Courts’ views on climate change inundation risks for developments: Australian perspectives and considerations for valuers

Abstract

Purpose This study aims to provide a development of the courts’ views of climate change risk in planning matters as related to inundation and suggest that valuers and others involved need to be aware of the implications these views have on property matters and valuation processes and reporting. Design/methodology/approach This study engages in a legal doctrinal analysis of primary law sources, being Australian case law. It analyses decisions from Queensland, New South Wales and Victorian courts and tribunals, to establish their views of climate change risk for coastal area developments, who bears the risk and responsibility and if risk is shared. Findings The analysis reflects that developers bear the onus of proving their proposal meets relevant planning requirements including management and mitigation of climate change risks. However, the risk of developing in “at risk” areas is a shared burden, as local government authorities remain responsible for appropriately assessing applications against those requirements. Research limitations/implications This study had several limitations, these included: only matters with a final determination were able to be reviewed and analysed; there is no one Australia-wide planning regime; state laws and policies are different and changing; and disputes are heard in different courts or tribunals, which can impact the weight and importance given to issues and the consistency of approaches. Practical implications This research informs valuers of climate change risk issues related to the inundation of new, and re-, developments, and the importance of court decisions as an additional information consideration to inform their valuations. Originality/value This paper is significant as it provides an understanding of the Australian courts’ current views on climate change risk, and by extension, the implications and considerations for valuations.

Physical and climate change-related risk identification in valuation practice: an Australian perspective

“…As recent research has established, climate change events have and will have, detrimental and significant effects for property and property values (Bienert, 2014; Intergovernmental Panel on Climate Change, 2014; Warren-Myers, 2016; Warren-Myers and Hurlimann, 2021). However, climate change risks have received less industry attention (Baldauf et al , 2020), as they are often harder to identify than property-specific risks (Cradduck et al , 2020). Warren-Myers et al (2020a) noted an urgent need for better information, data and quality of information for the property sector.…”

“…Risk identification, and its appropriate consideration, can influence a decision of where to build a home or business, as well as the value of the land on which to build (Cradduck et al , 2020). Risks per se —their identification, nature and impact—require professional appraisal by a valuer when valuing any land (Australian Property Institute and Property Institute of New Zealand [APINZ], 2019).…”

“…The rationale for this research is that the identification and specification of climate change risks is an evolving area of concern (Cradduck et al , 2020; Warren-Myers and Hurlimann, 2021; Warren-Myers et al , 2020b). In particular, the issue of what party bears liability for such risks requires direct consideration.…”

The increasing importance of environmental sustainability in global real estate investment markets

“…More recent environmental sustainability and real estate research has added significantly to the depth of this research around critical issues such as climate change risk issues in real estate/valuation (e.g. Craddock et al. , 2020; Warren-Myers and Craddock, 2022; Warren-Myers et al.…”

“…More recent environmental sustainability and real estate research has added significantly to the depth of this research around critical issues such as climate change risk issues in real estate/valuation (e.g. Craddock et al, 2020;Warren-Myers and Craddock, 2022;Warren-Myers et al, 2020 a, b), energy efficiency and the effectiveness of Energy Performance Certificates (e.g. Fuerst et al, 2011a, b, c), decarbonisation frameworks/ strategies (e.g.…”