Crown Land Leasing Guidelines - Department of Environment, Land

Crown Land
Leasing
Guidelines
Leasing Policy
for
Crown
Land in Victoria 2010
Leasing
Legislation
ii
Contents
1.Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Crown land leasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.Legislation governing Crown land leasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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
ii
1.Introduction
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:
• Crown Land (Reserves) Act 1978;
• Forests Act 1958; and
• Land Act 1958.
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.
Photo courtesy of Bellarine Bayside Foreshore Committee of Management
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1.1
Crown land leasing
About 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.Legislation governing
Crown land leasing
2.1Background
The following sections cover the main statutory requirements to grant a lease under the:
• Crown Land (Reserves) Act 1978 (CLRA),
• Land Act 1958 (LA); and
• Forests Act 1958 (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
• Traditional Owner Settlement Act 2010.
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.
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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:–
• the trustees or committee of management (appointed under sections 12 and 14
of the CLRA respectively); or
• the Minister if there are no trustees or committee of management1.
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:–
• the grant of the lease (pursuant to section 17D(1)); and
• the purpose of the lease (pursuant to sections 17D(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
Section 17DA Parliamentary scrutiny of certain proposals
Some categories of reserved Crown land may only be leased under section 17D
if additional requirements are satisfied (refer section 17D(2)). These reservation
purposes are shown in Figure 1.
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:
• that there are special reasons which make granting of the lease reasonable and
appropriate in the particular circumstances; and
• the grant of a lease will not be substantially detrimental to the use and
enjoyment of any adjacent land reserved under the CLRA.
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:
• laid before both Houses of Parliament before the sixth sitting day after
publication; and
• posted or delivered to each member of Parliament who has requested a copy.
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
Section 17CA – Leases for up to 65 years for other purposes
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:–
• the purpose for which the lease is to be granted is not detrimental to the
purpose for which the land is reserved; and
• 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; and
• the granting of a longer term lease is in the public interest.
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:
• public parks, gardens and ornamental plantations; or
• the protection of the coastline (or deemed to be reserved for the protection of
the coastline).
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:
• make a determination of the Minister’s intention to grant a lease
• publish that determination in the Victoria Government Gazette
• arrange to have the determination laid before each House of Parliament.
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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):
• does not extend to empowering the trustees or committee of management to
vary, amend or terminate the lease;
• may extend to empowering the trustees or committee of management to collect
any tolls, fees, rents, royalties or other charges that may be imposed in respect
to 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 Minister approves lease terms and conditions
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 Is the purpose of a lease detrimental to the purpose of the reserve?
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 caseby-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) CLRA
4 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:
• Is it necessary to lease reserved Crown land for the proposed use under the lease?
Can the proposed use be accommodated on freehold land? If not, why not?
• Is there a demonstrable public and economic benefit?
• Will the proposed use result in the loss of open space used by the general public?
If so, to what extent?
• Can the loss of free and unrestricted use and access by the public of the proposed
lease area be justified in the context of the area of the whole reserve?
• Is it proposed that new buildings will be constructed which may impact on
adjoining reserved Crown land?
• Would natural values be affected, for example, is the removal of
vegetation necessary?
• Is the use/development subject to a management plan approved by DSE?
• Does the proposal have community support and how has that support
been gauged?
• What type(s) of community consultation has been undertaken?
• Is the proposal consistent with other government policy objectives or legislation?
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
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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
2.2.6 Other Crown Land (Reserves) Act 1978 leasing provisions
The CLRA contains a number of other leasing provisions. These include:
• Section 16(2) – leases for land vested in municipal councils
• Section 22(1) – leases for land used for horse racing and greyhound racing
• Section 23(1) – leases for land reserved for aerodrome purposes
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 Section 134
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:
• up to 50 years maximum for commercial or industrial purposes;
• up to 99 years maximum for commercial or industrial purposes if the Minister is
satisfied that improvements are or will be of a substantial nature and value; and
• up to 99 years maximum where substantial existing improvements which are the
property of the Crown are involved.
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 Section 134 – Terms and conditions
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:
• 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).
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 Section 51
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:
• 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
• the granting of a longer lease term is in the public interest.
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 Terms and conditions
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 Lease
The CLRA, LA and FA provide for the making of “Agreements to Lease”.
Specifically:
• section 17D(1B) of the CLRA 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 granted under section 17D(1). The Minister
alone may also enter into an Agreement to Lease for leases of up to 21 years
• section 17CA(6) of the CLRA provides that the Minister may enter into an
Agreement to Lease with respect to land leased under section 17CA. This applies
to leases of up to 65 years.
• section 51(4) of the FA provides that the Minister may enter into an
Agreement to Lease.
