crown land leasing policy leasing guidelineslease are of a substantial nature and of a value which...
TRANSCRIPT
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Leasing Policy for Crown Land in Victoria 2010
Crown Land Leasing Guidelines Leasing Legislation
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Contents
1. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Crown land leasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2. Legislation governing Crown land leasing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.2 Crown Land (Reserves) Act 1978 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
2.3 Land Act 1958 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.4. Forests Act 1958 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.5 Agreements to Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.6 Legislation that affects the grant of Crown land leases . . . . . . . . . . . . . . . . . . . . 14
Appendix A – Other Leasing Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
1. Crown Land (Reserves) Act 1978 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2. Land Act 1958 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3. Land (Surf Life Saving Association) Act 1967 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Appendix B – Summary of Leasing Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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This guideline has been developed by the Public Land Division of the Department of Sustainability and Environment (DSE) to explain the key legislative provisions for Crown land leasing. The guideline accompanies the Leasing Policy for Crown land in Victoria 2010 and applies to leases made under the:
• CrownLand(Reserves)Act1978;
• ForestsAct1958;and
• LandAct1958.
It is the first in a series of guidelines addressing the key statutory, policy and procedural requirements associated with Crown leasing.
The guidelines are intended to help Crown land managers – including local and state government agencies and committees of management appointed under the Crown Land (Reserves) Act 1978 make decisions about leasing Crown land. The guidelines will also benefit current and prospective tenants of Crown land.
Please note that the information contained in this guideline is not exhaustive and is a summary of the main provisions. For specific issues, it may be necessary to seek independent legal advice or consult with DSE.
Land Managers and prospective tenants need to be aware of the statutory requirements associated with the granting of Crown land leases when planning and preparing a lease submission to DSE. The legislative requirements must be addressed to ensure the lease is valid and, if these are not fulfilled, the lease may be void, unenforceable or have unintended consequences.
1. Introduction
Photo courtesy of Bellarine Bayside Foreshore Committee of Management
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1.1 Crown land leasingAbout one third of Victoria is Crown land allocated for a range of public uses including national parks and state forest, recreation areas, hospitals and sporting facilities. The Minister for Environment and Climate Change (the Minister) is responsible for administration of the Acts which govern the management of this land which amongst other things enable the granting of leases.
Most leasing of Crown land in Victoria is on land reserved under the Crown Land (Reserves) Act 1978 (CLRA). There are approximately 7,400 Crown land reserves in Victoria and these are managed by a diverse range of land managers including local government, statutory bodies such as water corporations and government agencies including Parks Victoria. Land managers are appointed as a committee of management or trustees under the CLRA. Under the CLRA, a committee of management or trustees may grant a lease with the prior written approval of the Minister.
The Minister alone has authority to grant leases under the Land Act 1958 (LA) and the Forests Act 1958 (FA) and in some situations may also grant leases on reserved land under the CLRA. Leases may also be granted under the provisions of the National Parks Act 1975 however the statutory and policy requirements of leasing in national parks are very different from those under the other acts mentioned. Therefore, the process of granting leases under the National Parks Act 1975 is outside the scope of this guideline. Also outside of the scope of these guidelines is leasing by alpine resort management boards under the Alpine Resorts (Management) Act 1997.
It is important that DSE and land managers as responsible land management agencies have clear and objective grounds to base their leasing decisions. In addition, prospective tenants must be aware of legislative, policy and process requirements associated with the granting of Crown land leases.
Reference is made throughout the guidelines to the “Minister” with regard to the various leasing powers. However, the Minister has authorised DSE officers to act on his/her behalf in relation to carrying out most of the ministerial functions associated with the granting of leases. The Minister does this through the delegation power contained in the Conservation Forests and Land Act 1987. There are a number of exceptions where no delegation exists and these are identified.
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2.1 BackgroundThe following sections cover the main statutory requirements to grant a lease under the:
• Crown Land (Reserves) Act 1978 (CLRA),
• LandAct1958(LA);and
• ForestsAct1958(FA).
An overview is also provided of other key pieces of legislation which may be relevant in relation to the granting of a Crown lease. These are:
• Planning and Environment 1987
• Coastal Management Act 1995
• Retail Leases Act 2003
• Native Title Act 1993
• TraditionalOwnerSettlementAct2010.
There are a number of less commonly used leasing provisions in the CRLA and LA. A summary of these provisions is contained in Appendix A together with a description of the leasing power in the Land (Surf Life Saving Association) Act 1967. Appendix B is a table summarising the leasing provisions discussed.
2. Legislation governing Crown land leasing
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2.2 Crown Land (Reserves) Act 1978
2.2.1 Section 17D Crown Land (Reserves) Act 1978
The most commonly used leasing provision in the CLRA is section 17D. This section allows committees of management to grant leases, whereas the leasing powers in the LA and FA are solely available to the Minister for Environment and Climate Change as the responsible Minister for the relevant lands legislation.
Section 17D(1) provides for the grant of a lease over any class of Crown land reserved under section 4 of the CLRA for any purpose (regardless of whether or not the permitted use under the lease is consistent with the reserve purpose).
Leases under section 17D are granted by:–
• thetrusteesorcommitteeofmanagement(appointedundersections12and14oftheCLRArespectively);or
• theMinisteriftherearenotrusteesorcommitteeofmanagement1.
The maximum term for which a lease may be granted under section 17D is 21 years. Before the trustees or committee of management may grant a lease the Minister must approve:–
• thegrantofthelease(pursuanttosection17D(1));and
• thepurposeofthelease(pursuanttosections17D(1)).
For the Minister to give approval to the grant and purpose of a lease under section 17D, the Minister must be satisfied that the purpose for which the lease is to be granted is not detrimental to the purpose which the land is reserved (refer to section 2.2.5 of this guideline).
Other criteria must be met for certain categories of reserved land that are subject to a parliamentary scrutiny process, which is discussed in the next section.
The process for obtaining ministerial approval to the grant and purpose of the lease forms part of the Approval in Principle submission to the Minister. 2
Unless otherwise directed by the Minister, trustees and committees of management are required to expend lease rental funds on the reserve under their control.
