Sublease Rental Payments

Overview

It is joint Australian and Northern Territory Government policy that secure land tenure is required before major investment in housing and infrastructure can proceed. Under the COAG National Partnership Agreements (NPA) on Indigenous Remote Service Delivery and Remote Indigenous Housing, Governments have agreed to implement land tenure arrangements which facilitate and support maximum economic development and improved public and private housing.

What is a Whole of Township Lease?

A Whole of Township Lease is an agreement between Traditional Owners, represented by the Land Council and the Commonwealth, represented by the Executive Director of Township Leasing. The Executive Director administers the lease on behalf of the Australian Government. A Township Lease provides all occupiers of land within the community with clarity regarding rights and responsibilities in relation to the land and structures. It also ensures that Traditional Owners receive recognition and a fair financial return for the use of their land.

How does the Executive Director issue subleases?

Under the Aboriginal Land Rights (Northern Territory) Act 1976, the Executive Director is legally obliged to administer the lease in accordance with its terms and conditions. Township Leases obligates the Executive Director to 'grant subleases on a commercial basis applying sound business principles.' Therefore it is on this basis that the Executive Director will enter into negotiations with potential sublessees on the terms and conditions of any sublease, including rent.

Why do Government agencies, Housing authorities and Non-government organisations (NGOs) need to pay commercial rent for subleases?

Township lease arrangements aim to approximate ordinary freehold title to the greatest extent possible. Paying appropriate rent to Traditional Owners is an essential element to approximating these tenure arrangements. As a land user, it is essential that all organisations including Government agencies, Housing authorities and NGOs pay appropriate rent for the use of Aboriginal land. This is consistent with practice elsewhere in Australia where rent is paid for the use of land, premises and/or property not owned by the organisation.

The Northern Territory implementation plan under the NPA on Remote Service Delivery also agrees to the payment of land costs for Government facilities on Aboriginal land, which is to be calculated by reference to normal commercial arrangements off Aboriginal land.

Under a Township Lease, rental returns from subleasing flow to Traditional Owners (minus operating costs of the Executive Director).

What valuation methods are used for determining rent?

The Executive Director has adopted a metholodgy to obtain from registered valuers rental values based on the improved capital value for each parcel of land within the boundary of a Township Lease.

The Executive Director also recognises that the implementation of Township Leasing represents a significant change to land use arrangements in communities and, accordingly, is often prepared to negotiate a transitionary period where appropriate.