1. Purpose and intent of the policy
This property management policy supports strategic planning and decision making in relation to property occupancy, management, property responsibilities and required reporting for all parties under property agreements. The policy references acquisition and disposal of council land and property in accordance with councils obligations under the Local Government Act 2020. It supports consistency and transparency in occupancy arrangements and management and provides direction on maximising occupancy and utilisation of council managed assets.
The principles of this policy support the four objectives of the council plan 2021 – 2025, place, people, environment and economy.
2. Policy objective
The responsibility for management of all property transactions lies with the Director of Corporate and Governance (DCG). Council will refer to and align with relevant council plans and strategies when planning and conducting property transactions.
Council owned land and buildings must be utilised to meet community needs, benefit objectives and expectations consistent with the 2021 – 2025 Council Plan and Asset Management Plan 2022.
This policy provides a clear, consistent and transparent approach to establishing and implementing property management processes and responsibilities under a range of tenures for council owned and managed land and buildings. It ensures that appropriate assessments are undertaken and provides guidance on the most appropriate agreement to maximise utilisation and community benefit and reduce property management risks to Council, users and the community.
The policy ensures that council owned land and buildings are effectively managed, maintained, developed and occupied by taking into consideration the community benefit provided and ongoing costs and budgeting for asset maintenance and renewal. It provides accountability for council expenditure related to occupancy agreements, property management budgets and revenues, contributions and lease subsidies.
3. Who this policy applies to
This policy applies to council owned and managed assets in relation to:
- Management of land and property
- Acquisition of land and property
- Disposal of land property
- Revenue and reporting from sales and management of council’s land and properties
4. Definitions of key terms and acronyms used within this policy
Development / improvement
Any expenditure that improves or extends an asset’s future economic benefit in terms of service capacity, service quality and useful life (but does not include maintenance). Categories of development/ improvement are renewal, expansion and upgrade.
Renewal
Expenditure on an existing asset, which returns the service potential or the life of the asset up to that which it had originally. It is periodically required expenditure, relatively large in value compared with the value of the components or subcomponents of the asset being renewed. It has no impact on revenue but may reduce future operating and maintenance expenditure if completed at the optimum time.
Upgrade
Expenditure which enhances an existing asset to provide a higher level of service or expenditure that will increase the life of the asset beyond that which it had originally. It is discretional expenditure which increases operating and maintenance costs in the future years due to the increase in council’s asset base.
Expansion
Expenditure which extends an existing asset, to the same standard as it is currently enjoyed by residents, to a new group of users. It is discretional expenditure which increases future operating and maintenance costs due to the increase council’s asset base, however, it may be associated with additional revenue from a new user group or uses.
Maintenance
Regular ongoing day-to-day work necessary to keep an asset operating. A listing of maintenance tasks is included in a Schedule to the ‘Licence Agreement for council Facility’ document.
Council owned property
Real property to which council has freehold title.
Council controlled property
Real property in which the council has a controlling interest. This can arise through the council being appointed by the State, under the Crown Land (Reserves) Act 1978, as the committee of management for a Crown Land parcel.
Community asset committees
A Community asset committee isa committee established by council under the Local Government Act 2020 for the purpose of managing a community asset in the municipal district.
The committee acts on behalf of the council, with powers (if any) delegated by council. A template committee charter has been developed.
Advisory committee
Formally appointed by council. Cannot have any delegated powers.
Lease
A lease is a right granted by the owner of the land (landlord) to another person (tenant) to have exclusive possession of that land, or part thereof, for a fixed duration in return for rental payment. A lease creates an interest in land that is binding on third parties and is capable of being assigned, unless the lease specifies to the contrary.
May be offered for terms up to maximum 50 years for council owned property or 21 years only for Crown land.
Subject to Local Government Act sec 115 provisions.
Subject to Governor in council consent for Crown lands (see CLRA).
Retail lease
If a lessee is to provide goods or services for sale to the general public, then the lease must be in the form of a retail lease.
Generally subject to a minimum five-year term.
Goods and services provided by a charity organisation is exempt from this definition and a non-retail lease should apply.
Licence
A licence permits a person (licensee) to occupy land (or part thereof) on conditions. The main feature that distinguishes a licence from a lease is that a licence does not permit exclusive occupancy of the land.