1 The exception to this is the power provided to the Governor in Council, who on the joint recommendation of the Minister responsible for the CLRA and the Minister responsible for the Health Services Act 1988, may confer leasing powers under section 17D to the Minister for Health (section 17AB of the CLRA). The Department of Health and hospital networks manage a substantial property portfolio on Crown land including many leased properties and this provision is to enable the Minister for Health to issue leases.
2 Leasing Policy for Crown Land in Victoria 2010. Page 7.
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2.2.2 Section17DAParliamentaryscrutinyofcertainproposals
SomecategoriesofreservedCrownlandmayonlybeleasedundersection17Difadditionalrequirementsaresatisfied(refersection17D(2)).ThesereservationpurposesareshowninFigure1.
Figure 1
• the preservation of areas of ecological significance
• the conservation of areas of natural interest or beauty or of scientific historic or archaeological interest
• the preservation of species of native plants
• the propagation or management of wildlife or the preservation of wildlife habitat
• public parks gardens and ornamental plantations; and
• the protection of the coastline.
There are two exceptions to the general leasing prohibition of certain categories of reserved Crown land. The first applies if the purpose of the proposed lease is consistent with an approved recommendation of the Victorian Environmental Assessment Council (VEAC) and its predecessors.
If there is not an approved VEAC recommendation, the Minister may only approve a lease being issued if the Minister is satisfied the following criteria apply to the lease:
• thattherearespecialreasonswhichmakegrantingoftheleasereasonableandappropriateintheparticularcircumstances;and
• thegrantofaleasewillnotbesubstantiallydetrimentaltotheuseandenjoymentofanyadjacentlandreservedundertheCLRA.
If the Minister is satisfied that these criteria have been met the Minister may then sign an Order approving the grant of the lease. The Order must also then be published in the Victoria Government Gazette. Once published in the Gazette it is treated as a statutory rule for the purposes of the Subordinate Legislation Act 1994. This means that a copy of the notice must be:
• laidbeforebothHousesofParliamentbeforethesixthsittingdayafterpublication;and
• postedordeliveredtoeachmemberofParliamentwhohasrequestedacopy.
The signed Order is subject to scrutiny by Parliament and can be disallowed by resolution of either House of the Parliament. A resolution to disallow a notice must be given within 5 sitting days after it is laid before Parliament. The resolution must then be passed on or before the tenth sitting day after the notice of resolution has been given. If no resolution is given within 5 sitting days or passed within a further 10 sitting days, the lease proposal can proceed.
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The Minister’s powers under this section are not delegated.
2.2.3 Section17CA–Leasesforupto65yearsforotherpurposes
A term of 21 years is sufficient to accommodate the purposes of most leases. However, for projects funded by tenants or of a large scale, a term of more than 21 years may be preferable to enable the tenant to amortise that investment or to allow a development to proceed. Section 17CA is intended to facilitate projects of this type. Under this section the term of a lease must be more than 21 years but not more than 65 years. The lease may be for any purpose (whether consistent with the reserve purpose or not).
Leases under section 17CA may only be granted by the Minister. The Minister may grant a lease under this section over land managed by trustees or a committee of management or where there are no trustees or committees of management.
Under section 17CA(1), before the Minister may grant a lease, the Minister must provide a statement that the Minister is satisfied that:–
• thepurposeforwhichtheleaseistobegrantedisnotdetrimentaltothepurposeforwhichthelandisreserved;and
• theproposeduse,development,improvementsorworksthatarespecifiedintheleaseareofasubstantialnatureandofavaluewhichjustifiesalongerterm;and
• thegrantingofalongertermleaseisinthepublicinterest.
Under section 17CC, for Crown land managed by trustees or a committee of management, the Minister must also ensure that consultation is conducted with the trustees or committee of management prior to the grant of the lease. The Leasing Policy for Crown Land in Victoria provides that in order for the Minister to assess any proposal to grant a lease under this section, a business case must be prepared.
The provisions of section 17CA cannot be used to lease land reserved for the purposes noted in Figure 1, section 2.2.2 of this guideline except for land reserved for:
• publicparks,gardensandornamentalplantations;or
• theprotectionofthecoastline(ordeemedtobereservedfortheprotectionofthecoastline).
Any proposal to lease land reserved for the above purposes under section 17CA is subject to a parliamentary scrutiny process under section 17CB which is similar to that outlined in section 2.2.2 of this guideline. Specifically, if the Minister is willing to grant a lease under section 17CA, the Minister is required to:
• makeadeterminationoftheMinister’sintentiontograntalease
• publishthatdeterminationintheVictoriaGovernmentGazette
• arrangetohavethedeterminationlaidbeforeeachHouseofParliament.
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The signed determination is subject to scrutiny by Parliament and can be disallowed by resolution of either House of Parliament. A resolution to disallow a determination must be given within 5 sitting days after it is laid before Parliament. The resolution must then be passed on or before the tenth sitting day after the notice of resolution has been given. If no resolution is given within 5 sitting days, or passed within a further 10 sitting days, the lease proposal can proceed.
If the Minister grants a lease of land under section 17CA (1), section 17CC(2) allows for the management of the lease to be carried out by the trustees or committee of management by way of insertion of suitable conditions into the lease. Section 17CC further provides that a power given to trustees or a committee of management to manage a lease made under section 17CA(1):
• doesnotextendtoempoweringthetrusteesorcommitteeofmanagementtovary,amendorterminatethelease;
• mayextendtoempoweringthetrusteesorcommitteeofmanagementtocollectanytolls,fees,rents,royaltiesorotherchargesthatmaybeimposedinrespectto the leased land.
Section 17CC further provides that any money collected or retained by trustees or a committee of management under the lease must be expended on the land in respect of which the money is collected or retained.
The Minister’s powers under this section are not delegated.
