Common Compliance Issues in Dual Occupancy and Townhouse Pro

Why Compliance Issues Derail Dual Occupancy and Townhouse Projects

Dual occupancy and townhouse projects remain among the most active development types across Melbourne’s Eastern Suburbs — yet they also generate a disproportionate share of planning permit delays, VCAT appeals, and costly redesigns. With Victoria’s planning system undergoing its most significant reforms in decades, the compliance landscape has shifted considerably since 2024. Developers who rely on outdated knowledge or assume council discretion will paper over design shortfalls are increasingly finding themselves exposed.

The introduction of the Townhouse and Low-Rise Code (Amendment VC267, effective 2 April 2025), the updated Clause 54 standards under Amendment VC282 (effective 8 September 2025), and the landmark Planning Amendment (Better Decisions Made Faster) Act 2026 have collectively reshaped how dual occupancy and townhouse applications are assessed, approved, and appealed. For developers, this creates both opportunity — faster approvals for fully compliant projects — and risk, where non-compliance now carries fewer escape routes than before.

This article outlines the most common compliance issues SQM Architects encounters across projects in the City of Whitehorse, City of Boroondara, Manningham City Council, City of Monash, Knox City Council, and Maroondah City Council — and how to address them before they become expensive problems.

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The 2025–26 Regulatory Shift: What Developers Must Understand

Victoria’s planning reforms represent a fundamental change in how residential development applications are assessed. The Townhouse and Low-Rise Code, which amended Clause 55 of the Victorian Planning Provisions, introduced fully codified "deemed to comply" standards for developments of two or more dwellings up to three storeys. Where all standards are met, the responsible authority is generally required to issue a planning permit — though overlay triggers and other site-specific factors may still affect the outcome — and third-party objectors have no VCAT appeal rights against that decision.

This is a significant departure from the previous system, where neighbourhood character assessments were qualitative and councils retained broad discretion. Under the new framework, compliance is binary: either a proposal meets the measurable standard, or it does not. There is no longer a middle ground where a sympathetic planner might exercise discretion in a borderline case. For developers, this means the design must be right from the outset — not negotiated into compliance during assessment.

The Planning Amendment (Better Decisions Made Faster) Act 2026 further restructures the permit system into three tiers. Dual occupancies and small subdivisions are expected to fall under Type 1 (targeting a 10-day approval timeframe with a deemed approval mechanism if the responsible authority fails to decide in time). Townhouses and low-rise apartments are anticipated to be Type 2, with a 30-day approval timeframe. These timeframes create pressure on both applicants and councils to submit complete, compliant applications from day one.

Title and Zoning Issues: The Compliance Killers Nobody Checks First

One of the most preventable — and most common — compliance failures occurs before a single drawing is produced. Title encumbrances, particularly restrictive covenants, can render a dual occupancy or townhouse project legally impossible regardless of how well the design complies with ResCode or the Townhouse and Low-Rise Code.

Many properties in Melbourne’s Eastern Suburbs, particularly those in estates developed between the 1950s and 1970s, carry "single dwelling" covenants on title. These covenants are enforceable by neighbouring landowners and cannot be overridden by a planning permit. A planning permit does not extinguish a restrictive covenant — a separate Supreme Court application or a planning scheme amendment under the Planning Amendment (Better Decisions Made Faster) Act 2026‘s updated covenant provisions may be required. Discovering a covenant after design documentation is complete can cost developers months and significant fees.

Section 173 Agreements — legal agreements between a landowner and a council registered on title — present a similar risk. These may restrict further subdivision, limit dwelling numbers, or require specific land uses. Easements, particularly rear drainage easements, also constrain buildable area in ways that are not always apparent from a site inspection. A thorough title audit, including a review of the planning certificate and title plan, should be the first step in any dual occupancy or townhouse feasibility assessment. For more on common mistakes in Victoria land subdivision, including title issues, see our dedicated guide.

