Types of leases
Most of the leases managed by
Te Tumu Paeroa's property team are for the use of rural land.
We also, however negotiate leases for cutting rights, mineral extraction rights, housing tenancies and more.
Leases are generally for terms of up to 10 years. They contain clauses for regular rent reviews as well as for inspection of the property. A lease may also include specific things that owners want such as implementation of a development plan, or erosion control or protection of urupā.
Rent amounts are negotiated on the basis of reports from registered valuers and other reports that help establish the market rental for the land.
Where the lessee agrees to make improvements to the land, market leases will generally reflect the improvements in the setting of the rent.
Perpetual Māori Reserved Land leases
Te Tumu Paeroa is responsible for administering some leases under the Māori Reserved Land Act 1955. These are leases established from the late 1800s on Māori land reserves or land that had been returned to Māori in compensation, and then leased out by the Public Trustee under perpetual leases. Under a perpetual lease, the lessee always has the right of renewal.
Under the original Act, rents were set at a certain rate (5% of the unimproved value of rural land or 4% for urban land) and were only reviewed every 21 years.
These leases were intended to deliver benefits to all parties in their day, giving certainty of tenure to lessees and certainty of income to owners. What was not forseen however, were the effects of inflation leading to very low rentals and financial barriers for owners who wanted to take their land back.
The Māori Reserved Land Act 1997 kept the right of lessees to perpetually renew their leases, but moved to market rents that would be reviewed at least every seven years.
Te Tumu Paeroa has in many cases negotiated an end to the perpetual leases, replacing them with set term leases.
Māori Land Court appointed lease management
Where there is no management structure (e.g. a trust) for the block, and the owners wish to take up a proposal to lease, the Māori Land Court can call a meeting of owners where the lessee's proposal is presented. If the owners agree to the lease, the Māori Land Court will then appoint an agent (often the Māori Trustee as head of
Te Tumu Paeroa) to negotiate and manage the lease.
The lease agreement is then managed by Te Tumu Paeroa.