PREFAB REVOLUTION: Navigating Planning Law Requirements for Prefabricated Buildings

This article summarises the current law and case law concerning approvals for prefabricated homes in NSW.

The role of prefabricated buildings in addressing the housing crisis has been the subject of recent media commentary. The NSW Building Commissioner dismissed the concept of prefabricated homes as a panacea to the housing crisis as a pipedream. While the Commonwealth Housing Minister said that “non-traditional” methods of construction should be considered in order to “get homes on the ground as quickly as possible”. Both commentaries were critical of the planning approval process.

On 2 December 2021, the NSW Department of Planning and Environment published a Planning Circular outlining the planning process applicable to “relocatable and flat pack homes” (PS21-016). The Circular highlights the complexity of planning laws relating to these types of “buildings”.

At the core of the confusion is the definition of “building” in the Environmental Planning and Assessment Act 1979 (“EP&A Act”) and the approval requirements for manufactured homes under the Local Government Act 1993 (“LG Act”). A building that comprises one or more major sections and a kitchen, bathroom, bedroom, living area, toilet and laundry facilities is defined as a manufactured home. All prefabricated homes are manufactured homes under planning law.

Under planning law, a manufactured home is not a building as defined in the EP&A Act. The definition of a manufactured home is, in fact, found in the LG Act. A manufactured home is also defined in the State Environmental Planning Policy (Housing) 2021 (“Housing SEPP”). The expression “prefabricated building” is not expressly defined in any planning law in NSW.

The consequence of a manufactured home not being defined as a building is that planning approval is not required for construction of a manufactured home/prefabricated building, but it is required for the installation (or use) of such a structure on the land at which it is placed. Adding to the complexity is that the installation of a manufactured home is also an “activity” that requires an activity approval under the LG Act 1993 as well as development consent under the EP&A Act.

Under planning laws in NSW, a manufactured home is a form of “moveable dwelling”. The installation of two or more moveable dwellings, with access to communal facilities, is a caravan park for the purposes of most local environmental plans. The installation of two or more manufactured homes, without access to communal facilities, is a manufactured home estate under recent amendments to the Housing SEPP. Under the recent amendments to the Housing SEPP, the use and subdivision of a manufactured home estate is permitted with development consent on any land where a caravan park is permitted for use under a local environmental plan.

The complex legal relationship between legislation governing prefabricated buildings has, inevitably, led to litigation in the Land and Environment Court.

In Ogilvie v Rovest Holdings Pty Ltd [2023] NSWLEC 17, the Court invalidated a development consent for the use of prefabricated buildings as a motel. The Court held that the prefabricated buildings were not moveable dwellings. The Court held that the prefabricated buildings were in fact buildings under planning law which meant their installation (as well as their use) required development consent.

In Russell v Camden Council [2018] NSWLEC 1159, the Court upheld an appeal against an order issued by the Council requiring the removal of a prefabricated structure occupied by the extended family of a dwelling house located on the same land. The Council claimed that development consent was required for use of the structure. The Court held that the structure was properly defined as a caravan and no consent was required for its use by family members.

If prefabricated dwellings are to play a role in the housing crisis these complexities need to be resolved.

At Madison Marcus, we understand the complexities involved in planning and environmental laws. Our Planning, Environment, and Government legal services team is dedicated to helping you navigate these challenges effectively, ensuring compliance or advocating for your needs. Whether you are a developer, builder, or homeowner, our expertise ensures you can move forward with confidence in your prefabricated building projects. Let us guide you through the legal maze, turning potential obstacles into opportunities for success.

Explore how Madison Marcus can support your journey in the evolving landscape of prefabricated homes in NSW.