Security of tenure
All new and renewed leases are issued for set terms. Leasehold land is subject to Commonwealth native title provisions, which may limit renewal for a term longer than the original lease grant unless native title is resolved. Since 1986, the maximum renewal term has been 30 years.
Nevertheless, under the State Rural Leasehold Land Strategy, longer terms are achievable where land is managed and maintained in good condition:
- 30-years—the standard lease term
- 40-years—where the land is assessed as being in good condition
- 50-years—where the land is assessed as in good condition, and the leaseholder has entered into an Indigenous access and use agreement (IAUA) or Indigenous land use agreement (ILUA) and a conservation agreement or covenant (where the Minister responsible for administering the Land Act 1994 considers these appropriate).
Once a lease has been renewed under the State Rural Leasehold Land Strategy framework, leaseholders will also have an opportunity to apply to extend the term of the lease if they satisfy the provisions outlined in the agreement.
In addition to the opportunities for lease term extension provided for under the agreement, certain leases over rural leasehold land in the Cape York region may be extended to a term of up to 75 years if the Minister is satisfied that the lease land is in good condition; and that the lessee has complied with the land management agreement and any requirements under it for the granting of the extension; and:
- the lessee has complied with any conservation agreement or conservation covenant applying to all or part of the lease land; and
- the lessee has complied with the Indigenous land use agreement relating to the lease land; and
- the extension is appropriate, taking into account any or all of the following—
- the terms of any conservation agreement or conservation covenant
- the terms of the indigenous land use agreement
- the size of the declared land.
Renewing a term lease
The holder of a term lease may apply for a new lease unless prohibited from doing so by a condition of the original lease or a provision of the Land Act 1994.
About two years before its date of expiry, the holder of an existing lease will be contacted by the department and invited to apply for renewal. It is expected that a lease renewal will take from one to two years to finalise.
In accordance with statutory requirements, a decision about lease renewal must include consideration of whether a lease for the purpose of grazing or agriculture is the most appropriate long-term land tenure, taking into account:
- the condition of the lease land—including whether or not it is degraded, or at risk of, becoming degraded
- whether part of the lease should be set aside as State forest or for conservation purposes
- the public interest—including whether part or all of the land is required for a public purpose
- the interests of the leaseholder, and their record of compliance with the lease conditions.
Under the State Rural Leasehold Land Strategy, where a new or renewed lease is offered for rural leasehold land for a term of 20 years or more over an area of 100 hectares or more, it will be subject to a condition that the leaseholder must enter into a land management agreement.
Early renewal
An early application for renewal may be made:
- after 80 per cent of the current term has expired; or
- when, in the Minister’s opinion, special circumstances exist.
Leaseholders applying successfully for early renewal will forego the term remaining on an existing lease.
Extending the term of a lease
A leaseholder can apply for a lease extension if there is a land management agreement and:
- more than 5 years have passed since the agreement was first registered (unless special circumstances exist)
- no more than 80% of the existing term of the lease has expired.
An extension of up to 10 years (resulting in a term of no more than 40 years) is available where either the land is assessed as being in good condition.
A further extension of up to 10 years (resulting in a maximum term of 50 years) is available where land is in good condition and the leaseholder has entered into an Indigenous access and use agreement and/or a conservation agreement or covenant, where the Minister considers these appropriate.
For example—a leaseholder granted a 30-year term lease can receive both lease extensions (to a maximum of a further 20 years) if all the extension requirements are met. Similarly, a leaseholder granted a 40-year term lease can receive one lease extension of up to 10 years if an Indigenous access and use agreement and a conservation agreement (if required) have been entered into.
Converting a term lease to a perpetual leases
Perpetual leases provide a level of security comparable to that of freehold because they do not expire. Under the State Rural Leasehold Land Strategy, this tenure is still available where it can be demonstrated that:
- native title has been resolved
- the land is resilient, in good condition, and requires minimal government oversight
- measures have been adopted to preserve all significant values and interests in perpetuity
- all public interest and planning requirements have been identified
- all other requirements under the Land Act 1994 have been met.
Last updated 11 September 2012
