Exempt, CDC or DA: the three pathways for commercial work

The State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (the Codes SEPP) sets two of the three pathways; the third is a development application under the Environmental Planning and Assessment Act 1979. Our CDC vs DA guide covers the general decision; this table shows how it plays out for commercial and industrial work.

The Industrial and Business Codes explained

Commercial and industrial complying development sits mainly in two parts of the Codes SEPP, which were expanded by the Building Business Back Better reforms that commenced on 1 February 2022, and were later updated to refer to the employment zones.

Within Part 5A, the zone-specific building standards (height, setbacks, landscaping and the like) apply only where the development involves building work, and not to internal alterations that do not increase gross floor area. A change of use still has to meet the general standards that apply to every Part 5A development, including parking, any new loading or driveway works, and the caps for particular uses, and the building still has to meet the fire safety requirements for the new use. Part 5A also covers only listed purposes, its “specified purposes”, and excludes others outright, including pubs, small bars, registered clubs and potentially hazardous or offensive industries. New buildings are not covered in Zones E1, E2 or MU1. So the first check is always whether your proposed use and zone are covered.

Employment zones: E1 to E5, MU1 and what they allow

In April 2023 NSW replaced the old business (B) and industrial (IN) zones with employment zones. Leases, older approvals and many websites still use the old names, which causes confusion. The Codes SEPP lists both the new and the old names.

Zone permissibility comes from the council’s LEP; the Codes SEPP then says which of those permitted uses can be approved as complying development. A use can be permitted in the zone and still need a DA because the code does not list it. A planner or certifier confirms both from the LEP and the section 10.7 certificate.

Fit-outs: when they are exempt and when they need a CDC

A fit-out is not a legal category; it is a description of work. Whether it needs approval depends on what the work touches.

The trigger most people miss is egress. A fit-out that subdivides a tenancy, adds meeting rooms or closes a corridor can push travel distances to an exit beyond the NCC limits, or leave a room with only one exit where two are required. Our BCA consultant guide explains why fit-outs are the most common way a compliant building becomes non-compliant.

Change of use: exempt, CDC or DA

A change of use happens when premises start being used for a different purpose: a warehouse becomes a gym, a shop becomes a café, an office becomes a clinic, a factory becomes a self-storage facility. It needs approval even if no building work is done, unless it qualifies as exempt.

When a change of use is exempt

Under Part 2, Subdivision 10A of the Codes SEPP, a change of use can be exempt development only if it is one of the listed pairings (for example shop to office, office to business premises, or light industry to warehouse) and every standard is met: the existing use is lawful and does not rely on existing use rights; the new use is permissible with consent; the building’s classification does not change, other than between Class 5 and Class 6 where the building meets the code for the new use; the new use is not on the excluded list, which includes food and drink premises, hair and beauty salons and skin penetration premises; no building work is carried out other than exempt work; gross floor area does not increase; and existing consent conditions on matters such as parking, traffic and waste, and in some zones hours, are not breached.

When a change of use can be a CDC

Where a change of use is not exempt, Part 5A allows first use and change of use of premises to specified uses in specified zones as complying development, subject to the code’s requirements. Typical CDC changes of use in Sydney include warehouses to gyms or indoor recreation, light industrial units to creative industries or trade showrooms, and vacant shops to food and drink premises. Watch the caps: indoor recreation facilities such as gyms are limited to 1,000 m² of gross floor area, and food and drink premises to 100 patrons.

When a change of use needs a DA

A DA is needed when the new use is not listed for complying development in that zone, the land is excluded, the premises are a heritage item, or the use falls into a category the code excludes (for example hazardous or offensive industry). Childcare centres, places of public worship, pubs, small bars and registered clubs fall here, because they are not specified purposes under Part 5A. Health consulting rooms and medical centres, by contrast, are specified purposes and can be complying development where permissible.

Our fire safety consultant guide explains why changes of use are where fire safety upgrades most often appear.

