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In Queensland, leases over state land are granted for various purposes such as grazing, agriculture, tourism, forestry and others as term, perpetual or freeholding leases.
In return, the lessee pays annual rent charged, in most cases, as a percentage of the land’s value.
When a “landowner” (the lessee) wishes to transfer the land to another person by, for instance, a sale or a gift, approval from the relevant government department’s minister is generally required under the Land Act 1994. This has meant that an application must be made to the Department of Natural Resources, Mines and Energy for an approval of the transfer.
However, the process has recently been simplified and, since 2 December 2019, certain categories of lease are exempt from requiring this approval.
We’ll provide some more detail below but if you are seeking the transfer of a lease or licence of Crown land and are unsure of the requirements to do so, contact South Geldard Lawyers in Rockhampton today.
When is a lease transfer exempt from ministerial approval?
Rent on state leases is determined according to different rent categories based on the use of the land and its unimproved value. A lease on which a primary production enterprise operates is classified as rental arrangement Category 11. Category 11 leases are leases predominantly for the purposes of aquaculture, viticulture and agriculture. Agriculture includes growing cane, coffee, tea, tobacco, fruit, vegetables, flowers and other horticultural crops, as well as the farming of cattle, pigs and poultry.
Within category 11 are two subcategories, including one for those who hold perpetual leases of Crown land (such as a Grazing Homestead Perpetual Lease), and another for those who hold term leases, licences and permits to occupy. The subcategories are used to determine annual rents as a percentage of unimproved land value under the Land Regulation 2009.
Leases which are not exempt, include leases where:
- the lease is issued for a significant development and requires a financial and managerial capability assessment; or
- the lease is subject to:
- a performance guarantee bond;
- a deed of indemnity;
- a mortgagee in possession; or
- sale by a mortgagee exercising a power of sale or with a receiver/manager appointed.
The transfer process if the lease is exempt
If your agricultural lease meets the criteria and is exempt from ministerial approval, transfer forms can be lodged directly with the Titles Registry in the same manner as you would for a transfer of freehold land.
However, a leaseholder should first ensure any outstanding rent, including deferred rent or penalty interest owing to the Queensland Government, has been paid before lodgment of these forms.
Any outstanding liabilities, such as rent or interest, become the responsibility of the incoming leaseholder once the lease is transferred.
For that reason, it is important that the parties obtain a rental clearance report by contacting the Department. These are steps that your lawyer will undertake for you when they prepare the transaction documents.
If, due to drought or other reasons, the lessee has been granted hardship concessions and/or deferral of rent, these concessions are not passed on automatically when a lease is transferred. An incoming leaseholder must demonstrate hardship in its own right and apply separately for any concessions.
Let the experts help you
At South Geldard Lawyers, our property lawyers and clerks have a strong track record helping clients in all matters relating to the transfer of land. We can help clarify whether your lease is exempt from ministerial approval and will help to streamline the process for you. We take the stress and worry out of a lease transfer by doing all that needs to be done on your behalf so you can get on with your business.
If anything raised in this article applies to your situation, call us today on (07) 4936 9100.
It is important to seek specific advice regarding your circumstances as this fact sheet provides general information only and does not constitute legal advice.
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