Authorising provision in the general local law to make licence agreements for council premises.
Sec 17B of the Crown Land Reserves Act provides the enabling power for committees of management of Crown land to grant licences or agreements for up to three years and not exceeding 10 years.
Occupancy agreement
An occupancy agreement is an agreement that is not a residential tenancy agreement and is not subject to residential tenancies legislation. It will generally apply for an occupancy that occurs for a portion of the year, such as the hire of a venue.
Market value
Is equal to the highest price in terms of money which a property will bring in a competitive and open market. Under all the conditions requisite for a fair lease or sale.
Community groups (with non-for-profit status)
Providing local recreation, sporting, community services and community support with the following general characteristics:
a) provide services to the broader community
b) located within Moyne boundaries
c) do not distribute profits or assets to members or a parent body
d) have a significant component of volunteers
e) have an annual turnover/funding less than $1 million.
Government departments and agencies – Includes both state and federal levels and government appointed instrumentalities. Includes hospitals.
Commercial entities
Businesses and entities operating to make a profit for the owners or shareholders.
5. Policy details
Responsibilities
The Director of Corporate and Governance (DCG) is responsible for all Moyne Shire property management processes and policy supported by the Manager Finance and Property (MFP) and relevant service managers. The DCG and MFP are responsible for the maintenance and renewal of property agreements in collaboration with the relevant service managers.
Implementation of property agreements is the co-responsibility of the MFP and relevant service manager and maintenance and property management issues and decisions need to be reported to the MFP. Service managers and officers must ensure that property management information is filed and / or registered into appropriate council asset management and reporting systems.
Training requirements
Service Managers should complete a property lease training course. Refresher training may be required if significant changes in legislation, policy or procedures occur.
Occupancy types
Council is a direct occupier of a number of Council properties and facilities for the purpose of delivering core council services. These include but is not limited to, administration accommodation, works depots, preschools, visitor centre and libraries. This type of occupancy is not included for the purposes and application of this policy. For the purposes and application of the policy, this type of occupancy is not included.
This policy is to be applied to properties for which other parties are involved in property use and management for the delivery or provision of a service or activity. These occupancies are managed under one of the following types of arrangements. All are based on the ultimate principle that council will retain its ownership or control of the property unless council decided otherwise.
Community asset committee
a) Formally appointed under the Local Government Act 2020.
b) The Committee acts on behalf of the council, with powers (if any) delegated by council.
c) A Committee charter is required.
Advisory committee
a) Formally appointed by council.
b) Cannot have any delegated powers.
Lease
a) Provides a right to use a property for an agreed purpose for an agreed term.
b) May be offered for terms up to maximum 50 years for council owned property or 21 years only for Crown land.
c) Confers a right of exclusive possession for the term of the lease.
d) Subject to LGA sec 115 provisions.
e) Subject to Governor in council consent for Crown lands (sec CLRA)
f) Buildings and structures erected become property of council or Crown
g) Factors to be considered when determining length of term:
(i) Proposed use
(ii) Nature and extent of any development proposed
(iii) Parties previous record in leasing
(iv) Financial stability of the Party
(v) Possible future uses of the property by council or other parties
h) Rental and charges:
i) Dependent on nature of Party
Retail lease
a) If a lessee is to provide goods or services for sale to the general public then the lease must be in the form of a Retail Lease.
b) Generally subject to a minimum five year term.
c) Governed by the Retail Leases Act
Licence
a) Provides a right to use a property for an agreed purpose
b) Can be for an open-ended term or fixed term
c) Does not confer a right of exclusive possession or tenure
d) Authorising provision in the General Local Law to make licence agreements for council premises
e) Section 17 of the Crown Land (Reserves) Act 1978 provides the enabling power for council when appointed as the Committees of Management of Crown land to grant user licences or agreements for up to three (3) years and not exceeding 10 years.
f) Buildings and structures erected become property of council or Crown whichever applies under the current asset management agreement
g) May allow tenant to remove buildings at expiry of licence
h) The form of council Licence must include:
(i) Finance, maintenance and replacement responsibilities; and
(ii) Obligations, responsibilities and rights for both the user groups and council
i) A standard form of licence for Crown Land is also available.
