Developer Contributions

Subpart 5 of the Local Government Act 2002 (the Act) sets out the purpose of a development contribution, when they may be required and many other factors.

What is a development contribution and when can they be required?

The purpose of development contributions is to:

…enable territorial authorities to recover from those persons undertaking development a fair, equitable, and proportionate portion of the total cost of capital expenditure necessary to service growth over the long term.

A territorial authority may require a development contribution to be made when :[1]

1. a resource consent is granted for a development within its district;
2. a building consent is granted for building work in its district; or
3. an authorisation for a service connection is granted.

Therefore, when making a request for development contributions or preparing a development contribution policy under the Act, there are various factors that are to be considered.

There are limitations on territorial authorities requiring development contributions.  Development contributions must not be required for a reserve, network infrastructure, or community infrastructure if:

1. there is already a condition on the resource consent, on the same development, for the same purpose;
2. the developer will fund, or otherwise provide for the same reserve, network infrastructure or community infrastructure;
3. a development contribution has already been requested by the territorial authority for the same purpose; or
4. a third party has funded, or undertaken to fund the same reserve, network infrastructure, or community infrastructure.

What can you do if you do not agree with a development contribution?

In the first instance, a request can be made to the territorial authority to reconsider the development contribution/s. The grounds to make this request are:

1. the development contribution was incorrectly calculated;
2. the territorial authority has incorrectly applied their development contribution policy; or
3. the information that was relied on by the territorial authority when requiring a development contribution was incorrect.

This request must be made within 10 working days after receiving notice from the territorial authority of the required development contribution.  When requesting a reconsideration you are principally disputing the territorial authorities process in ordering a development contribution.

After all relevant information relating to the request is received by the territorial authority, it will have 15 working days to give written notice of its decision on the request.  If the reconsideration is successful, the territorial authority may amend the development contribution in light of the evidence provided, withdraw the development contribution or decline the recommendation.  This decision is at the discretion of the territorial authority.

There is an appeal process that allows for you to object to the assessed amount of the development contribution under the Act.[2] An objection can be made on the basis that the territorial authority has:[3]

1. failed to take into account features of the development, on its own or alongside other developments, that would substantially reduce the impacts on other developments for requirements of community facilities in the territorial authority area.
2. required a development contribution for community facilities that is not required, or related to the objectors development;
3. required a development contribution in breach of section 200 of the Act; or
4. incorrectly applied its development contribution policy.

This right to make an objection is not precluded by a developer not requesting a reconsideration under the Act in the first instance.  An objection under the Act does not grant a right to object to the content of the development contribution policy that the territorial authority is acting in accordance with, rather the objection must be based on the decision-making process that the territorial authority has followed.

What happens after an objection is lodged?

If you file an objection under the Act, you are still required to pay the development contribution to the territorial authority.  However, the territorial authority must not use the contribution received until the objection has been determined.[4]

An approved development contribution commissioner (the Decision Maker) will be selected by the territorial authority to decide on the matter.  Normally the Decision Maker must be named in the register of approved development contribution commissioners, however, someone who is not in the register may also hear the matter. When the Decision Maker is considering the objection they will consider the evidence that is provided in support, or against the objection.

The Decision Marker can either uphold or dismiss all or part of the objection.  In making this decision, the Decision Maker is able to quash the development contribution or direct that amendments are made to the contribution as provided in Schedule 13A of the Act.[5]

If you require advice around the objection process for development contributions, then please contact Charlotte Muggeridge.

This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.

[1] Local Government Act 2002, Section 198.

[2] Above at 1, section 199C.

[3] Above at 1, section 199D.

[4] Above at 1, section 199P.

[5] Above at 1, schedule 13A.