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What is Trust Leasehold Land in Qld. Worth

A friend of mine is looking at "purchasing" a leasehold grazing property in Queensland. The question that is glaringly obvious is; what exactly is leasehold under the new Trust Lease worth?

In view that there is a buy price and rent applicable to the leasehold land what does the "purchaser" actually get for his money?

When you take into account that the following clause is present on many of these leases: "No compensation for improvements or development work is payable by the State at forfeiture, surrender or expiry of the lease, but the lessee has the right to remove the lessees movable improvements within a period of three months from the forfeiture, surrender or expiry of the lease, provided all money due by the lessee to the State on any account whatsoever has been paid, or be required to remove those improvements as specified in any further condition of lease."

If we assume that there are no livestock on the property, doesn't that make the purchase price zero, in view that the improvements you must maintain, if you cannot move them, are worthless. I guess the comparison here is leasing a factory for a term, to produce widgets, the only outgoing in relation to the property itself is normally the rent.

Who would purchase nothing and also pay rent???

How do the banks now justify lending money when the asset looks as though it is worthless?? Is the mortgage held over a Trust Lease instrument worth anything, there is no land assett as this is State owned (Crown) land.

Surely everyone is going to opt to freehold, based on the following from the Land Act 1994; if they don't, they are loosing their only assets on the property, i.e. the developments. However then the lessee has to pay to convert to freehold after paying for the potentially worthless lease in the first place.

LAND ACT 1994 - SECT 166

166 Application to convert lease

(1) Subject to subsections (2) to (4), a lessee may apply to convert (a conversion application)--

(a) a perpetual lease to freehold land; and

(b) a term lease to a perpetual lease or to freehold land.

(2) The lessee of a term lease issued for pastoral purposes may only apply to convert the lease--

(a) to a perpetual lease; and

(b) after 80% of the existing term on the lease has expired, unless in the chief executive's opinion, special circumstances exist.

(3) A lessee of a term lease not issued for pastoral purposes may only apply to convert the lease to freehold land.

(4) A conversion application can not be made for a lease if it contains a reservation that all of the lease land is a future conservation area.

(5) A conversion application may be rejected without consideration under section 167 if--

(a) the applicant has made an earlier conversion application and the application was refused; and

(b) there is no relevant change in circumstances from the earlier application.

(6) In this section--

existing term, of the lease, does not include an extension under section 155A, 155B or 155BA of the term of the lease.

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Replies to This Discussion

Permalink Reply by Lynette McDougall on January 22, 2012 at 9:53am

I have no idea how many people and how much it has cost - we have a number of staff around the state who deal with applications under the Land Act. Apart from a few new people who were employed to do the inspections to assess the land condition to determine the length of renewal that could be offered, the same number of people would be processing the renewals even if the Delbessie Agreement didn't exist. The extra cost of the extra assessment people wouldn't be that great compared to the overall cost of employing people to process all the Land Act applications. Maybe you could do a Right to Information request and find out. Or get your local member to ask the Minister as a Question on Notice. It will annoy a few public servants who have to try to figure it out. It won't be me providing the answer!

Permalink Reply by Joanne Rea on January 22, 2012 at 1:49pm

The link to the David Kempton/Herron Todd White document that Greg Blackmore has put up is well worth an intense read. http://www.htw.com.au/Industry_Presentations/david%20kempton%20pres...

Lynette has said, “You can apply to convert it to a Perpetual Lease, however native title will need to be addressed before a Perpetual Lease can issue.”

Lynette has also said, “John and Greg - no one has successfully applied to convert a pastoral holding or term lease for pastoral purposes to a perpetual lease yet (native title is the killer), so no one knows yet what will happen if you then apply to convert the perpetual lease to freehold...”

On careful reading of David Kempton’s article, it would appear that this is a policy decision by the state government not to allow the process in the Native Title Act alone and instead to require an Indigenous Land Use Agreement that can in some practical respects be more difficult to achieve.

"12 The conversion of a term lease to a perpetual lease is a permitted future act pursuant to the Native Title

Act 1993. The NTA provides a notification and objection process 24IC, 241D, 24MD(6B). The State will

not apply these provisions and requires the lessee to obtain the native title parties consent by way of an

ILUA"

Permalink Reply by Rob Moore on January 22, 2012 at 3:21pm

Thanks Joanne,

It is quite clear the message to John Michelmore and to his mate and everyone else-

YOU would HAVE to have ROCKS in your head or far too mush SPARE money to even consider such a plan.

