Property Sector Update: Planning Reforms Hit Home – Week of April 14, 2025

This analysis focuses on key developments from the week commencing April 14, 2025, with particular attention to their potential impact on the Australian property market, particularly concerning planning regulations.

Regulatory Landscape

ASIC Action Against Wiluna Mining Corporation: Continuous Disclosure and Market Confidence

ASIC’s commencement of civil penalty proceedings against Wiluna Mining Corporation Limited (WMC) for alleged breaches of continuous disclosure obligations (ASIC, “ASIC Sues WA Gold Mining Company Wiluna Mining Corporation for Continuous Disclosure and Directors’ Duties Breaches,” Media Release 25-058MR, April 14, 2025), while not directly related to property development, has broader implications for investor confidence in the Australian market. Misleading information regarding capital raising impacts share prices and potentially dries up investment for all sectors, including the property sector. Stricter enforcement in the resources sector could signal a broader regulatory approach toward transparency across all listed entities, potentially influencing developer behaviour and project financing strategies within the property market.

For property developers contemplating listing on the ASX or undertaking capital raising activities, this case highlights the need for rigorous due diligence and transparent communication with investors. Any perceived lack of transparency can significantly affect market sentiment and ultimately impact the feasibility of proposed developments and a developer’s reputation.

Data Room Disclosures: Warranties and the Fine Print

The Federal Court’s decision regarding Self Directed Super Funds Pty Ltd (SDSF) and Bridging Capital Holdings Pty Ltd (BCH) clarifies that simply placing documents in a data room does not automatically constitute “disclosure” for the purposes of information warranties in sale agreements ( *Self Directed Super Funds Pty Ltd v Bridging Capital Holdings Pty Ltd* [2025] FCA 314). This has significant ramifications for property transactions.

Imagine a scenario where a developer sells a partially completed high-rise apartment building. A purchaser conducts due diligence, accessing a data room filled with engineering reports, council approvals, and sales projections. If critical defects or unrealistic projections are buried within those documents and not explicitly highlighted, the developer might still be liable for breach of warranty, even if the information was technically “available” in the data room. This reinforces the importance of clear and explicit disclosure, particularly regarding known issues affecting a property’s value or potential. This judgement shifts the onus onto the seller to ensure the buyer is actively aware of potential issues; it is no longer adequate to provide the information in a data room and assume it has been “disclosed”.

Greenwashing and Consumer Law: Clorox Case

The hefty $8.25 million penalty imposed on Clorox Australia Pty Ltd for misleading “ocean plastic” claims underscores the ACCC’s increasing scrutiny of environmental claims ( *Australian Competition and Consumer Commission v Clorox Australia Pty Ltd* [2025] FCA 357). ACCC Chair Gina Cass-Gottlieb makes the claim that the ACCC “take[s] allegations of greenwashing extremely seriously and will continue to monitor claims made by businesses and where appropriate… take enforcement action on misleading environmental claims.” (ACCC, “Clorox Ordered to Pay $8.25m in Penalties for Misleading ‘Ocean Plastic’ Claims About Certain GLAD Products,” Media Release, April 14, 2025). This has direct implications for property developers who are increasingly marketing their projects based on their sustainability credentials.

This ruling serves as a warning against “greenwashing” in the property sector. Claims relating to sustainability (e.g., energy efficiency, rainwater harvesting, use of recycled materials) must be substantiated and accurate. Developers who exaggerate environmental benefits or misrepresent the source of “sustainable” materials could face significant penalties. This case will likely prompt greater scrutiny of marketing materials and building certifications like Green Star or BASIX.

Over the Horizon: Director Sentiment and Economic Uncertainty

Director Sentiment Index: Navigating Economic Headwinds and Compliance Burdens

The Australian Institute of Company Directors’ (AICD) Director Sentiment Index (DSI) Survey for the first half of 2025 reveals a slight increase in director confidence but continued concerns about economic conditions and, importantly, *legal and regulatory compliance* (AICD, “Director Sentiment Index 1H25,” April 9, 2025).

The survey indicates that directors perceive legal and regulatory compliance as the second most important problem affecting the risk appetite for boards. This highlights the need for increased awareness and understanding of planning regulations among property sector leaders. Given continued concerns about economic conditions, careful consideration of ongoing or upcoming planning regulations becomes all the more crucial for those involved in the property sector, as regulatory changes can affect the risks and benefits of property ventures.

Diversity Initiatives: Challenges and Opportunities Under Economic Downturns

Despite economic headwinds, directors are indicating continued commitment to diversity and inclusion initiatives. While the survey data doesn’t directly impact changes to planning regulations, it does influence how the projects being supported will be conceptualized and implemented. Property development is increasingly recognising  diversity as a benefit, with many projects integrating diverse, accessible design principles.

Source: Industry research and analysis.

This article is based on a report from www.gtlaw.com.au titled “Boardroom Brief Week Commencing 14 April 2025”. You can find the original article here: https://www.gtlaw.com.au/insights/boardroom-brief-week-commencing-14-april-2025