Licence to occupy – all you need to know
What is a licence to occupy
The Preamble and s 2 of Te TureMāori Act 1993 emphasise the retention and utilisation of Māori land in the hands of its owners, and . In order to occupy multiply owned Māori freehold land you must obtain either:
- A licence to occupy (“LTO”) granted by the owners of the land, the trustees (if the land is under a trust), or committee of management (if there is a Māori incorporation); or
- An occupation order granted by the Māori Land Court.
An LTO allows for a person to be granted occupation over a defined area or site on the land, under specified conditions. An LTO grants a personal right of occupation, rather than a legal interest over the land which means that it cannot be bought or sold.
The Māori Land Court has stated that unlike a standard licence, an LTO on Māori land may also be considered a special type of lease. This is due to the extent of the property rights that can be negotiated, such as:
- Occupation of a defined area or site on land;
- A set term for the LTO;
- Right of assignment;
- Compensation for improvement;
- Payment of rent and rates.
All of these matters should be considered and discussed by both parties when entering an agreement.
How to obtain a licence?
Where Māori land is managed either by a trust or an incorporation, the trustees or the committee of management has the ability to determine who has the right to occupy the land and permission must be sought from them to do so.
In general, trustees or a committee of management are bound by the responsibility to manage the land for the benefit of all of the owners collectively. When considering whether to grant an LTO the trustees will need to ensure that in doing so they are able to meet their obligations and responsibilities as trustees.
Trustees or committee of management members should pass a resolution confirming their support for the LTO and then enter into a written agreement between the parties to ensure that each parties rights and obligations are clearly understood.
Where Māori land remains in multiple ownership without a management entity, permission from the majority of owners must be sought and should be supported by evidence of such, this could be done through a hui of the owners.
When does the Māori Land Court need to be involved?
An LTO is a personal agreement between the parties and generally can be entered into without interference by the Māori Land Court. This means that they can generally be formalised quickly and at a low cost.
The Māori Land Court is to be notified of an LTO where:
- The term is for a period of 21 years or more, including any terms of renewal;
- A party to any licence obtains a transfer, variation, discharge or surrenders a LTO which has a term of over 21 years.
Where the term is for a period of more than 52 years or if 1 or more terms of renewal equate to more than 52 years (a long term licence), approval of the Court must be sought.
Matters to take into account when considering a licence to occupy
An LTO can be granted to allow a person to:
- Live on a specified area of Māori freehold land; or
- Utilise a specified area of Māori freehold land for a specified purpose such as grazing.
Consideration should be had to whether a house is to be placed on at site and what the arrangements for that house will be when the licence comes to an end.
Further factors to consider are what will happen if the person holding the LTO passes away. At law an LTO does not generally form part of the deceased’s estate.
We recommend that trustees and/or committee of management members of Māori freehold land consider whether an LTO policy may benefit your, trust or incorporation. We can also assist with providing a tailored LTO agreement suited to your needs.
If you would like further information please contact Aidan Warren on 07 958 7426.
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