2.2.4 Ministerapprovesleasetermsandconditions
Section 17D(4) of the Act applies to leases granted under sections 17D and 17C and specifies that a lease shall be subject to such covenants, exceptions, reservations and conditions as determined by the trustees or committee of management and approved by the Minister, or determined by the Minister alone if the land is not managed by a committee of management or trustees.
These are wide-ranging powers which leave substantial scope for negotiating conditions. Following considerable consultation and discussion, DSE has prepared standard documents which should be used in order to expedite the lease preparation process. If parties wish to vary these documents all variations must be approved by DSE.
The power to approve the terms and conditions of leases made under section 17D may be delegated by the Minister. Currently, there is no delegation for the granting of a long term lease made under section 17CA.
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2.2.5 Isthepurposeofaleasedetrimentaltothepurposeofthereserve?
Each of the three leasing provisions described above requires the Minister to make a decision on whether or not a lease proposal is likely to be detrimental. This decision is important because it is a primary threshold that must be cleared before a lease proposal can proceed further.
If the Minister’s approval to the grant and purpose of the lease requires parliamentary approval, as described in section 2.2.2 of this guideline, the lease must not be “substantially detrimental to the use and enjoyment of any adjacent reserved Crown land”.3
This differs from the requirements relating to other leases granted under section 17D and section 17CA, where the Minister must be satisfied that “the purpose for which the lease is being granted is not detrimental to the purpose for which the land is reserved”.4
While these criteria vary slightly, the process for determining whether the lease proposal is detrimental is similar.
The CLRA does not define the types of lease purposes that are detrimental to the various reservation categories. This means that each lease proposal must be considered on a case-by-case basis, taking the particular circumstances into account, so that DSE may make an appropriate recommendation to the Minister.
To do this it is important for a committee of management or trustees to confirm which reservation purpose applies to the proposed lease area. Confirming the reservation purpose will provide some initial guidance on whether the proposed lease may or may not be detrimental to the reservation purpose. The CLRA provides for more than thirty different purposes for which land can be reserved, however this list is not exhaustive and land can reserved for any public purpose. The precise description is made by an Order approved by the Governor in Council which is published in the Government Gazette. If the reservation purpose is not known, the parties should make enquiries at their local DSE office.
When the reservation description has been confirmed, the committee of management or trustees should then consider a range of factors discussed below in assessing the merits of any lease proposal. A statement of these merits should then form part of any lease application made by the committee of management or trustees to DSE. This information will assist DSE in its evaluation of the lease proposal including whether the required statutory criteria can be satisfied.
3 Section 17D(3)(a) CLRA4 Sections 17D(3)(b) and 17CA(2)(a)
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A wide range of factors may be relevant in making the assessment of any lease proposal. These include:
• IsitnecessarytoleasereservedCrownlandfortheproposeduseunderthelease?Cantheproposedusebeaccommodatedonfreeholdland?Ifnot,whynot?
• Isthereademonstrablepublicandeconomicbenefit?
• Willtheproposeduseresultinthelossofopenspaceusedbythegeneralpublic?Ifso,towhatextent?
• Canthelossoffreeandunrestricteduseandaccessbythepublicoftheproposedleaseareabejustifiedinthecontextoftheareaofthewholereserve?
• IsitproposedthatnewbuildingswillbeconstructedwhichmayimpactonadjoiningreservedCrownland?
• Wouldnaturalvaluesbeaffected,forexample,istheremovalof vegetationnecessary?
• Istheuse/developmentsubjecttoamanagementplanapprovedbyDSE?
• Doestheproposalhavecommunitysupportandhowhasthatsupport beengauged?
• Whattype(s)ofcommunityconsultationhasbeenundertaken?
• Istheproposalconsistentwithothergovernmentpolicyobjectivesorlegislation?
Through the above assessment, a clearer picture will begin to emerge about the suitability of the proposal to a specific reserve and whether it is likely to have a detrimental impact. This may lead to the conclusion in some cases that a lease proposal, while being consistent with the reservation purpose, would have a detrimental impact. Alternatively, it may be concluded that while a lease purpose is inconsistent with the reservation purpose, the use is assessed as being not detrimental. Because of the various issues that can be peculiar to a specific reserve and lease proposal all applications need to be assessed on a case by case basis.
Please note that it is the Minister (or his delegate where applicable) who must be satisfied that any lease purpose is not substantially detrimental or not detrimental (dependent on the reservation purpose as discussed previously) as part of the statutory lease approval process. DSE may make recommendations regarding a proposed lease, but the final decision remains with the Minister (or delegate).
The committee of management or trustees provide details of the assessment as part of the Approval in Principle to lease process which is described in section 5.3.1 of the Leasing Policy for Crown Land in Victoria 2010.
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The following case studies are included to provide practical examples of reserve purposes, lease purposes and consideration of the proposed use of the land.
Case Studies
Case Study 1
Reserve Purpose Health and Social Welfare Purposes
Lease Purpose Services for people with a disability including adult training, respite care
and opportunities for community volunteering.
Consistent? Yes. The lease purpose aligns closely with the reservation purpose.
Detrimental? Unlikely to be detrimental however each application needs to be assessed
on a case by case basis.
Case Study 2
Reserve Purpose Hospital Purposes
Lease Purpose Florist Shop
Consistent? No
Detrimental? While not consistent with the reservation purpose, a florist shop on land
reserved for hospital purposes can form part of the normal operations
of a hospital, providing services to the staff and broader community as
well as rental income to the hospital committee of management. The
assessment is likely to conclude that the proposed use is not detrimental
to the purpose of the reserve.
Case Study 3
Reserve Purpose Public Recreation
Lease Purpose Sporting and ancillary activities associated with a Football and Cricket
Club, including but not limited to: sporting events, training, associated
retail activities and office administration.
