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.
Township leasing is a secure and regular land administration system that allows land to be exchanged or traded.
Traditional Owners through the consultative forum will continue to have a say in how their land is used.
Traditional Owners may receive funding to invest in economic development through an upfront payment of rent when the lease is signed. This upfront payment needs to be paid back, but when this is done, or when a number of years has passed, the Traditional Owners will start to receive the rent money earned by subleasing the land.
When the township lease is signed the land is surveyed and registered. This means that the land is divided into lots that can be subleased and traded with certainty.
A secure tradable land tenure system and a registered survey of the land gives potential investors security, which encourages businesses to invest in the community and leads to economic growth, business investment, creates jobs, opens up new opportunities for business and home ownership for local people, while ensuring that cultural integrity is maintained.
Because the Executive Director holds a township lease over the whole community, planning and development laws can be applied and enforced consistently. This means that people who want to develop Aboriginal land within the community must do so responsibly, and comply with all the rules.
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.
Township leases are voluntary agreements that do not affect the services provided to a community. So regardless of whether a lease is signed or not, communities can still expect the same level of government services as before. This includes health, education or local government services.
What a township lease does is create a regular, secure land administration system that provides certainty of tenure through long-term tradable subleases. This means that government and commercial developers can operate in the township knowing that they have secure land under their sublease agreement. This allows government to build new infrastructure, including community housing, and have authority to maintain them over time through their subleases.
Wherever possible the government tries to get long-term leases over its buildings in remote Aboriginal communities in the Northern Territory. This allows governments to maintain facilities and services more easily, and properly plan for future services and infrastructure.
Also, communities are surveyed after a township lease is signed, and the Executive Director ensures all developers comply with planning and development laws. This helps make sure all community infrastructure will be properly planned according to the rules.
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.