22 Sep 2011Blog

What every developer needs to know about Town Planning Law in Barbados

by Creig Kinch, Senior Associate, Clarke Gittens Farmer

Clarke Gittens Farmer LogoIn Barbados, physical development and land use planning are regulated by the Town and Country Planning Act (‘the Act’) and its related rules.

Under the Act a developer is required to make an application for permission to:

  1. Carry out any building, engineering, mining or other operations in, on over or under any land;
  2. make any material change in the use of any buildings or land; or
  3. subdivide any land.

Applications for permission

The Town and Country Development Planning Office (“TCDPO”) is the Government department responsible for managing all applications for permission to develop land.

A Town Planning consultant should be retained to assist in an application for permission to develop land or change the use of a property or building.

Where the application concerns the development of either beach front land or the change of use of agricultural land over 2 acres, the application is automatically referred to the Minister responsible for Town Planning. In all other instances it is referred to the Chief Town Planner.

One of the tools used in assessing applications is the Physical Development Plan (copies of which can be obtained from the TCDPO).

The Physical Development Plan zones the island into specific areas in which certain types of development may be permitted and other types prohibited. A developer should consult the Physical Development Plan to ensure that the parcel of land or the building he intends to purchase can be used for the type of development he has in mind. A developer should also consult the Physical Development Plan to determine the likely success of an application to change the use of land or a building.

Generally, refusal of a Town Planning application is not grounds to terminate a sale agreement. Where a developer is purchasing a property for development that requires permission from the TCDPO the developer should make the agreement for sale subject to obtaining that permission. This will ensure that the developer does not become stuck with property he cannot use for the development he or she had in mind.

Categories of property use

Categories of property use mentioned in the Physical Development Plan Amended (2003) include:

  1. Centres and Mixed Use Corridors;
  2. Shopping Centres;
  3. Tourism Areas;
  4. Residential Areas;
  5. Major Industrial Areas;
  6. Natural Resource Reserves; and
  7. Golf Course Development and Rural Settlements.

The areas designated as Centres include:

  1. The National Centre which is Bridgetown;
  2. Regional Centres like Speightstown, Holetown, Oistins and Six Roads;
  3. Suburban Centres like Warrens and Wildey;
  4. Local Centres like Hastings, Eagle Hall and Worthing.

The National Centre is intended to serve as the primary focus for major office, government, and shopping functions in Barbados. Regional Centres are intended for a wide range of uses including a strong residential component. Suburban Centres are areas located on main highways where commercial development is permitted and are expected to be developed in a more automobile-oriented form than the National Centre. Local Centres are intended for commercial development which serves the community as well as residential development.

Mixed use Corridors (where commercial, residential, institutional and tourist related development is permitted) include areas like Collymore Rock, the South Coast and Bay Street.

Permissions and Certificates of Compliance

An application can be approved with or without conditions or it may be refused. Where the Chief Town Planner refuses to grant permission an applicant may appeal to the Minister responsible for Town Planning. This appeal must be made within 28 days from the date the applicant receives the Chief Town Planner’s decision. Where an application is approved with conditions they must be satisfied.

Generally, a developer cannot legally complete sale of the lots or houses in a development without obtaining a certificate of compliance. A certificate of compliance is issued when the Chief Town Planner is satisfied that the planning permission conditions have been sufficiently met.

Most attorneys acting for purchasers advise their clients not to complete the sale without the certificate of compliance for the development to the property. This is because a purchaser of property subject to unsatisfied conditions may be required by the Chief Town Planner to satisfy them. However, where the development to the property is more than four (4) years old, the purchaser’s attorney may accept an affidavit from the vendor stating that there has been no development to the property within the last four (4) years requiring permission from the Chief Town Planner.

Town Planning concerns

Set out below are some areas of concern for real estate developers:

Delays

The TCDPO strives for efficiency and excellence. However, applications to the Chief Town Planner can take some time before being considered, and available dates for site visits for the final approval of buildings and issue of certificates of compliance may be far in the future because of the intense pressure for appointments. Certain types of developments in particular face possible additional delays:

  • CONDOMINIUMS

In order for a particular building to be classified as a “condominium building”, a declaration must be filed at the Land Registry confirming that the building (which need not be fully constructed) will be subject to the Condominium Act Cap. 224A. The condominium declaration must be accompanied by certain plans and drawings which must be approved by the Chief Town Planner. This approval can take some time to be obtained. Without it the condominium declaration cannot be filed and consequently, no condominium units can be sold or mortgaged.

  • SHORELINE DEVELOPMENT

There is a coastal zone management plan which has been developed by the Coastal Zone Management Unit (“CZMU”), outlining the overall plan for the management of coastal zone areas in Barbados.