• Check title for restrictive covenants, particularly "single dwelling" clauses common in pre-1980s estates
• Review all Section 173 Agreements registered on title before committing to a development programme
• Identify all easements and confirm whether proposed building footprints encroach on easement areas
• Obtain a planning certificate to confirm zoning, overlays, and any bushfire or flood designations
• Confirm the planning scheme zone permits dual occupancy or multi-dwelling development as of right or with a planning permit

ResCode Non-Compliance: The Most Frequent Causes of Permit Delays

Even with the shift to codified standards, ResCode compliance failures remain the leading cause of planning permit delays for dual occupancy and townhouse projects. Under the new deemed-to-comply framework, a non-compliant standard cannot simply be argued around — it requires either a redesign or a formal alternate design response that must satisfy the relevant objective. The latter path reintroduces council discretion and, in some cases, third-party appeal rights.

The most frequently non-compliant standards across Eastern Suburbs projects include overshadowing, side and rear setbacks, and garden area. Overlooking provisions under the Townhouse and Low-Rise Code have been updated — notably, the requirement to screen bedroom windows has been removed, which improves internal amenity but changes the compliance calculation for upper-level windows facing neighbouring properties. Developers designing to pre-2025 standards may inadvertently over-screen or under-screen windows, creating unnecessary cost or genuine non-compliance respectively.

Garden area requirements are a persistent issue on smaller lots. The 25% garden area requirement — calculated against total site area — is frequently underestimated during feasibility, with driveways, paved courtyards, and building footprints consuming available permeable space before the requirement is properly mapped. Amendment VC282 introduced a new tree canopy requirement of one canopy tree per 100 square metres of site area for Clause 54 applications, adding a further constraint that must be factored into site layout from the earliest design stage.

Key ResCode compliance areas to address at design stage:

• Street setbacks: Under VC267, the standard 6-metre street setback applies in most residential zones — some councils previously enforced 9-metre setbacks via local schedule variations, but more restrictive local variations have now been removed following Amendment VC276
• Site coverage: VC282 updated site coverage from a flat 60% across all residential zones to zone-specific rates — confirm the applicable rate for your site’s zone
• Overshadowing: VC282 increased allowable overshadowing of secluded private open space to 50% — a more permissive standard than previously applied
• Private open space: Reduced from 80 square metres to 20% of lot area (minimum 25 square metres) for Clause 54 applications, with alternative compliance via balcony or rooftop area
• Tree canopy: New requirement of one canopy tree per 100 square metres of site area under VC282 — must be shown on landscape plans
• Car parking: 1 space per 1–2 bedroom dwelling; 2 spaces per 3+ bedroom dwelling — inadequate provision remains a common refusal ground

Overlay Compliance: The Hidden Layer Most Developers Miss

Planning overlays apply additional controls on top of zone requirements and ResCode standards. Failing to identify and respond to applicable overlays at the design stage is one of the most costly compliance errors in dual occupancy and townhouse projects — not because overlays are obscure, but because developers and their consultants sometimes treat overlay identification as a secondary task rather than a primary design constraint.

Design and Development Overlays (DDOs) are particularly prevalent across Eastern Suburbs councils. The City of Whitehorse applies DDO schedules in established residential areas that specify requirements for building materials, roof forms, front fence heights, and neighbourhood character responses that go beyond standard ResCode provisions. City of Boroondara’s heritage overlays affect a substantial proportion of its residential land, requiring heritage impact assessments and design responses that demonstrate sensitivity to the heritage context. Manningham City Council applies Significant Landscape Overlays (SLOs) in areas with notable vegetation, imposing tree removal permit requirements and canopy retention obligations.

Flood and inundation overlays administered by Melbourne Water require referral and may impose floor level requirements, drainage conditions, and building envelope restrictions that fundamentally alter development feasibility. Bushfire Management Overlays, while less common in the inner Eastern Suburbs, apply to parts of Knox City Council and Maroondah City Council and add BAL (Bushfire Attack Level) assessment requirements and construction cost premiums. Cultural Heritage Management Plans may be required for sites within or near areas of cultural heritage sensitivity — failing to identify this requirement early can delay lodgement by months.

Documentation Failures: Why Well-Designed Projects Still Get Refused

Under the new deemed-to-comply framework, the quality and completeness of application documentation has become more critical than ever. A planning permit application that cannot demonstrate compliance against each applicable standard — with clear, coordinated evidence — will not benefit from the deemed-to-comply pathway, regardless of how well the underlying design performs.

