Glossary
Development approval (DA)
Also called: DA, planning permit, development consent
A development approval is a decision by a planning authority allowing a proposed use or building works on a site, usually with conditions. The name and process vary by state, including development consent and planning permits.
An example
A developer buys a site with an existing planning permit for townhouses. The lender reviews the permit and its conditions to confirm the project the developer plans to build matches what the approval allows.
Why it matters
Planning status strongly affects a site's value and the type of finance available. Sites without approval carry more risk, which is why pre-development funding is priced and structured differently from construction finance.
Points to check
Read the conditions attached to the approval, because they can add costs such as contributions, design changes or works outside the site. Check when the approval lapses and what must happen to keep it current. Lenders usually want to see the approval, the endorsed plans and evidence that conditions can be met before funding construction. If you plan to modify the approval, ask how long the process takes in your area.
Read about pre-development and da funding