Leases, Licences & Other Estates

Public land is one of councils’ greatest assets. The Local Government Act 1993 (Act) sets out the Council’s Charter and directs a council to bear in mind that it is the custodian and trustee of public assets and to effectively account for and manage the assets for which it is responsible.

All public land must be classified by a council as either ‘community’ or ‘operational’ land. Operational land should ordinarily comprise land that is held as a temporary asset or as an investment, land which facilitates the council in carrying out its functions or land which is not open to the public, such as a works depot or water plant.

Classification as community land reflects the importance of the land to the community because of its use or special features. Generally, it is land intended for public access and use, or where other restrictions applying to the land create some obligation to maintain public access.

Plans of management must be prepared for all community land. They are not only required under the Act but are an essential management tool. Plans of management:

  • are written by council in consultation with the community
  • identify the important features of the land
  • clarify how council will manage the land, and in particular
  • indicate how the land may be used or developed, e.g. leasing.

The Act contains important restrictions on the ability of a council to grant leases, licences and other estates over community land. This is coupled with requirements for public consultation to ensure that community views are considered. The Act also outlines when a council must tender a proposed lease or licence and the tender process (s.46A and s.55).

Lease – grants a legal exclusive possession of premises for a specified period in return for the payment of rent.

Licence – grants a contractual right to occupy premises in return for the payment of a licence fee.

Estate – the term ‘estate’ is wide and includes many rights over land that can be granted. The legal meaning is found in the Interpretation Act 1987 and includes an ‘interest, right, title, claim, demand, lien and encumbrance whether at equity or law’. A common example in local government is the grant of easements.

Councils must ensure that any estate is authorised under the Act. An estate must:

  • be expressly authorised in a plan of management, and
  • be consistent with the core objectives for the land, and
  • only be granted with the consent of the Minister if the term of the estate exceeds 21 years.

Without reference to a plan of management, the Act allows a council to grant a lease, licence or other estate in respect of community land for:

  • the provision of public utilities (s46(1)(a); or
  • the purpose of providing pipes, conduits or other connections underground for the connection of premises adjoining the community land to a facility of the council or other public utility provider (s46(1)(a1).

A council may otherwise grant a lease, licence or other estate in accordance with an express authorisation in the plan of management applying to the land. The lease, licence or other estate must be for one of the purposes listed in section 46(1)(b) of the Act and the proposed purpose must be consistent with the core categorisation of the land.

A council must obtain the consent of the Minister for Local Government to grant a lease, licence or other estate over community land where:

  • the proposed term (including any renewal options and holdover periods) exceeds 21 years,
  • the proposed term (including any options and holdover periods) exceeds 5 years, and a person makes a submission by way of an objection to the proposal during the submission period.
  • the proposed term (including any renewal options and holdover periods) is 5 years or less and the Minister provides council with a written request that the proposal is to be referred to the Minister, who will determine whether the provisions of section 47(5)-(9) are to apply to the proposal.
  • a lease or licence cannot be granted over community land for a term (including any renewal options and holdover period exceeding 30 years.

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