A Township Lease brings in a simpler land administration system which can benefit the whole community.
Secure tenure and land administration system
A Township Lease brings in a simpler land administration system which can benefit the whole community. A Township Lease provides certainty of tenure through long term subleases. Governments, local organisations and commercial developers can operate in the Township knowing they have secure land tenure under their sublease which creates better conditions for business and economic development opportunities.
The secure tenure system is also an incentive for governments to invest in the community, manage government assets (such as schools, clinics, and housing) and improve service delivery.
Subleases and rent
Once a Township Lease has been agreed and a Head Lease has been granted, the Executive Director can then grant a sublease for each individual lot in the Township.
Subleases are usually offered to every occupier of land in the Township. Subleases are legally binding agreements between the sublessee and the Executive Director which specify how the land and any improvements (buildings and other infrastructure) can be used.
The Executive Director is required to act commercially, and collects rent on all subleases in the Township on behalf of Traditional Owners. Rent is calculated using the land’s ‘unimproved capital value’, which is determined by an independent licensed valuer. The Executive Director operates under a ‘positive obligation’ to secure subleases for all occupied lots, thereby maximising rental returns for Traditional Owners in a Township.
A sublease gives certainty to organisations and individuals who can operate their business or run their services for the years of their sublease and under agreed terms and conditions.
Securing government service delivery
Under a Township Lease, the Executive Director grants subleases to governments so they can secure their interest in government infrastructure – this includes police stations, Public Housing, women’s safe houses, as well as electricity, water and sewage.
This means that governments are more likely to invest in and maintain services in a community, as a sublease guarantees secure tenure over the building asset and makes it clear who is responsible for maintaining it. It is currently the secure tenure policy of both the NT and Commonwealth Governments to secure interests in buildings in Township Lease communities by subleasing.
Governments pay rent for subleasing most assets, so Traditional Owners will earn rent when governments sublease buildings and assets on their land.
Economic development opportunities
Township Leasing creates an environment for investment and economic development by establishing a secure and regular land administration system.
Under existing Township Leases, Traditional Owners have received funding to invest in economic development through an advance payment of rent when a Township Lease is signed. Traditional Owners also receive fair rent in return for the use of their land, which provides a stable and long term source of revenue that allows them to obtain loans and further invest. Community residents can obtain a loan to buy or build their own home in the Township through a long term home ownership sublease.
Secure, long term, tradeable tenure encourages businesses and government to invest in the Township and lending institutions like banks can provide commercial loans to businesses.
Business investment in the Township creates jobs for local people and opportunities for business partnerships with Traditional Owners.
Examples of development opportunities enabled by a Township Lease include the establishment of Traditional Owner trusts and business arms, retail outlets, accommodation facilities, and home ownership.
Case Study - Mantiyupwi Pty Ltd
Mantiyupwi Pty Ltd is a business operating in Wurrumiyanga, a Tiwi Islands community which has had a Township Lease since 2007. Mantiyupwi Pty Ltd is wholly owned by the local Aboriginal Traditional Owners and established as a private company to invest funds from the advance payment of rent received on signing of the Wurrumiyanga Township Lease in 2007.
Since 2008, Mantiyupwi Pty Ltd has grown into a successful commercial operator, developing and managing numerous business ventures and employing local staff in Wurrumiyanga. The company has had commercial success with building a store complex including a supermarket and four smaller retail outlets, investing funds from the advance payment as well as a obtaining a commercial loan from a mainstream bank.
Other investments include the purchase of a former workers camp, now run as a commercial accommodation and office complex, the acquisition of Tiwi Tours, establishment of a car hire business, lawn mowing and garden maintenance services, and other commercial accommodation facilities.