The Land and Environment Court accepted the structure was moveable, registrable and not a building. The order to stop living in it stood anyway.
A caravan is not a building. The Land and Environment Court confirmed that on 9 September, and the finding was enough to get a demolition order revoked.
It was not enough to keep anyone living in it.
Kelly v Bega Valley Shire Council [2026] NSWLEC 1588 is being read as a loss for tiny homes. The more useful reading is narrower and far more portable. The court accepted almost every technical argument put for the structure. The use still required development consent, because consent attaches to what land is used for, not to what is parked on it.
The court agreed the structure was a caravan
The facts are ordinary enough to be familiar. A trailer was brought onto rural land in the Bega Valley in February 2023 under an unregistered vehicle permit. A new structure was then built on top of and around that trailer where it sat. The land, roughly 5.79 hectares zoned RU1 Primary Production, already carried two dwellings approved as a dual occupancy of manufactured homes. In June 2025 the council issued two development control orders. One to stop the use. One to remove or demolish.
The council argued the structure had lost the portability needed to be a moveable dwelling. Commissioner Espinosa did not accept that. The trailer carried a vehicle identification number. The aggregate trailer mass was 3,618 kg against a manufacturer limit of 4,200 kg, under the 4.5 tonne threshold that makes it a light vehicle, and within the published dimension limits. Wastewater experts for both sides agreed the structure could be detached from the wastewater system in one to two hours. Adjustable stumps allowed the structure to be lifted and taken away. The bushfire management plan prepared for the land had itself contemplated relocating it in an emergency.
The point that matters for anyone building this product is the test the court applied. The question was not whether the structure looked easily transportable. It was whether it was moveable and capable of registration. Permanent looking fixtures and a conventional appearance did not decide it.
Moveable dwellings sit outside the definition of a building
That finding did real work. Under section 1.4 of the Environmental Planning and Assessment Act 1979, a building takes in part of a building and any structure, but expressly excludes a manufactured home, moveable dwelling or associated structure within the meaning of the Local Government Act 1993. A demolish works order under Schedule 5 can only be directed at a building. Once the structure was a caravan, the order had nothing to attach to, and it was revoked.
Building and premises are not the same thing
Under the Environmental Planning and Assessment Act 1979, a building includes part of a building and any structure, but does not include a moveable dwelling. Premises is a wider term. It takes in land, a moveable dwelling and a vehicle of any description. A demolition order can only be given for a building. A stop use order can be given for premises. The same structure can sit outside one definition and inside the other at the same moment.
That is why the two orders went different ways. A stop use order applies to premises, and premises is defined to include a moveable dwelling and a vehicle of any description. The structure qualified.
The wheels decided what kind of order the council could issue. They did not decide whether consent was required.
Using land for residential accommodation is development, whatever is sitting on it
Development, under section 1.5 of the Act, includes the use of land. Section 4.2 says development that requires consent cannot be carried out without it. Neither provision cares what the dwelling is made of or whether it has a towbar.
The court followed Warrumbungle Shire Council v Yongmei Ou, a 2018 decision of Chief Judge Preston. The reasoning there is blunt. A caravan is not a building, but the land it sits on is a place, and the caravan is the means by which that land is made to serve as somebody’s residence. Using land that way is development, and it needed consent.
The applicant argued that caravans are regulated exclusively under the Local Government Act and that the planning Act had no function in the proceedings. The commissioner rejected that, finding an exemption from a council activity approval cannot oust the application of the planning regime. She also rejected reliance on the existing dual occupancy consent. A consent authorises what it authorises, and it cannot be stretched to pick up further residential accommodation on the same land.
Two approval systems run in parallel and clearing one does not clear the other
This is the part that keeps catching people, and it is not unique to tiny homes. New South Wales runs two separate approval and compliance systems over the same piece of ground. Section 68 of the Local Government Act governs activities, and installing a moveable dwelling on land is one of them. The Environmental Planning and Assessment Act governs the use of land. They are different statutes, different triggers and different exemptions.
Clause 77 of the moveable dwellings regulation is the provision usually cited in support of parking a dwelling on wheels without approval. It exempts a short list of installations, including one caravan on land occupied by the owner of the caravan in connection with the owner’s dwelling house, used for habitation only by the owner or members of that household, and kept in a safe and healthy condition.
