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Peter Rogozik Property Consulting

Understanding Overlays

State and local governments have introduced a greater number of controls on the use of land over the past five years. Also, more land is now subject to overlays than ever before.

Overlays are a restriction on the use of land in a designated area. In many cases, if a property is affected by an overlay a planning permit is required for the construction of a building and/or other changes to the land.

There are many types of overlays. The following are some of the more common overlays found in the Melbourne metropolitan area.

Heritage Overlay: places of heritage significance can be protected by a Heritage Overlay. Heritage Overlays are contained within local council planning schemes and assist in protecting the heritage of a municipality. These overlays require a planning permit for buildings and works.

Special Building Overlays: this type of overlay identifies areas prone to overland flooding. The purpose of these overlays is to set appropriate conditions and floor levels to address any flood risk to developments. These overlays require a planning permit for buildings and works.

Environmental Audit Overlay: the Environmental Audit Overlay (EAO) seeks to ensure that potentially contaminated land is suitable for its intended use. These are sites with suspected contamination or adjacent to known contaminated sites.

When a Planning Permit is applied for with the local council, and the site is covered by an EAO, the council will require an auditor to prepare either a Statement or Certificate of Environmental Audit. These audits state suitable uses and any conditions required.

In the sale of residential property overlays are disclosed in the planning certificate, which forms part of the vendor’s statement. It is possible for land to be subject to more than one overlay.

Before signing a contract of sale, it is important that buyers understand the implications of purchasing a property that is affected by an overlay.


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