Transaction parties
The parties with whom council may enter into an occupancy arrangement include the following:
Community
Provide local recreation, sporting, community services and community support with the following general characteristics:
a) Have not-for-profit status and as further defined in section 4 of this policy
b) Provide services to the broader community
c) Service is either located within Moyne boundaries or provide evidenced benefits and services to Moyne residents
d) Do not distribute profits or assets to members or a parent body
e) Have a significant component of volunteers
f) Have an annual turnover/funding less than $1 million.
Government departments and agencies
Includes both State and Federal levels and Government appointed instrumentalities. Includes hospitals and statutory authorities.
Commercial entities
Businesses operating to make a profit for the owners or shareholders.
Other parties
Parties not included in the above definitions including charities, member societies and other community-based groups.
Management of property – council as landlord
All assets developed on council-owned land remain the property of council unless an occupancy agreement provides otherwise.
In managing council property, council will:
- Ensure that appropriate signed and current agreements are in place and are effectively administered to adequately protect Council’s interests;
- Maximise occupancy rates of council buildings and ensure equity of access;
- Not permit users or uses that discriminate or promote discrimination against any group or individual
- Not permit users or uses that are criminal or illegal or that negatively impact on the amenity, safety and security of the community or individuals
- Where rental charges are applicable, appropriate rental charges will be applied for the use of council properties based on market value and council’s pricing policies;
- Identify and report on the value of revenues foregone (subsidy) through the application of any below market peppercorn agreements;
- Pass on outgoing charges to the tenant under peppercorn and land lease agreements, including but not limited to rates, levies, utilities and agreed maintenance items (subject to relevant legislation and guidelines);
- Require all agreements to achieve clarity on the ownership of any capital improvements made by tenants or council on council owned land or property;
- Manage all agreements on a centralised corporate agreement register which is publicly accessible;
- In line with the adopted pricing policy, and at its discretion, council may resolve to apply a subsidy to a not-for-profit tenant or where appropriate a sporting club;
Should the council and a prospective tenant not be able to come to terms within the adopted council policies, a resolution of the council may be required to determine the rental and other essential terms of the tenancy agreement within statutory regulations.
Management of property – council as tenant
Council may enter into agreements to occupy commercial and publicly owned property.
Where council is a ‘tenant’ council will:
- Assess the opportunity using a business case approach and require a council resolution for any agreement for council to become a tenant of a property
- Allocate and budget for the necessary funds and costs based on the business case;
- The business case must detail the service and property options investigated leading to proposing a tenancy recommendation
- Ensure the property is in an appropriate location, fit for purpose and provides benefit to council and the community;
- Pay relevant rental fees and associated costs on time;
- Maintain current signed agreements on a Corporate Agreement Register and ensure all conditions of the agreement are met within documented timeframes;
- Require an appropriate agreement to be in place in the case of a sub-letting arrangement with a third party.
Acquisition of property
Council may acquire property through the Developer Contributions Plan (DCP) from a purchase, a property donation or transfer to Council, or a compulsory acquisition by council.
In acquiring any land or property, council will:
- Ensure the property is fit for purpose and provides value to council and the community
- When appropriate, seek contributions from developers in lieu of any proposed land contribution that is not of high quality, not in an appropriate location and or not fit for purpose. This alternative contribution must provide equitable value to the community in line with Asset Management Plan 2022, service levels detailed in specific Asset Management Plans 2022, the DCP, and the Open Space Strategy
- Incorporate and report on ongoing cost implications of the acquisition of any property (whole of life costs) into Council’s asset management portfolio (e.g., maintenance, renewals and upgrades)
- Aim to minimise ongoing cost implications
- Fund acquisitions from general funds, DCP, Capital Works Budget or property reserves. Officers will ensure that any amounts paid achieve the best value for council and the community.
Council may use the mechanism of placing a Public Acquisition Overlay onto a property. In doing so, council is required to follow the procedures set out in the Planning and Environment Act 1987. Any compensation arising from the imposition of the Public Acquisition Overlay is determined under the Land Acquisition and Compensation Act 1986.
Property may be acquired via the budget process or by seeking a council Resolution to approve the acquisition of any property, either by private negotiation, donation or compulsory acquisition. This resolution will be by means of a council Report, which will provide council with the information required to make an informed decision for the life of the asset.