Read it again. It is an exemption from the activity approval. It says nothing about development consent.
The commissioner did not decide whether the exemption was even made out on these facts. She found it unnecessary, because satisfying clause 77 could not have changed the result. The clause most often relied on as authority in this space was argued at length and then left undetermined, for the simple reason that it answers the wrong question.
The building reform now passing through NSW leaves the carve out in place
It is fair to ask whether any of this survives the legislative overhaul. On the evidence of the Bill, it does. The prefabricated building framework in the Building (Approvals and Practitioners) Act 2026 states that a moveable dwelling is not a prefabricated building, and its own definition of building excludes moveable dwellings.
The consequential amendments point the same way. Schedule 3 removes only the words manufactured home from the planning Act definition of a building, leaving moveable dwellings sitting outside it exactly as they do now. Schedule 4 rewrites the section 68 table so Part A is headed moveable dwellings and associated structures. The Act was assented to on 14 August 2026 and commences on proclamation, apart from two items.
So the reform pulls factory built housing into the building approval system and deliberately leaves dwellings on wheels out of it. The split this case turned on is not an oversight that is about to be tidied up. It is being carried forward on purpose.
The exposure sits with whoever sells and sites the product
For manufacturers and builders, the commercial consequence is that compliance risk lives at the point of use rather than the point of manufacture. A unit can be engineered properly, weighed correctly, registered lawfully and sold in good faith, and the use of the land it lands on can still be unlawful. Nothing about the build quality of this structure was criticised. The council did not win on the engineering. It won on the land use table.
That table changes by zone and by council. On this land, dwelling houses and dual occupancies were permitted with consent, multi dwelling housing was prohibited, and anything not listed was prohibited by default. The court did not need to decide which limb applied, only that consent was required and had not been obtained. As demand for smaller and factory built housing keeps climbing, the gap between a product that is lawful to own and a site where it is lawful to live is where the disputes are going to sit.
Every state splits vehicle rules and planning rules differently, so the sections do not transfer. The structure of the problem does. Registration answers what the thing is. The land use table answers whether anyone can live in it there. A product can pass the first test completely and fail the second on a block half an hour down the road, and with housing supply pressure pushing more people toward exactly this kind of dwelling, that distance is only getting more expensive to misjudge.
Frequently asked questions
If it is used for residential accommodation, the use of the land is development and development consent is required where the relevant planning instrument says so. The court in Kelly v Bega Valley Shire Council found the consent requirement applied even though the structure itself was accepted as a caravan and not a building.
The court looked at whether it was moveable and capable of registration as a trailer, not at whether it looked transportable. A vehicle identification number, an aggregate trailer mass of 3,618 kg against a 4,200 kg limit, compliance with light vehicle dimension limits, adjustable stumps and a wastewater connection that could be undone in one to two hours were enough.
Clause 77 of the Local Government (Manufactured Home Estates, Caravan Parks, Camping Grounds and Moveable Dwellings) Regulation 2021 exempts certain installations from the council activity approval required under section 68 of the Local Government Act 1993. It does not exempt anyone from the need for development consent for the use of the land. The commissioner found it unnecessary to decide whether the exemption applied here, because it could not have changed the outcome.
A demolish works order under Schedule 5 of the Environmental Planning and Assessment Act 1979 can only be given for a building, and a moveable dwelling is excluded from that definition. A stop use order can be given for premises, and premises includes a moveable dwelling and a vehicle of any description. The structure fell outside one definition and inside the other.
Not in this respect. The Building (Approvals and Practitioners) Act 2026 creates a framework for prefabricated buildings and states that a moveable dwelling is not one. Its amendments remove manufactured homes from the planning Act definition of a building while leaving moveable dwellings outside it. The Act was assented to on 14 August 2026 and commences on proclamation, apart from two items.
Related reading
- NSW Passes New Building Act 2026: construction certificates are on the way out
- Modular, container, tiny home, duplex: the shift in what Australians want to build
- Construction Licensing and Compliance in Australia
Last updated: 14 September 2026.
General information only. This article is general industry commentary and does not constitute legal, financial or regulatory advice. Builders and construction professionals should seek independent professional advice about how planning and building legislation applies to their circumstances.
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