The path to profit in land development is paved with exciting opportunities – and often hidden pitfalls.

Some projects face what our team at Millar Merrigan has coined ‘the 7 deadly sins of land development’, based on Victoria’s planning schemes.

Many, but not all, of the issues that can halt a project can be found through due diligence assessments. A full feasibility study can provide a high-level assessment of development reward and risk, enabling a developer to make an informed call before beginning a project.

However, even the most diligent due diligence can only uncover some of our ‘deadly sins’. This is for the first 5 of our sins:

1. 1. 1. Title, boundaries, owners corporations, easements and covenants.
      2. Planning controls and policies.
      3. Services and the cost.
      4. Heritage concerns.
      5. Environmental, contamination, flooding and bushfire.

This means we can confidently anticipate only around 70% of the project variables; we can make assumptions about the remaining 2, but we cannot know whether they will occur or what their impact may be as we cannot control them. These final 2 sins are:

1. 1. 6. Change and the force of politics.
      7. Decision makers and people.

These risks must be considered in the decision to proceed, project cost, feasibility and time factors.

While a feasibility assessment and due diligence can unveil many potential roadblocks, challenges exist that can derail even the most carefully planned project. Some can even, unexpectedly, be made unable to continue. Unfortunately, that’s a risk that comes with land development.

At Millar Merrigan, we’ve had almost 60 years in the industry navigating this complex terrain and finding solutions.

1: Boundaries and ownership

Title-related problems, such as boundaries, adverse possession, owners corporations, easements and covenants, can significantly impact development opportunities.

A thorough check of title documents at the commencement of a project is critical to understanding potential risks that could impact its success.

The number one issue to consider is any covenants and other title restrictions. It is not uncommon to find restrictive covenants registered on titles in Victoria and the classic problem covenant we encounter is those that restrict development to a single dwelling on a lot. The presence of a title restriction, such as a covenant, must be carefully considered, as it may jeopardise the viability of a development proposal.

What may come as a surprise to some is that a lack of easements on your property can be a negative. For example, easements, which provide the legal right to drain through other land, not being there can lead to problems; while there are options to acquire required easement rights, this often requires a considerable amount of extra effort and cost.

Dealing with common property and owners corporations for infill projects can be problematic and potentially fatal to a project. For example, changes to common property boundaries could require 100% of the owners to agree – this can often be a high hurdle!

Boundaries being ‘out’ is seen on projects on any scale, but particularly larger or greenfield sites; this means that the boundary, according to any physical markers, is different to what was originally intended and documented.

Over time, the physical acceptance of property boundaries, through fences and other structures along boundary lines, can lead to ownership rights. Legally, land that has been continually occupied for at least 15 years may be capable of being claimed through adverse possession.  Ensuring a thorough analysis of title documents by experienced practitioners and a site survey by a licensed surveyor are essential steps at the beginning of every project. Resolving title issues can be expensive, especially if legal action is required.

2: Planning controls and policies

An understanding of the nuanced local planning regulations, including ‘hidden’ policies, is crucial to avoid delays and unexpected roadblocks.

Utilising the VicPlan website can provide information about the applicable zone and any overlays for a parcel of land. While this information is a great starting point, it doesn’t always provide the full picture.

Staying updated on any changes in the planning schemes is vital, as is an understanding of any council’s nuances, either through local policies or through the varied application of the raft of applicable policy and planning controls.

In Maroondah City Council, for example, several overlays control development potential, including Design and Development Overlays (DDOs) with minimum lot sizes and Significant Landscape Overlays (SLOs) prioritising the importance of vegetation retention over urban consolidation policies.

Sometimes councils can have policies that they have adopted but are not part of a planning scheme and therefore tend to be ‘hidden’ from practitioners unfamiliar with a municipality. An example of this are the engineering policies at the Shire of Yarra Ranges. Being aware of such ‘requirements’ is potentially critical when considering project viability and designing to meet them from the outset can avoid lengthy delays. 

3: Service costs

Having an accurate estimate of the cost of a project overall is crucial for any developer to determine project feasibility.

A project’s feasibility relating to the cost of the project is best determined from the outset, so that way, an early call can be made, rather than wasting time and cash. This can be particularly make or break for small-scale and mum & dad developers.

Similarly sized projects may have widely varied costs, often due to the complexity of extending required services such as drainage, electricity, water and sewerage to the project. This means that a lack of services can deem a project unviable, due to high service connection costs significantly impacting the budget. Further, securing and installing services can delay project timelines.

For large development sites, the scale of the project often means that there are more options for solutions. Early negotiation with service authorities and an understanding of the regulatory framework that they operate under are crucial.

Recently, we were able to work with Goulburn Valley Water on behalf of a developer for a multi-staged subdivision in the south-east growth area of Kilmore. Together, we developed a solution that saw the extension of the existing sewerage and water network to facilitate the continued growth of the suburb and provide an important housing option for new residents. 