Common documentation failures across dual occupancy and townhouse applications include inconsistencies between architectural drawings and shadow diagrams, landscape plans that do not demonstrate garden area compliance or canopy tree requirements, stormwater management reports that are not coordinated with the site layout, and traffic and access reports that do not address council-specific crossover requirements. Each of these gaps creates grounds for the responsible authority to request further information, resetting statutory timeframes and delaying approval.

With the tiered permit system under the Better Decisions Made Faster Act 2026 placing greater emphasis on upfront completeness — particularly for Type 1 and Type 2 applications targeting 10-day and 30-day approval timeframes respectively — incomplete applications will increasingly result in formal rejection rather than requests for further information. Developers should treat application documentation as a compliance exercise in its own right, not a formality to be completed after design is finalised.

Essential documentation for dual occupancy and townhouse planning permit applications:

• Architectural drawings (site plan, floor plans, elevations, sections) fully dimensioned and coordinated
• Shadow diagrams at the equinox (22 September) at 9am, 12pm, and 3pm
• Landscape plan prepared by a qualified landscape designer, showing existing and proposed vegetation, garden area calculations, and canopy tree locations
• Stormwater management report coordinated with site layout and drainage easements
• Traffic and access report addressing crossover locations, sight lines, and parking layout
• Arborist report for any significant trees within or adjacent to the site
• Heritage impact assessment where a Heritage Overlay applies
• Cultural heritage screening assessment where required

For a full overview of occupancy permit requirements in Victoria, including post-construction compliance documentation, see our dedicated guide.

Tree Protection: An Increasingly Significant Compliance Risk

Tree protection compliance has become a more prominent issue following the introduction of canopy tree requirements under VC282 and the retention of Significant Landscape Overlays across Eastern Suburbs councils. Developers who treat trees as obstacles to be removed rather than design constraints to be managed are encountering increasing resistance from responsible authorities — and, in some cases, enforcement action.

The "3-metre rule" is a practical starting point: any significant tree within 3 metres of a proposed building footprint — including trees on neighbouring properties — may have a Tree Protection Zone (TPZ) that encroaches on the development site. TPZ calculations are based on trunk diameter and can substantially reduce the buildable area available on a site. An arborist report prepared early in the design process can quantify TPZ constraints and inform building footprint decisions before documentation is produced.

Crossover locations present a related compliance risk. A second driveway — required for side-by-side dual occupancy configurations — may be refused by the responsible authority where a street tree, power pole, or bus stop is located at the proposed crossover point. This can effectively prevent a side-by-side configuration on certain lots, making a tandem arrangement (one dwelling behind another via a common driveway) the only viable option. Confirming crossover feasibility with the relevant council and utility authorities before committing to a site layout can prevent significant redesign costs.

Council-Specific Variations Across the Eastern Suburbs

While the 2025–26 reforms have removed many more restrictive local schedule variations, council-specific requirements continue to apply across the Eastern Suburbs in areas not overridden by state standards. Understanding these variations is essential for developers working across multiple council areas.

City of Whitehorse maintains stringent neighbourhood character provisions in Garden Suburban precincts, with DDO schedules specifying requirements for building materials and roof forms. The council’s approach to tree canopy retention is particularly active, with landscape plans scrutinised closely against the new VC282 canopy tree requirements.

City of Boroondara has the highest concentration of Heritage Overlay-affected land in the Eastern Suburbs. Dual occupancy and townhouse projects in heritage precincts require heritage impact assessments and design responses that can significantly influence building form, materials, and setbacks.

Manningham City Council applies Significant Landscape Overlays across substantial areas of its residential land, particularly in hillside and vegetated areas. Tree removal permit requirements and canopy retention obligations under these overlays add complexity to site layout decisions.

City of Monash has active neighbourhood character policies in established residential areas, and its planning scheme retains local policy provisions that inform assessment of applications not fully resolved by deemed-to-comply standards.

Knox City Council and Maroondah City Council both have areas subject to Bushfire Management Overlays, adding BAL assessment and construction cost considerations for affected sites. Both councils also have active tree protection policies that interact with the new canopy tree requirements under VC282.

Frequently Asked Questions: Common Compliance Issues in Dual Occupancy and Townhouse Projects

Does the Townhouse and Low-Rise Code apply to all dual occupancy projects in the Eastern Suburbs?

