The 2018-2019 Victorian Budget: Does your project involve sale, acquisition or leasing of land?

In response to the demands placed on existing State services and public infrastructure by strong population growth, the Victorian Budget announced allocation of funding for several substantial infrastructure projects.  Funded projects have been identified in diverse fields, such as: road and rail; building and expanding hospitals; purchasing land for new schools; and delivering new or upgraded facilities for emergency services staff and volunteers.  In addition, the Federal budget announced funding for the State's Airport Rail Link and North East Link freeway infrastructure projects.  In order to deliver these infrastructure projects, sponsoring agencies will need to acquire, sell, lease and access land, and in doing so, navigate legislative and policy frameworks regulating Government dealings with land.

The Victorian Government Land Transactions Policy and Guidelines April 2016 establishes strict requirements for Victorian Government agencies when dealing with the sale, acquisition and leasing of land.  Key features of the policy include that in the absence of an exemption, agencies:

• must obtain the Victorian Government Land Monitor's approval for any sale or purchase of an interest in land with a value of $750,000 or more before an offer is made;
• must not grant an interest in land at a price less than the current market rent or sale value, as determined by the Valuer-General Victoria (VGV);
• must not purchase an interest in land at a price which is greater than the current market rent or sale value, as determined by the VGV;
• must not sell any land without following a public process such as an auction, tender or expression of interest campaign;
• prior to offering land for sale by a public process, have in place the most appropriate zoning which enables the land to be used or developed in accordance with its highest and best use; 
• must not grant a lease of land which contains an option to purchase; and
• must have regard to the existence of native title rights and interests in the land.

Where a lease over Crown land is proposed, an agency must consider: whether the land is reserved for a public purpose; who the appointed land manager is; the criteria for approving the permitted use and agreement terms as set out in legislation; and the maximum tenure lengths permissible.  These are typically set at 21 years for leases and 10 years for licences (each including options).  This analysis will help to identify the Government entity with authority to grant the lease and any salient legislative restrictions such as maximum terms and limitations on permitted uses.  The Leasing Policy for Crown Land in Victoria 2010 administered by DELWP ensures a consistent approach to leasing of Crown land by requiring:

• use of DELWP's standard form leasing documentation; and
• all lease proposals by a land manager other than the Minister for Energy Environment and Climate Change to have the Approval in Principle of the Minister and subsequent terms and conditions approval.

The VGSO Property and Native Title Teams have extensive experience in Government property transactions and are well placed to assist agencies in navigating compliance with legislation and policies applicable to sale, acquisition and leasing of land.

Anthony Leggiero
Managing Principal Solicitor
9947 1430

Mary Scalzo
Managing Principal Solicitor
9947 1419