• section 134(1A) of the LA provides that the Minister may enter into an
Agreement 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 leases
In 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
Planning and Environment Act 1987 (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 Coastal Management Act 1995 (Vic)
The Coastal Management Act 1995 (CMA) applies to all coastal land in Victoria. The CMA
defines coastal Crown land as:
• any land reserved under the CLRA for the protection of the coastline;
• any Crown land within 200 metres of the high water mark of the coastal
waters of Victoria;
• any sea within the limits of Victoria;
• the seabed of the coastal waters of Victoria; and
• the seabed of any sea within the limits of Victoria.
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:
• the environmental, social and economic implications of the proposal;
• the values of coastal resources; and
• the impacts of any proposed development on coastal values.
As with a permit under the P&E, a permit under the CMA must be obtained before the
lease will be issued.
15
2.6.3 Retail Leases Act 2003 (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:
• the term of the lease is 15 years or longer;
• there are no options for additional terms within the first 15 year term; and
• the lease imposes obligations on the tenant or any other person to carry out
substantial work on the premises or prevents the tenant from removing the
leased improvements.
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.
16
2.6.4 Native Title Act 1993 (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:
• access the area for traditional purposes, such as camping or to carry
out ceremonies;
• visit and protect important places and sites;
• hunt, fish and gather food or traditional resources like water, wood or ochre; and
• teach law and custom on country.
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 Traditional Owner Settlement Act 2010 (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.
17
Appendix A –
Other Leasing Provisions
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
Section 14D – Incorporated Committees of Management
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
Section 16 – Leasing of land vested in a municipal council
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) CLRA
8 Section 16(1) CLRA
18
1.3
Section 17C – Leases to formalise existing occupations
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:
• the grant of the lease; and
• the purpose for which the land has been habitually used (note the distinction
between this requirement and that in section 17D where the Minister approves
the proposed purpose of the lease).
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 Horse Racing, Aerodromes and Mineral Springs
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.
19
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:–
• be subject to conditions, covenants, exceptions and reservations as the trustees
or committee of management determine;
• not exceed 21 years; and
• be subject to the approval of the Governor in Council.
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:
• 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 (Governor in Council approval is required under
this provision); and
• agreements to operate services and facilities for and consistent with purposes of
the reservation for a period not exceeding ten years.
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:
• 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.
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
20
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
Strata leases
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/underground pedestrian walkways;
• vehicle tunnels;
• building overhangs; and
• overhead/underground pipelines.
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:–
• the local municipal council and any other responsible authority under the Planning
and Environment Act 1987 has been consulted; and
• the Minister is satisfied that:–
–– the tenant can obtain reasonable access and use of the leased land;
–– the lease does not interfere with the rights of the owner, tenant or licensee
of other land;
–– necessary rights of support for the stratum and any structure are available;
21
–– provision has been made for necessary services to or through the stratum for the
use of the stratum and other land; and
–– the lease will not interfere with the use of roads by the public. (Section 134A (5)
permits the granting of a lease for a stratum of Crown land even though the land
is a road.)
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 1967
The 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:
• shall be at an annual rental of $10;
• cannot exceed 21 years;
• must provide for the payment of annual amounts to any committee of
management of the reserve in which the reserved land is located; and
• must contain “...such other covenants and conditions as the Governor in
Council thinks fit.”
10 Section 3(2) LSLA
22
Appendix B –
Summary of Leasing Provisions11
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.
23
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.
24
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.
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.
25
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.
26
Act
Section
Subject
Summary of Provisions
Land Act
1958
Section 134
(1)
Leasing of
Crown land
for nonagricultural
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 Enables the Minister to grant a lease
of Crown land
under section 134 in stratum.
Section
Agreement
Provides that the Minister may enter into
134(1A)
to Lease.
an Agreement to Lease for Crown land
for a lease granted under section 134.
Section 135 Public auction/
The Minister may lease land by offering
tender of
the right to lease by public auction or
private
public tender or by private negotiation.
negotiation.
Section 137 Advertisement
Where the Minister leases Crown land
of privately
by private negotiation, the proposed
negotiated
tenant shall, not less than fourteen days
leases.
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.
27
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.
Section
137AA (2)
Section
137AA (3)
Leases over 21
years and up to
50 years.
Leases over 50
years and up to
99 years.
The powers relating to the approval of
terms and conditions of a lease up to 21
years are currently delegated.
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.
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.
Section
137AA (4)
Leases of
substantial
Crown
improvements.
The powers relating to the approval of
terms and conditions of leases for terms
of over 50 years are not delegated.
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.
28
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”.
Section 51
(1)
Leasing of land
in reserved
forest for up
to 21 years.
Leases made under this section are
granted by the Minister alone –
Committees of management and
trustees are not able to grant leases.
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.
Section 51
(2)
The power to approve leases
is currently delegated.
Leasing of land The Minister may lease reserved forest
in reserved
for a term of more than 21 years, but
forest between not more than 65 years, if the Minister
22 and 65 years. 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.
Section 51
(4)
Agreement
to Lease.
The powers relating to the approval of
leases are not delegated.
Provides that the Minister may enter
into an Agreement to Lease for a lease
granted under section 51.
29
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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