Disposal of property
Council may determine that a particular property is surplus and no longer required to be held in its ownership or control based on a strategic and documented review of its asset portfolio.
The property in question will have been identified as one that has:
- Little or no current or expected future council use; or
- Little or no current or expected future community use; or
- Renewal, maintenance or upgrade costs exceed the value or property and / or its benefit to council or the community; and/or
- The building is no longer fit-for purpose and / or the costs associated with bringing the building to standard do not represent value to council and/or the community.
Surplus property assets will be offered for sale as per the Council policy PS-18 Asset Sales and Proceeds Disbursement policy. This policy sets out various terms and conditions for council asset sales including the disbursement of proceeds.
Where required, asset sales will comply with the Local Government Best Practice Guideline for the Sale, Exchange and Transfer of Land, June 2009.
A council Resolution will be required to approve the sale or disposal of any council owned property.
This Resolution will be by means of a council Report, which needs to provide council with the information required to make an informed decision.
Disposal pricing
A council property deemed to be surplus to council’s needs or to be transferred to a Community/User Group in order for them to acquire the freehold title, is to be sold having regard to the following guidelines:
Council property disposal terms
| Community group |
Negotiable - 25% market value |
At full market value |
| Government dept. or agency |
|
At full market value |
| Commercial entity |
|
At full market value |
| Other parties |
|
At full market value |
Any sale at a discounted value should include, at the council’s discretion, a guarantee that if the purchaser were to dissolve or cease to provide a service at the site, then council will have the first right of refusal to purchase the site back at the original sale price.
Council will ensure that decisions to sell or dispose of property are:
- made in the best long-term interests of council and the community
- retain public access where possible, and at all times
- comply with relevant legislation and regulations.
Revenue and reporting from sales and management of council’s properties
In respect to council, property rental charges are to be calculated in accordance with the following table:
Council property rental charges
| Community group |
No charge |
Negotiable
(up to 25% full market value of floor space occupied by commercial activity) |
| Government dept. or agency |
Negotiable (up to 50% full market value) |
|
| Commercial entity |
|
At full market value |
Activities classed as commercial include but are not limited to:
- gaming facilities
- fully licensed premises
- registered commercial food outlets (cafes and restaurants)
- registered accommodation
- other commercial / for profit activities.
Contributions
Operation
An annual operating grant is to be payable to eligible recreation user groups and public halls management committees under council’s Community Grant and Annual Contributions policy
Development improvement works
Community/User Groups at sporting, recreational or community sites are required to make a contribution towards any development or improvement works initiated in response to a group’s needs, in accordance with the following guidelines:
| Capital works including projects up to $30,000 |
50% of cost by way of community assistance fund.
|
| Capital works between $30,001 - $50,000 |
Submitted to council as a capital Works bid as part of annual budget process. Council to determine final funding ratio. |
| Major renewal and capital works over $50,001 - $100,000 |
Up to a maximum 50% of total project cost. Council to determine final funding ratio. |
Community / user groups are required to demonstrate that the local contribution has either been raised or is satisfactorily secured before any works are commenced unless council resolves to underwrite the funding shortfall so that works can commence.
Funds sourced by community / user groups from community grants, sponsors and philanthropic trusts or the like can be recognised as part or all of any required Local Contribution.
Development and improvement works for community / user groups are exempt from fees for Planning Permits. Building Permit Cost shall be borne by the relevant user group.
Development and improvement works for community / user groups up to $30,000 will be considered under the Community Assistance Fund program and works over $30,001 shall be subject to a specific Budget program allocation. It is to be noted that any council funding is subject to the annual Budget process and must not be assumed as being “as-of-right”.
Funds obtained by community / user groups from one council source cannot be used to meet or leverage against funds from another council source.
Any proceeds from the sale of related council assets are not be assumed in determining the Local Contribution and are not to be automatically offset or applied against a community contribution requirement. Refer PS-F-1 Asset Sales and Proceeds Disbursement Policy, Part 9 Disbursement of Sale Proceeds.
Insurance
Licence agreement parties have an option to be covered for public liability by an extension of the public liability policy of the council. This is subject to the condition that the facilities covered by the agreement are used solely for the purposes agreed to by council.