New warehouses, factories and additions

Part 5A allows new industrial and business buildings and additions to existing ones to be approved as complying development in industrial zones and some business zones (new buildings are not covered in Zones E1, E2 or MU1), provided every development standard is met. In industrial zones the code now allows buildings of up to 50,000 m² of gross floor area, and the standards cover, among other things:

• Building height and gross floor area limits for the zone and lot.
• Setbacks to the street, side and rear boundaries, with greater setbacks and interface controls where the site adjoins a residential zone.
• Landscaping to the street frontage and boundaries.
• Car parking, loading and vehicle access, including manoeuvring for the design vehicle.
• Stormwater, earthworks and retaining walls.
• External finishes and design requirements, including a design statement by a qualified designer for buildings in Zone E3 and the former B5 to B7 zones.
• Hours of operation, set by the CDC conditions where no existing consent condition applies, and other operational conditions for the use.

New warehouses and factories also bring in the full weight of NCC Volume One: fire compartment sizes, sprinkler and hydrant requirements, smoke hazard management, egress for large floor plates, and accessibility to offices and amenities. For a large-volume building, the BCA and fire strategy usually drive the design more than the planning standards. Our Western Sydney industrial and office case study shows how an early BCA upgrade and fire safety strategy kept a project on track.

Parking and loading are the planning standards new industrial buildings most often miss. Where the design cannot meet them, or council’s traffic engineer will need convincing on a DA, a traffic and parking assessment resolves it before lodgement.

BCA and fire safety triggers: where commercial CDCs stall

The planning standards decide whether a commercial project can be a CDC. The National Construction Code decides what it costs. These are the triggers that turn a “simple” fit-out or change of use into a building upgrade.

After the Occupation Certificate, the building owner carries ongoing obligations: maintaining every essential fire safety measure, having it inspected, tested and serviced to AS 1851-2012 where that standard addresses the activity (emergency and exit lighting sits under AS/NZS 2293), keeping the records on site for at least 7 years, and giving an annual fire safety statement. Our articles on annual fire safety statements and the 2026 fire safety reforms explain what that means for tenants and owners.

When a commercial CDC is not available

• Heritage items, apart from limited Heritage Act exemptions.
• Land excluded for the Industrial and Business Buildings Code, including heritage conservation areas, environmentally sensitive land and significantly contaminated land: new buildings and additions are excluded there, but a change of use or internal alterations can still be complying development.
• Environmentally sensitive areas and other land excluded for all complying development.
• BAL-40 and Flame Zone land, and flood or bushfire land that does not meet the code’s standards.
• Uses not listed for complying development in the zone, even if the LEP permits them.
• Hazardous or offensive industry, designated development and uses needing approvals the code excludes.
• Buildings or extensions beyond the code’s height, floor area or setback standards.
• Unapproved existing works or uses. A certifier cannot build on an unlawful starting point; it may need regularising first.
• Land subject to a restriction or a site-specific exclusion stated on the section 10.7 planning certificate.

When a CDC is not available, a well-prepared DA is the route. Built Smart Solutions’ town planning team handles commercial DA preparation and the Statement of Environmental Effects, including the staff numbers, hours, access, loading and waste details councils expect for a change of use.

Worked examples from Sydney projects

These composite examples reflect the kinds of commercial and industrial projects we see across Sydney. Details are generalised.

Commercial CDC costs, and what actually moves the number

Commercial and industrial certification is scoped work, not a list price. Two fit-outs of the same floor area can carry very different fees once the building class, the fire safety measures and the specialist input are known, and a range quoted without that scope tells you very little. What follows is what sets the fee, and what a proposal has to state before you can compare one to another. Construction is excluded.

What a comparable proposal has to tell you

• The BCA classification before and after. And whether the change brings in the fire safety upgrade provisions.
• Which code, or why not. The Codes SEPP part relied on, or the reason the work needs a DA or is exempt.
• What the fee covers. The CDC, the Principal Certifier appointment, each critical stage inspection, the fire safety certificate process and the Occupation Certificate.
• What it excludes. BCA, fire, access and traffic reports, contributions, the Long Service Levy and government fees, stated as excluded rather than simply left out.
• The turnaround. When the CDC will be determined once the application is complete, and the inspection notice period.
• A fixed fee against that scope, rather than an hourly rate with no cap.

