Crown leases & licenses

Buying a property with a jetty, boatshed, or other crown license land/structures included?   Here are our top 7 tips.

Most jetties and waterfront boatsheds in Tasmania are located on Crown land. So what is Crown land? It is ‘public land’ owned and managed by the State Government of Tasmania.

Crown licences are agreements that authorise the use or occupation of Crown land for a specified purpose.  Licences, unlike leases, do not allow exclusive occupation and are often issued for the shared use of Crown land. Most Crown land licenses are transferable, subject to the State Government’s approval.

Where a property is sold to include the rights and benefits of nearby amenity like a jetty that is used under a Crown license, the purchaser of the property will more than likely be expecting to receive a transfer of the license as part of their purchase of the property.

However, the transfer of Crown licenses usually do not happen when settlement of the property occurs and it can take several months following settlement for the process to be completed. Accordingly, a purchaser should consider what protections are necessary in the Contract of Sale to ensure that they get what they pay for at settlement as a waterfront property with a jetty may be much less attractive without legal and ongoing access to the jetty.

Here are our top 7 tips for purchasers:

1. Check and understand exactly what land and improvements the vendor owns, and what they hold a Crown license for (and that they do actually hold the license).
2. Obtain a copy of the existing Crown license, and check that the terms (if the Crown agrees to transfer and continue them) are acceptable. Standard terms usually relate to maintaining the land in a neat and tidycondition. New terms may be added or varied when the license is transferred, such as a change in licence fees. You can request that the terms of the agreement are amended in the transfer process in order to meet your particular circumstances. 
3. Consider the contractual protections that may be available by negotiation, including: withholding funds at settlement on the basis that the funds are released to the Vendor when the license transfers or a new license is granted; building inspection clauses specific to structures on the land subject to the license; and due diligence clauses. 
4. Check that all buildings on the Crown license have the necessary legal permissions and that the future intended use is permitted.   For example, have there been illegal building works on the Crown land?
5. Consider having a building inspector provide a report about the condition and safety of improvements on the Crown land. If you are planning to undertake construction on the land after purchase, you can submit an Authority for Works Application at the same time you apply to transfer the license.
6. Check insurance coverage for the Crown license land and improvements – is it available, and what will it cost? Persons who occupy Crown land must be covered for public liability insurance. 
7. A purchase that includes a Crown license is not necessarily a straightforward transaction and that it is prudent to engage a lawyer who understands and can handle the additional complexity of such transactions.

Simmons Wolfhagen has a team of property lawyers with expertise in dealing with Crown leases and licenses, and related contractual arrangements, and can assist purchasers to ensure that they get what they pay for when buying a property.