Consistent? Yes
Detrimental? Possibly. While the purpose of the lease is consistent it might be assessed
as detrimental if it were determined the size and scale of the capital
works proposed under the lease would have a detrimental impact on the
use of the land for its reserved purpose
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2.2.6 OtherCrownLand(Reserves)Act1978leasingprovisions
The CLRA contains a number of other leasing provisions. These include:
• Section16(2)–leasesforlandvestedinmunicipalcouncils
• Section22(1)–leasesforlandusedforhorseracingandgreyhoundracing
• Section23(1)–leasesforlandreservedforaerodromepurposes
Details of the legislative requirements associated with the granting of leases under these provisions are contained in Appendix 1.
2.3 Land Act 1958
2.3.1 Section134
The LA is the precursor of all Crown land legislation in Victoria. Its primary purpose is to provide for the sale and occupation of unreserved Crown land in Victoria including leasing and licensing.
The most commonly used leasing provision in the LA is section 134. Leases made under section 134 are granted by the Minister alone. There is no provision for committees of management or trustees to grant leases under the LA.
Section 134 allows the Minister to grant leases for any purpose except agriculture. Under normal circumstances the term of a lease under section 134 is limited to a maximum of 21 years. However, in some special circumstances, leases can be granted for longer periods, such as:
• upto50yearsmaximumforcommercialorindustrialpurposes;
• upto99yearsmaximumforcommercialorindustrialpurposesiftheMinisterissatisfiedthatimprovementsareorwillbeofasubstantialnatureandvalue;and
• upto99yearsmaximumwheresubstantialexistingimprovementswhicharethepropertyoftheCrownareinvolved.
Under the LA, the same requirements as in the CLRA regarding the preparation of a business case apply to proposals for leases greater than 21 years.
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2.3.2 Advertising
Section 135 of the LA provides that a lease of Crown land made under section 134 may be made by private negotiation or be offered by public auction or tender. Under section 137, if a lease is granted following private negotiation the tenant is required to publish a notice in the Government Gazette and a local newspaper at least 14 days before the grant of the lease. The notice must specify the particulars of the land the purpose and term of the lease and the name of the proposed tenant.
Under section 136, if the lease is offered by public auction or tender the Minister is required to give at least 14 days notice in the Victoria Government Gazette and a local newspaper specifying the date of the auction or closing of tenders, the particulars of the land and the purpose and term of the proposed lease.
In addition, the requirements of the Leasing Policy for Crown land in Victoria must be addressed in advertising offers to lease.
2.3.3 Section134–Termsandconditions
A lease under section 134 can be granted by the Minister “...subject to the conditions, covenants, reservations, restrictions and exceptions which he thinks fit.”5 As with leases under the CLRA, DSE policy is that a standard leasing agreement will be used for leases made under section 134.
A lease under section 134 may provide for:
• thepaymentofthewholeoranypartoftherentalinadvanceandtherefundofthewholeorpartoftherentalintheeventofforfeiture(Section137AAA);and
• areviewofrentalnotmorethanonceduringeach12monthperiodofthelease(section137AB).
The power to approve the terms and conditions of leases made under section 134 may be delegated by the Minister for leases which have a term of up to a maximum term of 50 years. There are no delegations with respect to the granting of leases for a term greater than 50 years under the LA.
5 Section 134(1) Land Act 1958
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2.4. Forests Act 1958
2.4.1 Section51
The FA establishes a framework for the management, use and conservation of forests. It also contains provisions for leasing and licensing of reserved forest (as defined in the FA) by the Minister. Leases made under section 51 may only be granted by the Minister.
Under section 51(1) of the FA, the Minister may grant a lease of land encompassing reserved forest for a term of up to 21 years for any purpose that the Secretary of DSE recommends. Generally, there are limited opportunities for leasing in State Forest and those leases which have been issued have been for purposes such as tourism and telecommunications.
The FA contains similar provisions to those in the CLRA for long-term leasing. Under section 51(2) of the FA the Minister may lease reserved forest for a term of more than 21 years but not more than 65 years, provided that the Minister is satisfied that:
• theproposeduse,development,improvementsorworksthatarespecified intheleaseareofasubstantialnatureandofavaluewhichjustifiesalonger termoflease;and
• thegrantingofalongerleasetermisinthepublicinterest.
As with other Crown land leases, the Leasing Policy for Crown Land in Victoria specifies that in order for the Minister to assess any proposal to grant a lease under this section a business case must be prepared.
2.4.2 Termsandconditions
A lease under section 51 is granted by the Minister “…subject to the covenants, terms and conditions that are determined by the Minister and the payment of royalties as determined by the Minister”.6
The power to approve the terms and conditions of leases made under section 51 may be delegated by the Minister where the lease term is up to a maximum term of 21 years. There is no delegation with respect to the granting of leases for a term greater than 21 years under the FA.
6 Section 51 (3)(a) and (b)
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2.5 Agreements to LeaseThe CLRA, LA and FA provide for the making of “Agreements to Lease”.
Specifically:
• section17D(1B)oftheCLRAprovidesthattrusteesorcommitteesofmanagement,withtheapprovalinwritingoftheMinister,mayenterintoanAgreementtoLeaseforaleasegrantedundersection17D(1).TheMinisteralonemayalsoenterintoanAgreementtoLeaseforleasesofupto21years
• section17CA(6)oftheCLRAprovidesthattheMinistermayenterintoanAgreementtoLeasewithrespecttolandleasedundersection17CA.Thisappliestoleasesofupto65years.
• section51(4)oftheFAprovidesthattheMinistermayenterintoan Agreement to Lease.
• section134(1A)oftheLAprovidesthattheMinistermayenterintoanAgreement to Lease.
An Agreement to Lease is a contractual agreement under which a Crown land manager, on condition that all agreement pre-conditions are fulfilled within a set timeframe, undertakes to grant a lease to a proposed tenant. Pre-conditions may include the lease proponent obtaining necessary finance for the project, obtaining all planning approvals or carrying out a works program. In the event agreement pre-conditions are not met within the time frame, the Crown land manager is not under an obligation to enter into the lease and the agreement is at an end.
All of the relevant legislation relating to Agreements to Lease for Crown land provides that the period for which an Agreement to Lease and lease can be issued cannot exceed, when added together, the maximum lease term permitted under the relevant section.
