Legislative Assembly for the ACT: 2010 Week 7 Hansard (1 July) . . Page.. 3043..
MR BARR (continuing):
The practice of issuing leases for less than market value and restricting their transfer through lease conditions or specific legislation has existed for many years. Since 1992 it has been unlawful to transfer any lease granted for less than market value without the required government consent. This provision applied retrospectively in the sense that it applied to existing leases at the time as well as to new leases. The blanket provision had the effect of applying the restriction to leases granted from the 1930s onward, even when these restrictions were not intended at the time the relevant leases were granted.
A concessional lease cannot be sold without the permission of ACTPLA. Permission to sell is only granted if the purchaser would be eligible to be granted the same concessional lease. The concessional lease status cannot be removed, except through a development application assessed in the high-end impact assessment track and with the consent of the Minister for Planning. Given these restrictions, it is important for a prospective purchaser to know whether the intended purchase is a concessional lease in order to know whether it is available for purchase and potentially for subsequent sale.
The concessional status of a lease goes to the heart of its transferability and therefore its market value. Regrettably, in past years, particularly before 2000, leases were often granted without an explicit statement as to their status as a concessional or not concessional lease. As a result, buyers of land and others were at times required to spend significant time assessing the status of a lease by looking at the original grant of lease and subsequent transactions.
In 2004, the government considered a review of concessional lease policy by KLA Australia consultants. Their report included a number of recommendations on the granting and administration of concessional leases. The report also considered the issue of the identification of concessional leases. As a result of this report, the government agreed to a new statutory process for the identification of concessional leases.
The new process was implemented administratively and then mandated in the Planning and Development Act on 31 March 2008. The new process permits a lessee to apply to ACTPLA for a declaration as to whether their lease is concessional. If the lease is declared to be concessional, then a notation to this effect is included in the register of land titles.
The government has been in discussions with the Law Society and the Property Council about the identification of concessional leases. These stakeholders indicated there have been difficulties in applying for a declaration as to concessional status. There are difficulties for those who do not have the time or resources to make an application. There are difficulties for those who lack the knowledge to know when an application for a declaration might be advisable.
The government has listened to these concerns and the government agrees with the Law Society that there is a need for legislation to allow the ready identification of the concessional status of leases. This is vital, not just for individual sellers and buyers but also for the long-term reliability and integrity of the register of land titles and the property system as a whole. This bill addresses this need.