Join Newsletter


First
Last
*
*
Tick all that apply
Please fill the text in this image in the field below to assist us in eliminating spam
 
Further 99-year Crown leases granted to unit owners in Canberra

Further 99-year Crown leases granted to unit owners in Canberra

31 August 2016 Rachel Packham

Canberra’s first 99-year crown leases won’t expire for another seven years, however a handful of lease renewals have already been issued.

The ACT is an anomaly in Australia as home owners lease their land for 99 years, rather than purchase it.

The lease can be easily extended for a further 99 years for a relatively small administration fee, which means the lessee is essentially in possession of the land.

However, unit owners corporations have begun applying for further leases, according to ACT Strata Management’s Darren Walton.

“When people are trying to get loans, the banks need to see that they’re basically the owner,” Mr Walton said.

As leases are set to expire within the next decade, Mr Walton said owners have jump-started the application process to appease the banks.

The first 99-year lease was issued for a block of land on the corner of Giles Street and Wentworth Avenue in December, 1924.

The lease for the block, which now forms part of the Wentworth Gardens units in Kingston, was extended in December, 2015.

Mr Walton managed the complex’s lease extension and said the renewal process was simplified mid last year, which made it much easier for owners corporations.

The new process, introduced in July, 2015, allows an owners corporation to apply for a further 99-year lease without requiring a unanimous agreement between each individual owner.

Mr Walton said the old process made further Crown leases for strata owners “pretty much undoable”.

“It used to be such a long winded and painful process,” Mr Walton said.

He said even if you could track down each individual owner for a signature, there would always be one or two in a complex who would just refuse to sign.

Isher Sekhon, who owns a unit at Wentworth Gardens, said strata management suggested they apply for a further lease after the process was streamlined.

“We discussed it at the [annual general meeting] and decided it would be worthwhile to move from the short lease to a 99-year lease as it would add value for owners and residents when trying to get a bank loan,” Mr Sekhon said.

According to the Environment and Planning Directorate, owners corporations must hold a meeting in which owners can vote on the further lease.

A resolution simply requires a majority vote for the lease application.

The application fee is $413 per complex plus an additional $162 per unit.

“A further 99-year lease must be granted unless the Commonwealth or the territory requires the land for a public purpose,” a spokesperson for the directorate said.

“In practice, the territory has not used its powers to acquire residential land.

“In the very unlikely event that developed residential land was required for essential public works, compensation at market value would be payable.”

The spokesperson said the government had no plans to acquire any residential properties.

The ACT Planning and Land Authority will notify a lessee or owners corporation about 12 to 18 months before the lease expires. A lease does not expire if a further lease application is lodged up to six months after the expiration date.

 

Source: allhomes.com.au

Date: 16 August, 2016