2.6 Legislation that affects the grant of Crown land leasesIn addition to the Acts which enable Crown land managers to issue a lease, a lease must be issued in accordance with any other relevant laws.
The following is a summary of the main pieces of legislation which may impact on the grant of a lease.
2.6.1 PlanningandEnvironmentAct1987 (Vic)
The Planning and Environment Act 1987 (P&E) establishes a framework for planning in the context of the use, development and protection of land in Victoria. Crown land managers and tenants must comply with relevant local planning schemes and obtain any required permits associated with the use of leased premises.
If a planning scheme does require a permit for a use and/or development proposed under a lease a permit must be obtained before the lease will be issued. This is to avoid uncertainty over the purpose and conditions of a lease which may be found to be unlawful if planning approval is not obtained.
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As the representative of the “owner” of the land being leased, DSE has a role under the P&E in providing consent to an application for a planning permit. This capacity also applies to land managed by committees of management. In addition, DSE may have a role as a referral authority under the planning scheme regarding a range of matters such as native vegetation protection. In this capacity, DSE may comment on the permit, require additional conditions or object to the permit being granted.
It is important to note that maintenance and minor works such as routine painting, gardening and repairs are not usually within the definition of development works and do not normally require a planning permit. However, DSE makes no representation in this regard and this should be confirmed with the relevant planning authority.
2.6.2 CoastalManagementAct1995 (Vic)
The Coastal Management Act 1995 (CMA) applies to all coastal land in Victoria. The CMA defines coastal Crown land as:
• anylandreservedundertheCLRAfortheprotectionofthecoastline;
• anyCrownlandwithin200metresofthehighwatermarkofthecoastal watersofVictoria;
• anyseawithinthelimitsofVictoria;
• theseabedofthecoastalwatersofVictoria;and
• theseabedofanyseawithinthelimitsofVictoria.
Under the CMA, any proposed use and development of coastal Crown land (including a use and development proposed under a lease) requires the consent of the Minister for Environment and Climate Change (or delegate). The P&E and the CMA are linked. If a planning permit application is made under the P&E and is referred to DSE as the referral authority on Crown land, the referred application is deemed to be an application for consent under the Coastal Management Act 1995.
In deciding whether or not to consent to a permit application, the Minister will consider (amongst other things) the proposal in context of the Victorian Coastal Strategy 2008. In particular, the Minister must evaluate whether the proposed use and development takes into account:
• theenvironmental,socialandeconomicimplicationsoftheproposal;
• thevaluesofcoastalresources;and
• theimpactsofanyproposeddevelopmentoncoastalvalues.
As with a permit under the P&E, a permit under the CMA must be obtained before the lease will be issued.
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2.6.3 RetailLeasesAct2003 (Vic)
The Retail Leases Act 2003 (RLA) applies to leases of retail premises and affects Crown land managers who act as landlords. The RLA defines “retail premises” as “premises, not including any area intended for use as a residence… used, or are to be used, wholly or predominantly for the sale or hire of goods by retail or the retail provision of services”. In general, where the tenant’s goods or services are paid for or used by members of the public the premises will be retail. It should be noted that this is not an exhaustive definition. If there is any possibility that the RLA may apply the parties should seek independent legal advice.
As a primary objective of Crown land leasing is to enhance the community’s use and enjoyment of Crown land, many of the leases granted by land managers are for retail premises. These include leases for cafes, kiosks, restaurants, caravan parks and many other premises where goods or services are provided to the general public.
Since the introduction of the RLA a number of premises have been excluded from the requirements of the RLA through ministerial determinations made under section 5 of the RLA. The most important of these determinations to Crown land leasing came into effect in August 2004 and exempts leases where:
• thetermoftheleaseis15yearsorlonger;
• therearenooptionsforadditionaltermswithinthefirst15yearterm;and
• theleaseimposesobligationsonthetenantoranyotherpersontocarryoutsubstantialworkonthepremisesorpreventsthetenantfromremovingtheleasedimprovements.
Land managers should obtain independent legal advice on the impact of the RLA on a proposed lease and their responsibilities as landlord before starting negotiations with a prospective tenant.
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2.6.4 NativeTitleAct1993(Cth)
Native title is the recognition by Australian law that Traditional Owners (as defined under the Native Title Act 1993 (NTA)) have rights and interests to their land that come from traditional laws and customs. The NTA establishes a mechanism for determining claims for rights and interest by traditional owners.
In Victoria native title rights and interests may include rights to:
• accesstheareafortraditionalpurposes,suchascampingortocarry outceremonies;
• visitandprotectimportantplacesandsites;
• hunt,fishandgatherfoodortraditionalresourceslikewater,woodorochre;and
• teachlawandcustomoncountry.
Proposed activities or developments on Crown land that may affect native title are classed as “future acts” under the NTA. A lease of Crown land is a future act and lease proposals and other future acts, such as works programs, must be assessed under the future act regime to determine what, if any, procedural rights apply to the proposal.
As part of the lease preparation process, DSE will arrange for a native title assessment to be undertaken. The result of the assessment is communicated to all parties.
2.6.5 TraditionalOwnerSettlementAct2010 (Vic)
The Traditional Owner Settlement Act 2010 (TOSA) provides the Victorian Government and Victorian traditional owner groups an alternative legislative pathway to the NTA to settle native title claims and to resolve issues of land justice.
The TOSA allows the Victorian government to make agreements with traditional owners to recognise their relationship to land and provide for certain rights on Crown land and other benefits. By entering into a settlement under the TOSA traditional owners agree to withdraw any native title claim they may have and to not make a claim in the future.
Under the TOSA, the Victorian government and a Traditional Owner group may enter into an agreement which recognizes traditional owner rights. The agreement comprises several parts, the one part relevant to Crown land leasing being the “Land Use Activity Agreement” (LUAA) which governs negotiation with traditional owners over activities on Crown land.
The LUAA acts as an alternative to the future act regime under the NTA and will come into effect if the Government and the Traditional Owner group choose to make a LUAA under the TOSA.