Of course if your a foreign owner and want it for a coal mine- no worries.

This is a clear agenda to destock the grazing lands and when we have the said "MINISTER" deciding on whether the block is in "good condition"- the lunatics are in charge of the asylum.

Remember that in the year 2012 -parthenium and turkey bust are good and bio diverse and expect an $110000 fine if you tamper with that.

Carbon Farmers of Australia unite- go on the dole -give all your stock away- tell the bank to "come and get it" (they won't)- join just grounds and we can get a party circuit going where we visit each other and see who has the best woody weeds and ferals and who can count the first 10000 roos on one block........

Permalink Reply by Rob Moore on January 22, 2012 at 4:03pm

Topics in this site

Permalink Reply by Rob Moore on January 22, 2012 at 4:41pm

Just been trawling around in there and all is there if you click here-

http://www.budget.qld.gov.au/budget-papers/2011-12/bp5-part-14-2011...

At a glance - Cost to run the dept this year is $1,053,948,000

Wages costs are $ 505,000,000 so at $100K per person - that makes

5050 staff- most with very sharp and heavy environmental agendas to crawl all over the 50 or so lease renewals in the last 4 years and the 65% that will come up for review in the short term future.

Yes - it is easy to see that being that short staffed that they would have trouble ground truthing such a work load. Considering that they are the WA -DEC equivalent and what happened to Matt and Janet - it is no wonder every cockey left in this country is s*** scared.

Somebody should get it in writting from Newman -just what he intends to do with this (just one dept).

My advice- you can keep your job but we are decentralising you all to the regions where your victims live ha ha!

Permalink Reply by Lynette McDougall on January 22, 2012 at 5:23pm

Your laughs have fallen flat, if you think I'm running scared at the thought of being decentralised. The Land Act administration part of DERM decentralised back in 1991/92 under Goss, so Campbell Newman won't be able to make any changes there - though he might decide to centralise.

You do realise that not everyone who works for DERM in in your small area of interest. The 5050 employees aren't all involved in leasehold renewals or environmental assessments for those renewals. You listed all the links from DERM's website. How many people do you think are involved in Property Titles and Valuations, Water, Indigenous Interests, Mapping and Surveying. None of them have anything to do with lease renewals.

$100,000 per person? I wish I got that much. Most of the people who do the day to day Land Act administration are only making half that or less.

Permalink Reply by Rob Moore on January 22, 2012 at 6:06pm

Not to mention that AGfarce with its 22 full time employees gets a separate $9 mill to deliver something or other regarding PMAV's.

I am well aware that 90% of the dept aren't on the leasehold case eg Greg Withers bs Climate Change junket would soak up at least $300 Mill but don't for get that they are all "on call" like Mr Franks from the herbarium to fly out to Charleville and have a cry about someone killing turkey bush and daring to make grass to feed cattle.

OK Lynette -I'm sure you'd be happy living in Birdsville but the 7000 others( seem as how the pay is so bad!) might have different views.

Permalink Reply by Lynette McDougall on January 22, 2012 at 6:23pm

I won't have to move - my role was decentralised back in 1991/1992. We don't have an office in Birdsville. There used to be one in Quilpie, but when we lost Mines from our departmental structure we lost that one. We used to have one in Cunnamulla too, until the incumbent became too sick with a brain tumour to continue, and they did away with the position and closed the office when he retired due to ill-health.

I've no idea what Agfarce are supposed to be doing, but I agree that it would appear to be a complete waste of money.

Anyway, I have high hopes of a major shake up of the department and the legislation it administers if Campbell gets in. A few little fiefdoms that have been created over the years will be on shaky ground.

Permalink Reply by Michael Petterson on January 22, 2012 at 9:44pm

It sounds like the entire DERM department needs a good shake-up if not dismissing them all and bringing in new staff that actually know how to do the job properly.

Permalink Reply by Lynette McDougall on January 23, 2012 at 6:05am

What a ridiculous statement. You can't replace the entire workforce of a department and expect anything to get done better. The touchy feely, tree hugging, areas of the department are the only ones that need the shake up. And they are only a small part. I think Campbell has them in his sights....

