If you're buying Crown land, there are some extra matters you must consider.
Flicking through the property and business sections in today's newspapers, it is clear that there is no shortage of properties for sale, for auction, or subject to expressions of interest. While these properties may be available for purchase, I think it is fair to say that they are not being snapped up at levels seen in the last few years and gone are the days of making a quick buck from land transactions. In fact, some of the people selling are being forced to do so to raise much needed revenue due to those three words we seem to be hearing all too frequently, the global financial crisis.
The current selling of properties is not limited to private individuals and corporations but also the New South Wales Government. While the New South Wales Government's motives may differ from private individuals and corporations, one common thread they all have is that they are doing so to raise revenue.
Approximately half the land in New South Wales is Crown land. Some of this land is allocated to public uses such as national parks, state forests, schools, hospitals, recreation areas and areas of environmental importance.
This leaves other significant portions of Crown land that can be used for leasing for commercial or agricultural purposes, through to land development and sale. Since early settlement in New South Wales, Crown land has been put aside for public purposes and sold or leased for agriculture, grazing and settlement.
In particular areas, land is becoming increasingly scarce for homes, commerce and industry and as a result the New South Wales Government has developed and made available for purchase certain Crown land. In this way, Crown land is provided where it is needed and public revenue is generated. In the current market conditions, it appears that the New South Wales Government is keen to offload parcels of Crown land which it no longer requires for any government or community purposes.
Mini-Budget - Businesses And Crown Land Under The Hammer
The New South Wales Government's mini-budget, announced in November 2008, did not have any major surprises and the objective of reducing spending and increasing revenue was clearly evident.
The mini-budget was a response to the increased risks to the State's revenues and expenses and the downward revision to the State's credit rating outlook as a result of the global financial crises.
One of the strategies in reducing its operating expenses and increasing revenue is to sell Crown land or government businesses (which is likely to include the sale of Crown land attached to those businesses)
- sale of power stations near Lithgow and in the Hunter Valley;
- sale of surplus school and TAFE land and property including Seaforth TAFE and up to 140 hectares of land at Hurlstone Agricultural High School;
- sale of EnergyAustralia, Integral Energy and Country Power; and
- sale of the waste business WSN Environmental Solutions.
Other current Crown land commercial opportunities identified on the Department of Lands website include:
- redevelopment of a three and a half hectare site at Anna Bay (Port Stephens) for tourism related purposes;
- Ballina Trawler Harbour and Regatta Avenue Harbour redevelopment;
- Batemans Bay Marina redevelopment which will include a new state of the art marina and associated onshore developments;
- Boyds Bay marina development;
- Commercial development of tourist facilities and services (including tourist attractions and tourist accommodation), and maritime facilities including marina/s and support services as part of the Coffs Harbour Jetty Foreshore Precinct;
- the Gosford Challenge, being a major urban redesign for the Central Coast encompassing the waterfront at Gosford to north of the railway station and the area from Rumbalara Reserve to West Gosford;
- redevelopment of the Nelson Bay Boat Harbour as part of a larger revitalisation scheme for the foreshore area;
- Ulladulla Harbour Concept Plan which will include the redevelopment of the Crown land in the harbour and surrounds to provide enhanced facilities and attractions for locals and visitors; and
- Wollongong Harbour and Foreshore redevelopment.
However, the sale and acquisition of Crown land can be a complicated process and this paper serves to provide guidance to a purchaser in understanding the process required to sell Crown land, and what issues a purchaser should look out for when purchasing Crown land.
Crown land cannot be sold until a number of statutory processes are carried out, such as land assessment, the investigation of Aboriginal land claims and native title extinguishment. Therefore, before it offers land for sale, the New South Wales Government must undertake a comprehensive review of the land to make sure that it is in fact Crown land and that it can be sold.
From a purchaser's perspective, the first step would be to obtain title searches (if possible) to confirm that the land is Crown land.
Depending on what is revealed in a title search, it may then be necessary to make inquiries with the relevant branch of the Department of Lands, the Land and Property Information Office and the Native Title Tribunal to discover:
- whether the land is reserved or dedicated for public purposes, (and if it is reserved, who manages the reserve and whether a reserve trust has been appointed). This may involve trawling through old Gazettes and plans; and
- all registered or unregistered interests in the land.
Acquiring Crown Land
Some key points to consider when acquiring Crown land include:
Timing: the purchase may involve significant delays and would depend on the co-operation of the Minister for Lands as the Minister must be satisfied that the land has been assessed under the Crown Lands Act. The Act requires the Minister to:
- prepare an inventory of Crown land;
- assess the capabilities of Crown land;
- identify suitable or preferred uses; or
the Minister for Lands may determine that it is in the public interest to sell the land without first assessing the land and the Minister has had due regard to the principles of Crown land management.
Reservations: if the land is reserved, the Minister for Lands must revoke the reservation. The Minister does not have power to sell land reserved for a public purpose, but does have the power to revoke a reservation by complying with the above conditions and publishing a notice in the Gazette and in a State or local newspaper.
Dedications: if the land is dedicated, the Minister for Lands must revoke the dedication. Revoking a dedication will involve complying with similar conditions attached to the revocation of a reserve but also Parliament must approve the revocation.
Sale Process: if the Crown land is reserved for a public purpose and is administered by a reserve trust, the reserve trust may sell the Crown land subject to the following conditions:
- decide on the terms and conditions of the sale;
- publish notice of the decision to sell the Crown land in a State or local newspaper, setting out the date and the terms and conditions of the proposed sale, the location of the Crown land and other particulars; and
- apply to the Minister for Lands for consent to the sale.
Once the Crown land is able to be offered for sale, the Minister for Lands or the reserve trust (as vendor) will provide a Contract for Sale and standard conveyancing methods are used to complete the acquisition.
Returning to the mini-budget and the global financial crisis, the State Government has identified that the sale of Crown land is a viable and effective way to raise revenue provided it has been determined that that parcel of Crown land is no longer required for any government or community purpose.
This process of selling Crown land may not be as easy and straightforward as selling land that is privately owned, given the requirements that must be satisfied by the New South Wales Government under the Crown Lands Act. However, it is not everyday that State land assets come up for sale and some of that land will have unparalleled commercial development opportunities. So, for those that are happy to navigate through the process, Crown lands which were once out of reach to the private sector are now being offered for sale and you can be sure that the "For Sale" sign won't be up for too long.
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.