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There are a number of other leasing provisions contained in the CLRA and LA which in some circumstances may need to be used. The following is a summary of these provisions together with an explanation of the leasing powers contained in the Land (Surf Life Saving Association) Act 1967. As with other Crown land leases, the Leasing Policy for Crown land in Victoria applies to the granting of leases under the following provisions.
1. Crown Land (Reserves) Act 1978
1.1 Section14D–IncorporatedCommitteesofManagement
Under section 14D an incorporated committee of management may “grant leases of any part of the reserved land for the purposes of providing facilities and services for the public”.7 The authority to approve the grant of a lease under this section rests with the Governor in Council and not the Minister.
Because the grant of a lease under this section requires the approval of the Governor in Council rather than the Minister or the Minister’s delegate, the process of granting the lease under this provision is more lengthy and complex than the process made under section 17D.
Accordingly, the use of section 14D has largely been superseded by the use of section 17D.
1.2 Section16–Leasingoflandvestedinamunicipalcouncil
The vesting provisions contained in section 16 enable the Governor in Council, on the recommendation of the Minister by Order published in the Government Gazette, to “...direct that any land reserved under section 4 shall vest in any municipal council on trust for the purposes for which the land has been reserved”.8
Under section 16(2) the Governor in Council may, by the Order vesting the land in a council or by a subsequent Order, empower the council to grant leases or licences for a term not exceeding 21 years. Leases or licences granted under that section must be for the purposes of the reservation and can be subject to such covenants and conditions as the council requires.
The Minister is required to recommend the granting of the lease to the Governor in Council. Therefore, a lease proposal made under this section is scrutinised by DSE. The lease has no force and effect until it is approved by the Governor in Council (section 16(7)).
A Council which has been vested land under section 16 can only lease land in accordance with the powers contained in this section.
7 Section 14D(1) CLRA8 Section 16(1) CLRA
Appendix A –Other Leasing Provisions
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1.3 Section17C–Leasestoformaliseexistingoccupations
The purpose of section 17C was to provide a mechanism to formalise existing occupations on reserved land prior to 1984. Therefore it cannot apply to any new use. Generally, it would only be suitable in cases where the existing lease made under section 17C had expired and a new lease on the same site for the same purpose was being considered. Accordingly, the provision has very limited application.
Section 17C relates to the granting of leases that formalise habitual uses that existed prior to the commencement of the Crown Land (Reserves) (Amendment) Act 1984, and a significant number of committees of management did submit the necessary certification documents to DSE when the provision was inserted into the Act in 1984. Leases under this section may only be granted where the documentation by which the committee of management certified the habitual use is available.
From the perspective of process, the approval of a section 17C lease is very similar to that for a lease issued under section 17D and requires the committee of management to submit an application to the Minister seeking approval of:
• thegrantofthelease;and
• thepurposeforwhichthelandhasbeenhabituallyused(notethedistinctionbetweenthisrequirementandthatinsection17DwheretheMinisterapprovestheproposedpurposeofthelease).
The exceptions that restrict the application of 17D leases over various reserve categories also apply to section 17C unless the granting of the proposed lease is consistent with an approved recommendation of the Victorian Environment Assessment Council (VEAC) and its predecessors. The exception however does not apply to the reservation purpose of public parks, gardens and ornamental plantations unless the approved recommendation of VEAC refers to a coastal, regional or state park. In cases where a habitual use of land reserved for public park or similar purpose has been certified in accordance with the provisions of the Act, the lease process does not include parliamentary scrutiny.
1.4 HorseRacing,AerodromesandMineralSprings
There are a number of other rarely-used leasing and licensing provisions relating to horse racing, aerodromes or landing grounds and mineral springs. In each case the authority to grant the lease or licence rests with the Governor in Council and not the Minister. Therefore, the Minister does not have any role in approving the grant and purpose of the lease.
However, the Minister may recommend the granting of the lease to the Governor in Council. Accordingly, the recommendation process provides DSE with an opportunity to scrutinise proposals as with other tenures made under the CLRA.
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1.4.1 Section 22 – Horse racing
This section authorises the trustees or committee of management of any reserved land used for horse racing (including trotting) or greyhound racing to grant leases or licences ‘...for the purposes of horse racing or greyhound racing or purposes connected therewith (including the stabling and training of race horses and the training of greyhounds).”9
The section stipulates that a lease or licence:–
• besubjecttoconditions,covenants,exceptionsandreservationsasthetrusteesorcommitteeofmanagementdetermine;
• notexceed21years;and
• besubjecttotheapprovaloftheGovernorinCouncil.
Lease rental must be applied to the maintenance and improvement of the reserved land.
1.4.2 Section 23 – Aerodromes
A committee of management in respect of land reserved for an aerodrome or landing ground may grant:
• leasesuptoamaximumtermof21yearsforpurposesincludingtheprovisionoffacilitiesandservicesfortheoperationfuellingandmaintenanceofaircraft,forthecomfortandconvenienceofpersonswhopatronisetheaerodromeandforflyingclubsandflyingschools(GovernorinCouncilapprovalisrequiredunderthisprovision);and
• agreementstooperateservicesandfacilitiesforandconsistentwithpurposesofthereservationforaperiodnotexceedingtenyears.
1.4.3 Section 29A – Mineral Springs
A committee of management of a mineral springs reserve, or the Governor in Council where there is no committee of management, may grant leases for:
• thecollection,preparationandsaleofmineralwater;or
• theoperationofmineralbaths,spatherapycentres,kiosksorotheramenities
up to a term of 21 years, or in the case where a certificate has been obtained from the Minister under sub-section 4 of section 29A, for a period not exceeding 99 years.
The terms and conditions of a lease made under this section, if granted by a committee of management, are subject to approval of the Governor in Council on the recommendation of the Minister.
The granting of a lease under the above provisions is more lengthy and complex than under Section 17D which authorises the granting of leases for any purpose and usually under delegation.