Permalink Reply by Rob Moore on January 23, 2012 at 8:43am

I was trying to suggest that the whole landmass west of the sea board will be vacant pretty soon if this piosonous socialist/green mindset that is being sown in our schools does not get nipped in the bud VERY soon.

The only thing left will be feral animals and weeds and fly in fly out camps. I'm sure a lot reading this comment would think- here's that bloody old pessimist going on again. I just came upon the head teacher from the Riverina - the You tube that Dale posted and - boy oh boy when you think that his area is Mayfair and Park Lane and out here we are the purple squats (Whitechapel)- is it any wonder that people are loosing hope and taking their own lives????

Link to youtube in the discussion, Talking Turkey, But Not About the Barrages by Jennifer Marohasy

http://justgroundsonline.com/xn/detail/3535428:Comment:337157

Permalink Reply by Gaucho Gill on January 23, 2012 at 10:04am

Lynette you have stated this:

“A trustee lease is something totally different to a term lease. If think it has been ascertained that the lease tenure referred to in this discussion is a term lease for pastoral purposes, or a pastoral holding. A trustee lease is a totally different kettle of fish and not the issue here.”

I am not finished with the Trustee Lease even if you are.

Please see the attachment. The document had to be edited to protect the current owners Privacy under the relevant Commonwealth legislation. This Lease is current and it clearly states the Tenancy is TRUSTEE, and it replaced a Pastoral Holding under the previous Act.

Please note the Conditions, all the Conditions but in particular A61 (12); L108.

“A61 (12) No compensation for improvements or development work is payable by the State at the forfeiture, surrender or expiry of the lease ……”

“L108 The lessee must not effect any further structural improvements without the consent of the Minister…..”

It’s really immaterial what you and your DERM people call these leases they are all the same and I have reviewed several which have been issued under the 1994 Act.

“The department cannot advise an intending purchaser whether the lease can be converted to perpetual lease under section 166”.

Obviously they cant be converted so they are worthless.

“The conditions of a former lease are not brought forward to a new lease unless they are still valid. Any improvement condition on an old lease that had been satisfied would not be brought forward to a new lease. There is no need to search the old expired lease. The only conditions that are relevant to the lease are its conditions, not the conditions of the previous leases.”

All the old QLD leases (under the 1910 – 1966 Act) I have seen carry forward the Conditions of the previous Leases, which particularize all the Improvements, in the Reservations and all contain a clause …“The lessee must during the whole term of the lease, to the satisfaction of the Minister…, maintain all existing improvements on the leased land in a good and substantial state of repair.”

It’s the same in the current lease see L110 in the attachment. So therefore a lessee who does not …, maintain all existing improvements on the leased land in a good and substantial state of repair is in breach of s 213 (4) of the Land Act 1994 which says: “213 Obligation to perform conditions - (4) To remove any doubt, it is declared that if no action is taken on a breach of condition of the tenure, it is not a waiver of, authorisation of or excuse for the breach.”

And, s 214 (2) (a) (ii) of the Land Act 1994 which says: “214 Minister's power to give remedial action notice - (2) For subsection (1)(a) a ground for giving the notice is that— (a) the Minister is satisfied the lessee or licensee is—

(ii) breaching a condition of the lease or licence, other than a condition that there must be a land management agreement for the lease; or”

“Define acceptable standard. The department would take no notice of such a request from a potential purchaser………..”

The acceptable standard would be either in the mind of the Minister or the CEO of DERM, would it not? After all they are the Landlords. However, I would have thought that abandoned homesteads with kangaroo $hit throughout them; fences 100 years old not maintained stockproof; dams with fences, windmills tanks and troughs abandoned with cattle walking into the dam; bores caved in, not pumping; yards crumbling into the ground replaced by portable panels (which are not a fixture), that form part of the Conditions of Lease, surely could not even in DERM’s terms be satisfactory to satisfy the Lease Condition …“The lessee must during the whole term of the lease, to the satisfaction of the Minister…, maintain all existing improvements on the leased land in a good and substantial state of repair.”

Leases are not Tenure and should not be described as such; as quoted by Sir William Blackstone: Vol. 2, Commentaries on the Laws of England (1766) page 89

“We have before remarked, and endeavored to assign the reason of, the inferiority in which the law places an estate for years, when compared with an estate for life, or an inheritance: observing, that an estate for life, even it bepur auter vie [for another’s life], is a freehold; but that an estate for a thousand years is only a chattel, and reckoned part of the personal estate.”

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