Navigating the development of property into a purpose-built childcare facility can be a complex process. It includes obtaining planning approval for the use and development of the site, building approval for construction and service approval by the regulatory authority. In addition, it is necessary to consider leasing requirements including whether a lease is entered into once the childcare centre is constructed or alternatively, entering into an agreement for lease as part of the development process.
There are many stakeholders involved in the process.
We explain some key terms.
Planning Approval
A planning permit may be required for the use and/or development of land in line with local government planning schemes. It will contain conditions that must be met and a set of plans that will be endorsed by Council.
- A ‘planning scheme’ regulates the use and development of land through planning provisions to achieve those objectives and policies
- A ‘zone’ is a way of regulating land use within a planning scheme whereby local governments divide land into zones and set rules and guidelines on how that land may be used
- An ‘overlay’ is an additional lawyer of planning control applied to properties in a clearly defined geographic area within a planning scheme
Most applications for a planning permit will be made to the local council, but some are made to the Minister of Planning.
A planning permit is not a building permit and does not authorise construction (or demolition) of a building.
Building Approval
A building permit will only be issued after a planning permit is obtained (where required) and where any required consent of a reporting authority is received (for example, the water authority where there is a request to build over an easement or an adjoining neighbour where protection works are required).
A building permit is a document that certifies that a proposed building complies with the relevant building regulations, in Victoria being Building Regulations 2018 (Vic). A private or municipal building surveyor will grant a building permit that authorises construction work to be carried out in accordance with approved plans, specifications and other relevant documentation.
The building permit will also specify whether an occupancy permit or a certificate of final inspection is required on completion of the building work.
National Quality Framework
The National Quality Framework sets a national standard for children’s education and care across Australia and has been established by the Australian and state and territory governments to ensure that all children have access to quality early childhood education and care. The framework raises quality and drives continuous improvement and consistency in education and care services. It operates under the Education and Care Services National Law Act 2010 (Vic) (National Law) and whilst it is Victorian legislation rather than Commonwealth, other jurisdictions have adopted this law through an Application Act or passed corresponding legislation with some varied provisions as applicable to the needs of each state and territory.
In Victoria, the Department of Education and Training (DTE) is the regulatory authority that is responsible for:
- Granting service approval and provider approval;
- Carrying out the quality assessment and rating process pursuant to the National Quality Framework; and
- Ensuring education and care services meet the requirements of the National Law and the Education and Care Services National Regulations 2011 (National Regulations).
The Australian Children’s Education and Care Quality Authority (ACECQA) is the national, independent statutory authority governing the National Quality Framework. ACECQA is responsible for ensuring the consistent application of the National Quality Framework, publishing guides and resources for education and care services and maintaining public registers and lists of approved qualifications.
The National Quality Framework generally covers long day care, family day care, preschool (kindergarten) and outside school hours care services, although there are some services excluded by the National Law.
What is Provider Approval?
- Enables childcare providers to apply for one or more service approvals
- Under the National Law, obtaining provider approval is a prerequisite to operating one or more approved services
- A provider approval is ongoing, once granted, except for where it is suspended, cancelled or surrendered
- Valid in all jurisdictions, not specific to one jurisdiction i.e. once provider approval is obtained to operate an education and care service, it is not required to be applied for again in a separate jurisdiction in Australia
- May be granted subject to any conditions that are prescribed in the National Regulations or that are determined by the regulatory authority
What is Service Approval?
- Authorises an approved provider to operate an education and care service
- An approved provider may apply to the regulatory authority for a service approval for an education and care service if the approved provider will be the operator of the education and care service and responsible for the management of its staff and nominated supervision of that service
- A service approval is ongoing, once granted, except for where it is suspended, cancelled or surrendered
- Two types of service approvals –
- [1] centre-based service approval, which includes long day care, preschool (kindergarten), and outside school hours
- [2] family day care service approval
- Service approval will ordinarily prescribe the maximum number of children that can be placed in childcare facility (this is separate to the planning permit and may not be consistent with the planning permit)
- Amongst other things, the regulatory authority will consider the suitability of the premises and site before granting a service approval
Leases v Agreements for Lease
A lease or agreement for lease may be required where, as an owner or property developer, you are constructing a purpose-built childcare centre that will ultimately be used by another party, being the childcare operator.
A ‘Lease’ is a contract between the landlord (owner of the land) and the tenant (occupier of the land).
An ‘Agreement for Lease’ is a contract that contains an agreement between the parties to enter into a lease on agreed terms in the future, subject to certain conditions being satisfied e.g. issue of a planning permit for the use and development of the premises as a childcare centre, constructing the childcare facility, licensing arrangements and so on.
An Agreement for Lease is often used when the premises are being purpose-built for the tenant, such as a childcare centre.
The actual Lease that the parties intend to enter into once the conditions have been satisfied e.g. following construction of a building, is ordinarily prepared at the same time and is annexed to the Agreement for Lease so that the future grant of the Lease is certain at the time the Agreement for Lease is entered into.
An Agreement for Lease is a complex document that, amongst other things, sets out the formula for how rent will be calculated (e.g. based on the approved number of childcare places), when the term of the Lease will commence (e.g. on practical completion of the construction of the childcare centre) and each parties rights and obligations. For example, it may include terms relating to requirements for obtaining a planning permit for the use and development of the land, construction of the building in accordance with plans and specifications, any additional fit-out of the premises by the tenant, service approval being obtained, who bears what costs and so on.
Developing a purpose-built premises can be a disconcerting venture and it is important that you have the right representatives and consultants in your corner.
The property lawyers at Burke lawyers have the expertise and experience to provide tailored advice for any of your property development needs. Whether it's your first development or your tenth. Our property and development legal team lead by Kristy Muhlhan, Accredited Specialist in Property Law can assist. To contact Kristy or her team please contact our office today on +61 3 9822 8588 and email HERE.