Building, fixtures and fittings for all council owned or controlled property are included in the council’s asset insurance policy cover.
Most of the recreational and social facilities including halls and other like community facilities) are located on council or Crown land with the majority of these operated by local management committees directly appointed by either council or the State. Where council is not a party to the ownership or management of these facilities, it may still contribute to their development based on the community benefit that is delivered and / or access to like facilities within the district.
Council can arrange to have Crown Land facilities insured under council’s policy at a significantly reduced rate. The proportionate costs of insurance will then be paid to council by the relevant committee through either a direct charge or a proportionate reduction in the Annual Operating Grant that the committee of management may receive from council.
Report on the proceeds from property sales and property management as part of council’s Annual Report.
Community governance and reporting requirements
Community Asset Committees and other community management committees play a significant and important role in supporting council with the management and use of council owned and managed community assets. These committees primarily comprise of committed volunteers who provide time and expertise to asset management and planning.
Council and community committees are facing increasing compliance and complexity of asset management and ongoing asset funding and investment demands. To improve asset planning, governance, auditing, risk management and reporting, under this Policy asset committees of management who operate under either a tenure agreement with council and / or who receive an annual asset contribution or grant from council are required to:
- Be either and incorporated association, DEECA appointed Committee of Management or a council appointed Community Asset Committees
- Provide copies of committee AGM minutes and treasurers reports to the relevant service manager
- Provide updated committee executive contact information following the AGM
- Provide a summary acquittal report for annual contributions or grants received from council
- Undertake council officer facilitated annual refresher training on governance and reporting requirements under tenure and asset management agreements with council
- Ensure that any works required or projects planned for council owned and managed assets are discussed and agreed with either the relevant service manager and / or council prior to any works commencing
- Utilise council’s online service request system for minor works and repairs so that these can be tracked and monitored.
These requirements are in addition to conditions under council’s Community Assistance Fund.
Council has obligations under the Gender Equality Act 2020. A gender impact assessment may be required when property management decisions could have a direct and significant impact on the community.
6. Relevant legislation / references
Council related policies:
- PS-07 Capital Projects on Council Owned or Controlled Lan
- Gov-27 Buildings and Contents Insurance – Halls and Recreation Reserves
- IE-18 Asset Sales and Proceeds Disbursement 2024
- IE-14 Property Leasing 2024
- Lease Operational Procedure 2024
- Procurement 2021
- Open Space Strategy 2020
- Asset Plan 2022
- Community Grants and Annual Contributions
External references:
- Local Government Act 2020 (Vic)
- Local Government (General) Regulations 2015 Victoria and any new regulations published
- Land Acquisition and Compensation Act 1986 (Vic)
- Subdivision Act 1988 (Vic)
- Land Act 1958 (Vic)
- Crown Land (Reserves) Act 1978 (Vic)
- Retail Leases Act 2003 (Vic)
- Retail Leases Regulations 2003
- Road Management Act 2004 (Vic)
- Residential Tenancies Act 1997 (Vic)
- Children’s Services Act 1998 (Vic)
- National Competition policy
- Charter of Human Rights and Responsibilities Act 2006 (Vic)
- Health Act 1958 (Vic)
- Planning and Environment Act 1987 (Vic)
- Marine and Coastal Act 2018 (Vic)
- Gender Equality Act (Vic) 2020
7. Gender impact assessment
A gender impact assessment was not undertaken for this policy
8. Human rights commitment
It is considered that this policy does not impact negatively on any rights identified in the Charter of Human Rights and Responsibilities Act (2006).
9. Policy owner
Manager Finance and Property
10. Document history
Version 001
New policy
Version 002
Date Endorsed 2020 Reason for Change – Council review cycle
Version 003
Date Endorsed 2024 Reason for Change – Council review cycle – Property Framework and Policies overview
It is recognised that, from time to time, circumstances may change leading to the need for minor administrative changes to this document. Where an update does not materially alter this document, such a change may be made administratively. Examples include a change to the name of a council department, a change to the name of a Federal or State Government department, and a minor update to legislation which does not have a material impact. However, any change or update which materially alters this document must be by resolution of council