Australia: Prospective Sydney waterfront property buyers cautioned over lapsed Roads and Maritime Services leases

In brief - Don't assume you can use those maritime structures

Prospective purchasers of Sydney waterfront properties should check existing Roads and Maritime Services leases and licences covering any maritime structures or run the very real risk of not being able to use their maritime structures or have access to Sydney Harbour from their property.

Multitude of wetland leases administered by Roads and Maritime Services

Roads and Maritime Services (RMS) administers more than 1,600 wetland leases covering foreshore structures in Sydney Harbour, including jetties, pontoons, boat ramps, boatsheds, landing platforms, harbour swimming pools, steps, ladders, davits, slipways, mooring pens and mooring piles.

However, it is not correct to assume that there must be a current lease in place for any foreshore structure on the property you are considering buying. RMS is in the process of rolling out new leases, but these cannot be drafted simultaneously due to the sheer number of leases.

Standard conveyancing searches do not encompass maritime tenures

There may also be a licence for a non-exclusive use which could cover such things as shared mooring piles, sewerage or drainage outlets into the harbour and public walkways, in addition to the lease area.

It is important to recognise also that the majority of RMS leases are on a yearly holdover provision and some do not allow for assignment. Nor can you do a standard conveyancing search for maritime tenures to determine if there are any compliance issues.

Make sure that your lawyer does the due diligence properly

The reality is that many practitioners and real estate agents acting for either the vendor or the purchaser are unaware of these considerations and consequently overlook them.

Presumably if you are buying a waterfront property, you are doing so not just for the view, but for the ability to use the maritime structures and to access Sydney Harbour, so it is imperative that your lawyer does the due diligence properly.

Advertising for sale of waterfront properties can be misleading

I know an instance when a real estate agent rang RMS asking for an urgent lease for a property which was being sold in Mosman. It was subsequently discovered that although there was a reclamation and harbour swimming pool adjoining the property, these were leased to the next-door neighbour.

As a consequence, advertising for the sale of the property was misleading, as any prospective buyer would not be able to access the waterfront without trespassing over the reclamation leased to the adjoining owner. Fortunately, in this instance RMS successfully negotiated with the adjoining owner for the reclamation to be shared.

Notifying RMS when you are selling a waterfront property

Owners who are considering selling a waterfront property should advise RMS as early as possible of the sale, as Roads and Maritime will need time to prepare a Deed of Surrender of the existing lease and a Deed of Consent to Assignment, or possibly a new lease. Notifying RMS of a proposed sale is a condition of the owner's existing lease.

These documents need to be executed prior to settlement, but will not come into play until the incoming purchaser becomes the registered owner to allow continuation of access to the foreshore and the use of the maritime structures.

Checklist: what you need to know about the foreshore structures on the property you are buying

  • Have there been any notices served on the lessee in relation to carrying out repairs to the maritime structures or for non-compliance matters?
  • Is there a valid development consent in place?
  • If the maritime structures predate the Environmental Planning & Assessment Act 1979, the lessee may be relying on existing use rights. Enquiries should be made as to whether the existing use rights have been used continuously or whether there has been abandonment, due to the passage of time.
  • Review carefully any special conditions attached to the lease, as these may contain restrictions on usage, how vessels are to be berthed, measures to protect sea grass and the environment generally, the need for repairs in a defined time period or for structures to be removed due to lack of maintenance or repairs.
  • Is there a shared occupancy agreement in place? You may find that you have to share the maritime structures with the adjoining landowner, either at the present time or some future date, if the adjoining landowner buys a boat. Shared arrangements can cover jetties, pontoons, mooring pens and/or mooring piles.
  • Is there a requirement that access be provided over the maritime structures to enable public access to the foreshore? This will be covered by a licence.
  • Can you permanently or casually berth your vessel? There are sometimes restrictions that you may only casually berth. Check the definition of the lease as to the duration that you can casually berth.
  • Are there any restrictions on what type or size of vessel can be berthed in the mooring pen? The maximum dimensions of the vessel that can be berthed are set out in the schedule of the lease.
  • Are there any unauthorised works? Check the lease plan against what has actually been built.
  • Will you be responsible for maintaining or repairing the seawall? This could be very expensive.
  • Is there a reclamation in situ and is this covered by the lease? At the present time RMS is contemplating allowing lessees to purchase reclamations adjacent to their freehold title.
  • Can you store kayaks or canoes on any davit that may be in place? Check to ensure that this is allowed by the relevant provision of the lease.
  • Check the terms of any shared occupancy arrangement as to financial contributions for ongoing maintenance that need to be arranged with the adjoining landowner.

For further information, please contact:

Frank Krstic
Property acquisition, development and sale
Colin Biggers & Paisley

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.

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