Built Smart Solutions quotes every engagement as a fixed fee against a written scope, with the exclusions and the turnaround stated on the same page. Get a fee proposal.

For a commercial tenant, the biggest cost is rarely the approval fee. It is rent on a tenancy that cannot open. A CDC instead of a three-month DA can be worth more than the whole approval budget.

Timelines: CDC vs DA for commercial projects

Common mistakes

Signing the lease before checking the pathway

The rent clock starts on the lease, not the approval. Confirm exempt, CDC or DA and the likely upgrades first.

Treating every fit-out as exempt

Partitions that change exits, services or fire separation take a fit-out out of exempt development.

Ignoring the building classification

A use that changes the NCC class is not an exempt change of use (the narrow exception is Class 5 to Class 6 or back), and it brings the new use’s fire safety requirements with it.

Assuming “permitted in the zone” means “CDC”

The LEP permits the use; the Codes SEPP decides whether it can be complying development. They are different lists.

Using the old zone names

Leases and older approvals still say B5 or IN2. Your LEP now uses E3, E4 and the other employment zones, and that is the zone the code is checked against.

Leaving fire safety to the end

Fire services, the fire safety schedule and the fire safety certificate are where commercial OCs stall. See occupation certificate delays.

Consultants who never speak

A BCA report, fire strategy and access report that describe different layouts stop the clock. See when your reports don’t talk to each other.

Changing the layout on site

A moved wall can lengthen a travel distance and put the fit-out outside its CDC. See why a minor site change can stop your project cold.

Step by step: from lease to Occupation Certificate

1. Confirm the pathway before you commit

   Check the zone, the existing approved use, the proposed use and the NCC classification. Confirm exempt, CDC or DA with a certifier before signing a lease or exchanging.

2. Run a BCA and fire safety capability check

   Identify upgrade triggers (exits, sanitary facilities, accessibility, fire services) and their likely cost, so the business case is real.

3. Design the fit-out or building to the code

   Work to the Part 5 or 5A standards and the NCC from the first layout. Bring in access, fire and traffic input where triggered.

4. Assemble a complete CDC application

   Drawings, BCA report, fire safety schedule, services design, access report, structural and traffic input as needed, and the section 10.7 certificate.

5. Lodge and receive the CDC

   The certifier assesses against the code and the NCC and must usually determine the application within 10 days of lodgement (20 days if it includes demolition or a new dwelling near neighbours in most of metropolitan Sydney).

6. Appoint the Principal Certifier and build

   Give the council at least 2 days’ notice before work starts. The Principal Certifier inspects at the required stages.

7. Fire safety certificate and Occupation Certificate

   A final fire safety certificate is issued on behalf of the owner, certifying that each measure on the fire safety schedule has been assessed by an accredited practitioner (fire safety). Then the Occupation Certificate is issued and the premises can open.

How Built Smart Solutions helps

Built Smart Solutions is a Sydney-based team of registered certifiers, BCA and fire safety consultants and town planners, ISO 9001 certified, with more than 20 years in certification, fire safety and regulatory policy. For commercial and industrial clients, the value is having every discipline that decides a CDC in one team.

Final verdict

Commercial and industrial complying development is one of the most useful and least understood tools in NSW planning. Since the 2022 reforms, many fit-outs, changes of use and new industrial buildings that once needed a DA can be approved by a private certifier, usually within a 10-day statutory period. The catch is that the planning pathway is only half the question. The other half is the NCC: what the new use demands of the building in exits, fire safety, accessibility and amenities.

The businesses that open on time check both before they sign. If you are leasing, buying or building commercial or industrial premises anywhere in Sydney or NSW, Built Smart Solutions will confirm your pathway, scope the upgrades and deliver the CDC, with BCA, fire, access and traffic input from the same team. Get a fee proposal or call (02) 9127 8249.

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