The Australian Capital Territory (ACT) is the
only Australian jurisdiction where Crown leasehold land tenure is
the primary form of tenure. Under the Crown leasehold system,
land remains the property of the Commonwealth of Australia and is
managed by the ACT Government on behalf of the Commonwealth.
Land may be leased from the ACT for various purposes.
A concessional lease is a lease granted by the ACT for less than
market value, usually on the expectation that the lessee will
provide a community benefit to the ACT, in return for obtaining the
Given the beneficial nature of their terms, concessional leases
usually include very restrictive purpose clauses that severely
limit commercial activity on the land.
Exception to indefeasibility
Indefeasibility is a key concept in the operation of the Torrens
property system throughout Australia.
Until recently the Planning and Development Act 2007 (ACT)
(Act) provided an exception to indefeasibility
arising from some dealings with concessional leases in the ACT.
In particular, section 265(2) of the Act states that any dealing
in a concessional lease without consent from the relevant authority
had no effect. The purpose of this section is to prevent
concessional leases being transferred to entities which are not
able to use the land for the limited purposes permitted under the
This concept, however, is in direct conflict with section 58 of
the Land Titles Act 1925 (ACT) which states that the holder of a
certificate of title registered in the ACT Register of Land Titles
has valid title that is paramount over other interests.
Confirmation of indefeasibility
In NSW the primacy of the legislative concept of indefeasibility
was recently confirmed by the NSW Court of Appeal in Koompahtoo
Local Aboriginal Land Council v KLACL Property Investments Pty
Limited & Ors1.
That decision confirmed that registration of a dealing in the
NSW Register of Land Titles is valid and effective despite
contravention of legislation other than the Real Property Act 1900
Although not determinative in the ACT, the decision in
Koompahtoo cast doubt over the effective application of
section 265(2) of the Act, where a dealing in a concessional
lease is registered at the ACT Register of Land Titles in
contravention of the consent requirements under the Act.
In response to the decision in Koompahtoo and the uncertainty
created by the existing legislative conflict, the Act has been
amended by the Planning and Development (Concessional Leases)
Amendment Act 2010 (ACT). A new section 265(3) has been
introduced which makes it clear that the indefeasibility principle
stated in Koompahtoo applies in relation to concessional leases in
Accordingly, section 265(2) no longer applies to any dealings
registered in the ACT Register of Land Titles in conformity with
the requirements of the Land Titles Act 1925 (ACT).
The Act has also been amended to:
make it easier to identity whether a particular lease is
introduce a new category of lease in addition to concessional
and market value leases called "possibly concessional" in
order to warn a person that the lease might be concessional and to
encourage proper due diligence.
Please do not hesitate to contact the writers if you have
concerns regarding the use of concessional leases in the ACT.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
1  NSWCA 6
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Council announced planning policies to encourage more inner suburban retirement village and aged care development.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).