Planning and Building Compliance Due Diligence for Bricks and Mortar Business: TOP 7 TIPS

Whether you’re buying an established business associated with property (lease or sale) or buying/leasing property to start or house a business or office, please read this and tell your friends and family.

These are my 7 tips which I consider to be the fundamental areas of due diligence when dealing with bricks and mortar for business:

1. Zoning:

Does the zoning of the land permit the use which you intend on undertaking? You can look up the land use tables in Council's planning instrument (Local Environmental Plan (LEP) in NSW) and see if the use is permissible in the zone. Don’t forget to check the Dictionary section to see the definition of the use to make sure your proposed use fits into the definition. Zoning sounds like a no brainer but it is an instant deal breaker if it is prohibited in the zone.

2. Building works

Does the existing building works have development consent and certification? If it does have a DA, has a Construction Certificate (CC) and Occupation Certificate (OC) been issued? You could be inheriting existing unauthorised works where you may be subject to enforcement action by Council. Even if it has a DA, if an OC has not been issued, there may be an enormous amount of fire upgrades that may not have been installed and you may inherit that burden.

3. Building Use

Is the current use of the business approved? Has an Occupation Certificate (OC) been issued? DA’s for pure change of uses still require an OC to be issued which may trigger Building Code of Australia (BCA) required upgrades.

Forget the fact that the restaurant has been operating for 30 years, it may be unauthorised. Even if it has an approval to be a restaurant, there are many operational conditions of development consent which may affect your business. These can include, but not limited to:

• Hours of Operation
  
  
• Seating, staff and patron capacities
  
  
• Acoustic conditions (noise cannot exceed certain decibels)
  
  
• Restriction on the playing of amplified music, outdoor speakers or live music
  
  
• The cooking of raw meat (don’t laugh, many cafes have conditions restricting the cooking of food as they don’t have a AS1668 compliant mechanical ventilation system installed)

Scenario - You might be buying a restaurant that has live bands, 100 seating capacity and able to cook full blown charcoal chicken but the original DA was only for a cafe with 30 seats and no cooking. This will severely compromise your ability to carry out your business at its intended capacity and intensity.

4. Adjoining Uses

I’ve seen business get ruined by constant complaints from adjacent neighbours. DA’s usually have noise conditions that limit decibels and there are provisions in NSW, the Protection of Environmental Operations Act 1997 which govern “offensive” noise and odours. Just be mindful when you are doing any sort of commercial activity in proximity to residential uses and assume there is a potential for conflict with neighbours. You can search Council records for any background of complaints relating to a premises.

5. Is approval required?

From a light cosmetic renno or change of use, don’t take the Real Estate Agent’s word that you don’t need a DA. In NSW, make sure what you intend to do meets the “Exempt Development” requirements of State Environmental Planning Policy (Exempt and Complying Development Codes) 2008. If you meet the criteria set out in this legislation, happy days, no DA required.

6. Physical Attributes of the building

There are many physical attributes of a building which would be unable to support the upgrades which are required by the BCA or Council. These may include, but not limited to:

• Parking (Certain uses require additional parking spaces, if these spaces cannot be provided, you may be charged a leavy or DA refused)
  
  
• Sanitary facilities (Depending on staff/patron occupancy numbers and building classification, the BCA requires certain number of female/male toilets, urinals, closets etc).

Mechanical Ventilation - if you are doing a restaurant or buying a cafe which has no approval to cook meat and you want to cook, your building needs to be physically able to accomodate a AS1668 commercial grade mechanical ventilation system. You can’t punch a hole through 20 floors of building to run a ventilation shaft and most councils do not like horizontal discharge of vents onto the street.

7. Business Registrations

Certain businesses require registration with Council and other Departments (e.e - Food Authority, NSW Health etc) These include but not limited to: skin penetration, food premises, sex premises. New owners are often required to re-register and registrations may not stay with the premises in perpetuity.

What Can You Do?

You can put in informal and formal access to information via Council to specifically look for DA consents, CC’s, OC’s to establish approved use, approved works, and interpret conditions of consent. If you’re not going to get professional help, do yourself a favor and do these yourself. Tell your friends and family about this and remember - All information and records (other than personal information and copyright items) ARE AVAILABLE FOR PUBLIC ACCESS.

Who Can Help?

Town planners and building surveyors are professionals to consult in this area.

Remember - It all starts with awareness - the above are fundamental things everyone should be looking at when dealing with property. Save your friends and family headaches and spread the word. Certain terms in this post apply to NSW but the principles are the same throughout Australia.


Thanks for reading and good luck!

 

Love the post and info. Keep up the good work Gavin

 

Other rules also apply as to location of exhaust stacks, distance from boundaries etc.

 

Fantastic post.