.
• The home warranty insurer can decline a claim on work carried out without a valid approval.
• Council or the regulator can issue a building order, a stop work order, or in the worst case an order to demolish the offending work.

The owner then sues the builder, because from their side the builder took their money and delivered a house they cannot live in.

The four ways it happens

• Work started before the permit issued. The client wanted a start date, the slab went in, and the certificate came a fortnight later. That work is unauthorised and no later certificate cures it.
• The permit ran out mid-build. A truss delay, then a dispute, then a funding pause. The completion date passed while the site sat idle.
• The as-built does not match the approval. A window moved, a wall came out, a room got added. What the certifier is asked to sign off is no longer what was approved. Any variation beyond the approved documents needs an amended approval before the work is done.
• A mandatory inspection stage was missed. The frame got sheeted before the frame inspection, or the slab poured before the pre-pour. A certifier cannot certify a stage they could not inspect, and opening it back up is the only remedy.

The detection signal

• Is the approval current today. Not when it was issued. Today, against the commencement and completion dates written on the face of it.
• Does the as-built match the approved drawings. Walk the job with the approved set. Anything on site that is not on that set is a variation needing an approval, not a note in the site diary.
• Is every mandatory inspection stage signed off in sequence. A gap in the inspection record is a gap in your final certificate.

What to do about it

Diarise both approvals at the point of award, with a reminder three months out from the earlier date. Never let a client talk you into starting before the certificate is in hand. Route every variation through the designer and the certifier before the trade does the work. If you are past a lapse date, stop and pursue the extension or a fresh approval before you put another dollar into the ground. In NSW unlawful work can sometimes be regularised through a building information certificate, but that is a rescue, not a plan.