Where a site chosen for development falls within the coastal zone management area, TCDPO refers the application to CZMU for its input. CZMU usually carries out a detailed study of these applications to determine if Barbados’ delicate marine ecosystem will be placed at risk as a result of the proposed development. Given the exhaustive nature of this study CZMU’s input and approval can take some time to be obtained.

In addition, if any development is planned which may impact on any shoreline or marine area in Barbados (even if it is not in a coastal zone management area), an environmental impact assessment for development may be required by the TCDPO from the developer in order to determine how the development may affect the conservation and management of coastal resources.

Under the coastal zone management plan, there are some areas in which no development can take place at all, such as parts of Ragged Point and Long Bay in the parish of Saint Philip and Archer’s Bay in the parish of Saint Lucy.

Where beach front land is involved, the TCDPO will generally require the developer to provide a public access to the beach, which will have to be of a standard acceptable to the TCDPO and will have to be maintained.

Financing

Most local purchasers of units or lots in a development seek financing from banks or other lending institutions to facilitate their purchase. Most banks require security for their loan, which will usually take the form of a mortgage over the property being purchased. A buyer cannot give a bank a mortgage over a parcel of land or a condominium unit until a conveyance to him has been made. To give the conveyance, the developer must have obtained a certificate of compliance from the Chief Town Planner.

Where the development includes not only the sale of subdivided lots but also the building of houses or town houses this may create a catch 22 situation. The Chief Town Planner may include in his permission a condition prohibiting the sale of the subdivided property until essential services such as roads, lighting and sewerage services are installed. Practically, most developers prefer to install roads towards the end of major construction in the development to limit damage to the new roads and curbs by heavy equipment.

Further, if the developer starts building any houses in the development before a certificate of compliance for the subdivision is obtained the developer may have to wait until all the houses in the development are completed before a certificate of compliance is issued.

For a developer who is relying on the sale of lots to fund the development this can pose a problem. The developer will either have to:

  1. put in the roads and utilities, obtain a certificate of compliance for the subdivision, convey the land to the purchasers and then build the houses under a separate building contract, or;
  2. build the houses, put in the roads and utilities, obtain the certificate of compliance and then convey the land and house to the purchaser.

With the first option a developer may have to spend quite a lot of money repairing the roads after all the houses have been completed. A developer who chooses the second option may want to consider obtaining financing from a bank to help fund the project.

A similar scenario can occur in a condominium development, where a conveyance cannot be made to a purchaser until the plans and drawings have been approved by the Chief Town Planner and the condominium declaration has been filed and a condominium unit exists to be conveyed. This can create cash flow problems for a developer relying on sales of units to fund the development.

Infrastructure

As part of the conditions subject to which permission for development is granted, the Chief Town Planner may alter the infrastructure of the development or require the installation of additional utilities. The Chief Town Planner may change the gradient of the roads, require the installation of a specific drainage system, require additional parking be provided, vary the size and number of lots or require sidewalks be constructed where none previously existed.

These changes can have added financial costs to a developer which were not budgeted for and they can affect the overall profitability of a development. They can also delay the completion of the development which in turn can affect the amount of interest a developer who has financed his project through a bank has to pay overall.

Where a developer is purchasing land for development he/she should, if possible, negotiate with the vendor to purchase it subject to acceptable TCDPO approval for the proposed development. This will protect the developer should the requirements of the Chief Town Planner make the project financially impracticable.

Trees

The Town and Country Planning Act gives the Minister responsible for Town Planning the power to make orders to preserve trees or woodlands in any part of the Island. The Minister or Chief Town Planner may prohibit the removal of certain trees in the proposed development or grant permission to cut down existing trees but order new trees replanted in the development in specified areas. This can alter the proposed layout of development and additional costs and delays may be incurred if the developer has to redesign a development to take these conditions into account.

Ponds, Lakes & Pools

A developer who wishes to put in man-made ponds, lakes or pools should be aware that TCDPO may impose strict conditions to prevent flooding onto adjacent lots. The TCDPO may also require a large developer whose project includes several water features to provide a plan showing how the water to support these will be provided, and to provide for disposal of chlorinated water.

Parting shot

Town Planning law can pose many challenges to a developer. However, with good legal counsel and the advice of a competent Town Planning consultant a developer can successfully undertake his or her project.

Clarke Gittens Farmer is a commercial law firm, providing legal services for both domestic and international corporate and private clients. The firm has a reputation for high quality work in property, banking, corporate, commercial and business law areas. The firm is the Barbados member of Lex Mundi, the world’s leading association of independent law firms.
The information provided in this article is not comprehensive and is not intended to constitute professional legal advice.