Do you have clients operating under a Trustee Lease?

Recent changes to the Land Act 1994 (Qld) may see a significant reduction in the time frame for the granting and registration of trustee leases.

Background

On  14  May  2013,  the  Land,  Water  and  Other  Legislation  Amendment  Act  2013  (Qld)  (Amendment  Act) commenced, amending a large number of Queensland Acts, including the Land Act 1994 (Land Act).

The  Amendment  Act,  among  other  important  changes,  limits  the  involvement  of  the  Department  of  Natural Resources and Mines (DNRM) in approving certain types of land dealings.

These changes are a continuation of the Queensland Government’s stated commitment to cutting red tape and regulation across the natural resources sector.

The changes to the Land Act operate to limit the involvement of the DNRM in approving certain land dealings, including:

  • Trustee Leases;
  • Subleases;
  • Public Utility Easements; and
  • Cancelling Permits to Occupy Land

This article focuses specifically on the practical changes relating to Trustee Leases and the circumstances where Minister’s consent is no longer required.

Trustee Leases

State land may be allocated to a party for the purposes of managing the land as Trustee, by way of a Deed of Grant in Trust (DOGIT) from the State Government.

Where a Lease is granted to a party over trust land, this Lease will be a Trustee Lease for the purposes of the Land Act.

All Trustee Leases must be subject to the Mandatory Standard Terms for Trustee Leases published by the DNRM, and must be consistent with the purpose of the DOGIT.

Once a Trustee Lease is signed, it is not valid and enforceable until it is registered on the Title of the trust land. Previously, Trustee Leases could not be registered on title without the Trustee first obtaining the consent of the Minister, except in circumstances where the Minister dispensed with that requirement.

This required Trustees to submit each proposed Trustee Lease to the DNRM for consent and approval, significantly adding to the timeframe for granting a Trustee Lease.

The Amendment Act amends section 57 of the Land Act to allow certain types of Trustees to grant Trustee Leases without any requirement for Ministerial approval.

This amendment came into effect on 1 July 2013.

When is Ministerial Approval not required?

Trustee Leases still require Ministerial consent pursuant to section 57(1) of the Land Act. However, Trustees may now grant a:

  • Trustee Lease (construction); or a
  • Trustee Lease (State or statutory body)

without Ministerial approval in accordance with section 57(3) of the Land Act.

Construction or ‘State or statutory body’

A trustee lease (construction) is a lease of trust land to the State for the construction of transport infrastructure and the provision of transport services on trust land.

The more common application of this section will be for trustee leases (State or statutory body). A trustee lease (State or statutory body) is a lease of trust land where:

  • The Trustee is the State or a statutory body;
  • A Mandatory standard terms document forms part of the lease;
  • The purpose of the lease is consistent with the DOGIT (explained above); and
  • If a land management plan for the trust land is registered under section 48, then the lease is consistent with the management plan.

It is extremely common for State or statutory bodies, in particular local governments, to be appointed as Trustees of State Land in accordance with the Land Act.

As a result of this Trusteeship by Local Government, Trustee Leases are commonly granted to local community organizations and sporting clubs who provide substantial benefit to local communities.

How does this help?

The effect of the amended section suggests that the above Trustee parties will not be required to participate in the Ministerial consent process.

This process can take several weeks, which results in a substantial time saving for Trustees and Trustee Lessee’s alike.

The purpose of the amended section is to facilitate the granting of trustee leases using the Mandatory Standard Terms documents only, and to remove the delays which arise when seeking Ministerial approval.

The State or statutory body Trustees remain obliged to comply with the rules surrounding the granting of Trustee Leases, however the previously strict Ministerial oversight has now been removed.

Wait… will a Land Management Plan be necessary?

One practical matter which remains to be determined is the issue of whether a Land Management Plan is specifically required for ‘trustee leases (State or statutory body).’

The definition of ‘trustee lease (State or statutory body)’ provides that if a Land Management Plan is registered, then the trustee lease must be consistent with it.

Section 48 of the Land Act, provides that if the Minister asks, the Trustee of trust land must apply for the approval of a management plan for the trust land. An approved management plan may then be registered on the title for the trust land.

The Land Act therefore indicates that management plans for trust land are not always necessary. Indeed it is possible to administer trust land in accordance with the Land Act without an approved management plan.

It remains to be seen however, whether a land management plan must be registered on title in order for a trustee lease to fall within the definition of ‘trustee lease (State or statutory body)’.

From the drafting of the definition it appears that this is not intended to be a strict requirement.

This matter is currently with the policy department of the DNRM for interpretation. As a result, it remains to be seen whether the DNRM will require a registered land management plan for trustee leases granted without Ministerial consent in accordance with section 57(3) of the Land Act.