9 Section 22(1) CLRA
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Section 17D leases have largely superseded these provisions however in some circumstances these provisions must be used. For example, where a council has been vested land under Section 16 of the CLRA, it can only lease land in accordance with the powers contained in that section. Further, in circumstances where trustees or a committee of management manage land reserved for horse or greyhound racing and the trustees/committee wish to issue a lease or licence for these purposes, then the lease or licence should be issued under section 22 rather than 17D CLRA.
2. Land Act 1958
2.1 Strataleases
The general leasing provisions contained in section 134 authorise the granting of leases in stratum.
A stratum of Crown land is a three dimensional space (i.e. with length, width and depth) of any shape on, above or below (or any combination of these) the surface of Crown land. Power to grant leases over a stratum of Crown land enables formalisation of an occupation of a three dimensional space for such things as:–
• overhead/undergroundpedestrianwalkways;
• vehicletunnels;
• buildingoverhangs;and
• overhead/undergroundpipelines.
Development in a stratum generates unique circumstances as, for example, the need to guarantee support and preserve access by both the tenant and the public. These requirements are addressed in the legislation.
Although a lease over a stratum of Crown land is granted under the general leasing provisions contained in section 134, specific authority to do so, together with details of particular requirements and conditions that must be met, are contained in section 134A.
A lease over a stratum of Crown land cannot be granted unless:–
• thelocalmunicipalcouncilandanyotherresponsibleauthorityunderthePlanning and Environment Act 1987hasbeenconsulted;and
• theMinisterissatisfiedthat:–
– thetenantcanobtainreasonableaccessanduseoftheleasedland;
– theleasedoesnotinterferewiththerightsoftheowner,tenantorlicensee ofotherland;
– necessaryrightsofsupportforthestratumandanystructureareavailable;
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– provisionhasbeenmadefornecessaryservicestoorthroughthestratumfortheuseofthestratumandotherland;and
– theleasewillnotinterferewiththeuseofroadsbythepublic.(Section134A(5)permitsthegrantingofaleaseforastratumofCrownlandeventhoughthelandisaroad.)
In determining whether the requirements for access and support have been met the Minister may consider whether the proposed tenant is the owner, tenant or occupier of land required for access or support, whether the tenant has sufficient rights over adjoining land to provide access or support and the extent to which these rights can be enjoyed by the tenant’s successors in title.
3. Land (Surf Life Saving Association) Act 1967The Land (Surf Life Saving Association) Act 1967 (LSLSA) is a stand-alone Act which came into operation on 15 March 1967. It authorises the Governor in Council to grant leases to “The Surf Life Saving Association of Australia Victorian State Centre” (now represented by Life Saving Victoria) as a means of providing security of tenure for surf life saving club buildings established on any “ocean foreshore reserve”.
For the purposes of the LSLSA an “ocean foreshore reserve” is defined as “Crown land abutting on or adjacent to the coastline of Victoria (not being any part of the coastline which is within Port Phillip Bay) which has been reserved either temporally or permanently for any purpose under section 4 of the Crown Land (Reserves) Act 1978”.
If a Club intends to obtain a lease under the LSLSA, it will need to obtain an agreement from Life Saving Victoria who can act on its behalf. Leases can only be granted direct to Life Saving Victoria which can then enter into agreements with affiliated clubs.
A lease under the Act cannot be granted over an area in excess of 2023 square metres. The Act also specifically provides that such a lease must be for:
“...the purposes of surf club activities .... and the provision of residential quarters for patrol members of surf clubs affiliated with the association;”.10
Leases for other purposes, particularly commercial uses, cannot be granted under the LSLSA. However, it may be appropriate for such a lease to be considered under Section 17D of the Crown Land Reserves Act.
The LSLSA also provides that a lease:
• shallbeatanannualrentalof$10;
• cannotexceed21years;
• mustprovideforthepaymentofannualamountstoanycommitteeofmanagementofthereserveinwhichthereservedlandislocated;and
• mustcontain“...suchothercovenantsandconditionsastheGovernorin Council thinks fit.”
10 Section 3(2) LSLA
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Act Section Subject Summary of Provisions
Crown Land (Reserves) Act 1978
Section 14D Leasing by incorporated committees
Provides that an incorporated committee of management may, with the consent of the Governor in Council, grant leases for the purposes of providing services and facilities for a specific term not exceeding 21 years. Approval to the terms and conditions is by the Minister.
Section 17C Leases to formalise existing occupations
Provides that trustees or committees of management, or where there are no trustees or committee of management the Minister, may grant leases for a term of up to 21 years to formalise occupations of Crown land prior to the commencement of the Crown Land (Reserves) (Amendment) Act 1984.
Section 17CA
Leasing for between 21 and 65 years.
Enables the Minister to grant a lease over land managed by trustees or a committee of management, or where there are no trustees or committees of management, for a term of more than 21 years but not more than 65 years.
The powers under this section are not delegated.
Section 17D (1B)
Agreement to Lease.
Provides that trustees or committees of management with the approval in writing of the Minister may enter into an Agreement to Lease for a lease to be issued under Section 17D(1) or (1A). (The Minister alone may also enter into an Agreement to Lease).
1
11 Please note that this is a summary of the above legislation and is not intended to represent the full content of each section.
Appendix B – Summary of Leasing Provisions11
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Act Section Subject Summary of Provisions
Section 17D(1) & (1A)
Leasing for up to 21 years.
Provides that trustees or committees of management, or where there are no trustees or committees of management the Minister, may issue a lease over all classes of Crown land reserved under section 4 of the CLRA for any purpose (whether consistent with the reserve purpose or not) for a term of up to 21 years (subject to meeting certain criteria).
The powers under this section are currently delegated.
Section 17DA
Parliamentary scrutiny of certain proposals.
Specifies certain categories of reserved Crown land where there are additional requirements attached to the granting of a lease under section 17D (1) or (1A).
Section 17D(4)
Covenants and conditions on leases.
Applies to leases granted under section 17D and 17C and specifies that a lease shall be subject to such covenants, exceptions, reservation and conditions as determined by the trustees or committee of management and approved by the Minister.