The Townhouse and Low-Rise Code (amended Clause 55, effective 2 April 2025) applies to developments of two or more dwellings on a lot up to three storeys in height. For dual occupancy projects where subdivision creates two separate titles each with one dwelling, Clause 54 may apply instead. The applicable clause depends on the specific configuration and subdivision approach — a site-specific assessment is needed to confirm which provisions govern your project.

What does "deemed to comply" mean in practice for my townhouse application?

If your townhouse application meets all standards under the Townhouse and Low-Rise Code, the responsible authority is generally required to issue a planning permit and third-party objectors have no VCAT appeal rights against that decision. However, if any standard is not met — or if overlays apply to the site — the usual planning permit process including appeal rights will apply. Full compliance from the outset is therefore essential to access the streamlined pathway.

Can a restrictive covenant on title prevent my dual occupancy project?

Yes. A restrictive covenant — particularly a "single dwelling" covenant common in pre-1980s estates — is enforceable by neighbouring landowners and cannot be overridden by a planning permit. A separate legal process, such as a Supreme Court application or a planning scheme amendment, may be required to remove or modify the covenant. Title review should be the first step in any dual occupancy feasibility assessment.

How have the 2025–26 reforms changed VCAT appeal rights for townhouse projects?

Under the Townhouse and Low-Rise Code, if an application meets all deemed-to-comply standards, there are no third-party VCAT appeal rights relating to those standards. The responsible authority also cannot refuse the application on those grounds. If a standard is not met, or overlays apply, the usual appeal rights continue to apply. The Better Decisions Made Faster Act 2026 further restructures the permit system with tiered approval timeframes, though the detailed regulations are still being developed.

What are the most common reasons dual occupancy applications are refused or delayed in the Eastern Suburbs?

The most common issues include title encumbrances (covenants and Section 173 Agreements) not identified at feasibility, ResCode non-compliance with garden area, setback, or car parking requirements, failure to identify and respond to applicable overlays, inadequate or inconsistent application documentation, and tree protection issues arising from TPZ encroachments. Addressing these issues at the design stage — rather than during assessment — is the most effective way to avoid delays.

Do I need an arborist report for my dual occupancy planning permit application?

An arborist report is required where significant trees are present on or adjacent to the site, where a Significant Landscape Overlay applies, or where tree removal is proposed. Given the new canopy tree requirements under VC282 and the active tree protection policies across Eastern Suburbs councils, engaging an arborist early in the design process is strongly advisable for most dual occupancy projects — not just those with obvious vegetation constraints.

How does the new tiered permit system under the Better Decisions Made Faster Act 2026 affect my project timeline?

The tiered system — with Type 1 targeting 10-day approvals for simple proposals including duplexes and small subdivisions, and Type 2 targeting 30-day approvals for townhouses and low-rise apartments — is intended to deliver faster decisions for compliant applications. However, the detailed regulations prescribing which applications fall into each category are still being developed. Developers should monitor updates from the Department of Transport and Planning as implementation progresses through 2026.

Conclusion: Compliance Is a Design Decision, Not an Afterthought

The 2025–26 planning reforms have fundamentally changed the risk profile of dual occupancy and townhouse projects in Melbourne’s Eastern Suburbs. The shift to codified, deemed-to-comply standards removes much of the discretionary buffer that previously allowed borderline applications to succeed through negotiation. Today, a non-compliant application is a delayed application — and in some cases, a refused one. The developers who are achieving the fastest approvals and the strongest development outcomes are those who treat compliance as a design input from day one, not a checklist to be completed at lodgement.

SQM Architects has delivered hundreds of projects across the Eastern Suburbs, with a strong repeat client base reflecting a compliance-led approach to design and documentation. Our team maintains current working knowledge of the Townhouse and Low-Rise Code, VC282, VC267, and the evolving requirements under the Better Decisions Made Faster Act 2026 — helping developers work through the regulatory requirements from feasibility to permit application with greater clarity.

Book a Free Strategy Session — speak with SQM Architects (ARBV Reg. No. 51498) about your dual occupancy or townhouse project in Melbourne’s Eastern Suburbs.

This article provides general information about Victorian planning for property developers. It does not constitute professional advice. For specific guidance on your project, contact SQM Architects (ARBV Reg. No. 51498) for a complimentary site assessment.