Business Law Articles
By: HHG Legal Group
West Perth, Australia
Often landowners in rural areas will allow other family members to build homes on the family farm or semi rural property. This article deals with the particular issue of the grant of a long term lease or licence in these circumstances when allowing other family members to build homes on the family farm.
This seems fairly uncontroversial at first glance. It helps out younger family members in a real estate market that is becoming increasingly out of reach for young West Australians. What must be considered is, what rights do you actually want to give those family members by allowing them to build on the property?
A particular issue arises when this happens without subdividing off the land on which the house is built, from the rest of the farm. If your intention is to grant a long-term lease or license of part of your lot to a family member, then you must proceed with caution.
In WA, section 136 (1) of the Planning and Development Act 2005 requires you, as the landlord, to obtain the prior consent of the Western Australian Planning Commission when granting a long term lease or licence over land which is part of a lot for a term (including option periods) exceeding 20 years.
If the prior consent of the Western Australian Planning Commission is not obtained then the lease or licence will have no effect and will be unenforceable. This means there will be no formal recognition of the rights of the family member who built the home on the property.
This section seeks to prevent landowners short circuiting the government approval process by effecting a subdivision of land by granting a long lease. Many families granting long leases or licenses may be unwittingly caught by this legislation.
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