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Act Section Subject Summary of Provisions
Section 16 Leases of land vested in municipal councils.
Enables the Governor in Council, on the recommendation of the Minister by Order published in the Government Gazette, to “...direct that any land reserved under section 4 shall vest in any municipal council on trust for the purposes for which the land has been reserved.”
Under section 16(2) the Governor in Council can, by the Order vesting the land in a council or by a subsequent Order, empower the council to grant leases or licences for a term not exceeding 21 years.
Leases or licences granted under that section must be for the purposes of the reservation and can be subject to such covenants and conditions as the council thinks fit. A lease granted under this section must be approved by the Governor in Council.
Section 22 Leases of land used for horse racing and greyhound racing.
Trustees or committees of management may grant leases or licences for land reserved for horse racing (including trotting) or greyhound racing up to a maximum term of 21 years.
A lease or licence granted under this section must be approved by the Governor in Council.
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Act Section Subject Summary of Provisions
Section 23 Leases of land reserved for aerodrome purposes.
A committee of management in respect of land reserved for an aerodrome or landing ground may grant:
• leases up to a maximum term of 21 years for purposes including the provision of facilities and services for the operation fuelling and maintenance of aircraft, for the comfort and convenience of persons who patronise the aerodrome and for flying clubs and flying schools; and
• agreements to operate services and facilities for and consistent with the purposes of the reservation for a period not exceeding ten years.
A lease granted under this section must be approved by the Governor in Council
Section 29A Leasing of mineral springs reserves.
A committee of management of a mineral springs reserve, or where there is no committee of management, the Governor in Council may grant leases for:
• the collection, preparation and sale of mineral water; or
• the operation of mineral baths, spa therapy centres, kiosks or other amenities
up to a term of 21 years or in the case where a certificate has been obtained from the Minister under sub-section 4 of section 29A for a period not exceeding 99 years.
The terms and conditions of a lease made under this section, if granted by a committee of management, are subject to approval of the Governor in Council on the recommendation of the Minister.
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Act Section Subject Summary of Provisions
Land Act 1958
Section 134 (1)
Leasing of Crown land for non-agricultural purposes.
The Minister may grant leases of unreserved Crown land for any purpose (except for the purposes of agriculture) at the rent and subject to the conditions, covenants, reservations, restrictions and exceptions which he thinks fit.
A lease under section 134 may provide for –
• the payment of the whole or any part of the rental in advance and the refund of the whole or part of the rental in the event of forfeiture (Section 137AAA); and
• a review of rental not more than once during each 12 month period of the lease (section 137AB).
Section 134A Leasing of strata of Crown land
Enables the Minister to grant a lease under section 134 in stratum.
Section 134(1A)
Agreement to Lease.
Provides that the Minister may enter into an Agreement to Lease for Crown land for a lease granted under section 134.
Section 135 Public auction/tender of private negotiation.
The Minister may lease land by offering the right to lease by public auction or public tender or by private negotiation.
Section 137 Advertisement of privately negotiated leases.
Where the Minister leases Crown land by private negotiation, the proposed tenant shall, not less than fourteen days before the day on which the lease is to be granted, publish in the Government Gazette and in a newspaper circulating in the district in which the land is situated, a notice specifying –
a. the particulars of the land which is to be leased;
b. the purpose and term of the proposed lease; and
c. the name of the proposed tenant.
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Act Section Subject Summary of Provisions
Section 137AA (1)
Leases up to 21 years.
Subject to section 137AA, the term of a lease granted under subdivision 134 shall not exceed 21 years.
The powers relating to the approval of terms and conditions of a lease up to 21 years are currently delegated.
Section 137AA (2)
Leases over 21 years and up to 50 years.
The term of a lease granted for commercial or industrial purposes may exceed 21 years but shall not exceed 50 years.
The powers relating to the approval of terms and conditions of a lease up to 50 years are currently delegated.
Section 137AA (3)
Leases over 50 years and up to 99 years.
The Minister may grant a lease of land for commercial or industrial purposes under this subdivision for a term of more than 50 years but not more than 99 years if the Minister is satisfied that –
a. a building or structure erected or to be erected on the land; or
b. an improvement made or to be made on or to the land;
– is of a substantial nature and of a value which justifies a lease term exceeding 50 years.
The powers relating to the approval of terms and conditions of leases for terms of over 50 years are not delegated.
Section 137AA (4)
Leases of substantial Crown improvements.
The Minister may grant a lease on any Crown land of any existing improvement which is of a substantial nature and is the property of the Crown for a term not exceeding 99 years.
The powers relating to the approval of terms and conditions of leases for terms of over 50 years are not delegated.
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Act Section Subject Summary of Provisions
Forests Act 1958
Section 51 Leasing of land in reserved forest.
A lease under section 51 granted by the Minister “…is subject to the covenants, terms and conditions that are determined by the Minister and the payment of royalties as determined by the Minister”.
Leases made under this section are granted by the Minister alone – Committees of management and trustees are not able to grant leases.
Section 51 (1)
Leasing of land in reserved forest for up to 21 years.
The Minister may lease reserved forest for a term of up to 21 years, for any purpose that the Secretary of DSE recommends.
Leases issued are generally for purposes such as tourism and telecommunications.
The power to approve leases is currently delegated.
Section 51 (2)
Leasing of land in reserved forest between 22 and 65 years.
The Minister may lease reserved forest for a term of more than 21 years, but not more than 65 years, if the Minister is satisfied that –
a. the proposed use, development, improvements or works that are specified in the lease are of a substantial nature and of a value which justifies a longer term of lease; and
b. the granting of a longer term lease is in the public interest.
The powers relating to the approval of leases are not delegated.
Section 51 (4)
Agreement to Lease.
Provides that the Minister may enter into an Agreement to Lease for a lease granted under section 51.
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Published by the Victorian Government Department of Sustainability and Environment
Melbourne, May 2012.
© The State of Victoria Department of Sustainability and Environment 2012
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ISBN 978-1-74287-522-4 (online)
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