4: Heritage considerations

Identifying and addressing potential concerns regarding both Aboriginal and post-European settlement heritage is essential to avoid project delays, or even cancellations.

The Aboriginal Heritage Act requires thorough assessments and can lead to substantial delays and costs if sensitive sites are found. Archaeologists and Registered Aboriginal Parties are involved in identifying sensitive sites, digging investigation pits and looking for artefacts, such as stone flakes, from past human habitation.

Development of a site with identified Aboriginal heritage significance requires the preparation of a Cultural Heritage Management Plan (CHMP). A required CHMP has been known to delay projects over 12 months and incur costs exceeding $50-$100k. Outlays of this magnitude can often only be borne by larger development proposals and the risk of this cost and delay needs to be factored into all developer feasibility assessments.  

Post-European heritage is often easier to be aware of, as the heritage significance will typically be documented in a planning overlay or heritage citation. Heritage significance can be a noteworthy barrier to development potential.

5: Environmental factors

Environmental issues such as contamination, flooding (including future threats of it, based on modelling), bushfire risks and the presence of endangered species must be carefully evaluated for responsible development.

This sin has so many considerations, it could form its own article. One area to consider – bushfire – already has! Bushfire considerations including bushfire management overlays, bushfire prone areas and prioritising the protection of human life above all other considerations have already been covered in a more extensive bushfire article available here.

A notable site contamination example comes from an early 2000s Brunswick development project of 49 apartments. After being built, they had to be abandoned due to the discovery of severe soil contamination from a nearby dry cleaner who had been illegally disposing of their chemicals. This contamination was so extensive that it rendered the site unsafe for residential use. The apartments were subsequently demolished, rehabilitated and redeveloped 12 years later.

Flora and fauna and the need to protect biodiversity can be a significant development constraint and sometimes from surprising critters! In Gippsland, the presence of the endangered giant earthworm requires careful planning to avoid disrupting the species’ habitat across large spans of earth.

The golden sun moth is another endangered species of consideration. They live as larvae underground for years before surfacing for just 2 to 5 days – it pops up on sites with native grassland regularly, but you must be on site at the right time during the summer months to see them make their brief excursion into the world. If they do appear, there may be a need to retain habitat areas or to provide cash for the protection of habitat elsewhere as a trade-off.

The Melbourne Strategic Assessment (MSA) is a good example of a comprehensive plan using levies collected from developed areas to protect habitat through a strategic and structured approach.

Stormwater flooding is set to be a major issue in 2025; new flood modelling is due to be released towards the end of the year and there will be many new properties that will be constrained by this updated modelling, which we understand could impact around existing properties around Melbourne.

6: The force of political change

Now, we move to consider the uncontrollable deadly sins – change and the force of politics, and decision makers and people.

Political changes and shifts in planning attitudes or laws can impact development projects. Staying informed about potential changes and understanding the political landscape is crucial for risk management.

Political changes can alter the viability of projects, with potential for it to be influenced in positive or negative ways. Some political changes can lead to alterations of planning policies which positively impact the level of housing provided, whereas some may restrict what is possible to achieve on any given lot.

For instance, the introduction of the Neighbourhood Residential Zone (NRZ) in 2013 limited developments to a maximum of 2 dwellings per lot, remarkably affecting project plans. The restriction was subsequently removed, but in the interim, many developers were significantly impacted.

Political shifts can also bring changes to regulations or public sentiment, further impacting project feasibility.

In 2024-25, the Australian Government under the Labour Party have enacted substantial changes to planning provisions, particularly concerning infill housing development. It will be interesting to see if planning for new housing becomes a key political issue at the next 2026 state government election.

7: The human factor

Dealing with various decision-makers brings an unpredictable element into the process. Whether it’s planners; authorities such as water, gas and electricity suppliers; councils; state governments, or; tribunals like the Victorian Civil and Administrative Tribunal (VCAT), there’s always an element of unknown in this space.

Regardless of the rules, there is always a person deciding about the application of the rules or policies. Authorities play a vital role in the development process. The decisions of the people who are in these roles are ultimately what we need to deal with. The ability to understand authority requirements, build trust and negotiate appropriate outcomes are vital skills for successful land development consultants.

Avoiding purgatory: considerations for your project

Don’t forget that with any land development project comes risk, no matter how much due diligence is completed. Factors like political changes and decision-maker attitudes are beyond our control, but must be factored into project feasibility and cost assessments.

Navigating these hurdles is a challenge that requires experience and expertise to overcome. With almost 60 years in the industry, Millar Merrigan is uniquely positioned to ensure your project is the best it can possibly be.

Let us help make your next project a success, and get in touch with our experts today.