What can you do with your spare titles on your farm?

Mackay Regional Council has a Tradeable Development Rights Policy (“TDR Policy”) which has been in place for a number of years.

For those who haven’t heard about the policy before, it is designed to provide an opportunity to owners of agricultural land to amalgamate their titles (i.e., converting two smaller lots into one larger lot), whilst receiving a financial benefit from this by selling their extra ‘Title Right’ to other landholders who are eligible to subdivide their land (convert a larger lot into two smaller lots) in areas where development may be acceptable.

The “TDR policy” applies to land in the:

  • Rural zone, and

  • Agricultural land overlay

 The policy does not apply to land in any other zones. It only applies to land in the Rural zone.

 You can find out what zone your land is in by looking at your latest rates notice or looking up your property through the Mackay Regional Council MiMaps system and clicking on the planning reports.

POLICY ELIGIBILITY

Sending Lots (lots within the agricultural land overlay to be amalgamated):

  • Are in the Rural zone and agricultural land overlay;

  • The original size is capable of siting a house;

  • When amalgamated, it will improve the utility and productivity of the agricultural land;

  • Once amalgamated, it will not have a combined area exceeding 160 ha, and

  • The lots once amalgamated, will not straddle a road.

Receiving Lots (lots within the Rural zone that can be developed and subdivided):

  • The lot is located in or adjoining a rural lifestyle node;

  • It reflects requirements for rural residential development;

  • The lots once subdivided, each have direct frontage and access to a public road;

  • The lots once subdivided, must not:

    • Significantly expand an existing rural lifestyle node;

    • Establish a new rural lifestyle node;

    • Compromise utility and productivity of agricultural land, or

    • Be located on constrained land.

WHO DO YOU NEED TO ASSIST YOU?

Once you receive confirmation from Council that you are eligible under the TDR Policy, and you have found a Buyer, the first step is for the Buyer and Seller to engage their own lawyers to negotiate the terms of the transfer of the Title Right.

Most often, the Buyer’s lawyer will prepare a Contract for the purchase of the Title Right and submit it to the Seller’s lawyer for approval.

The parties will need to come to an agreement in the Contract on who is going to pay for:

  • the lawyers - i.e., will each party pay their own legal costs, or will the Buyer pay for the Seller’s legal costs?

  • the surveyor - i.e., will the Buyer pay the surveyor’s costs to prepare the plans for the amalgamation and subdivision of lots?

  • the Council’s consent fees;

  • any Mortgagee’s consent fees or other interested party’s fees (if relevant);

  • the Transfer Duty costs payable to the Queensland Revenue Office (often paid by the Buyer, though this needs to be specified in the Contract), and lastly,

  • the Registration fees payable to the Titles Office for lodgement of the Plans.

The parties will then engage a Surveyor/Town Planner to prepare the new Plans for the lots being amalgamated (sending lots) and the lots being subdivided (receiving lots).

If either the sending lots or receiving lots have mortgages (or leases) registered over them, then the mortgagee’s consent (or lessee’s consent) is required to be obtained and submitted with the Titles Office. The solicitors prepare and obtain these.

Once the Surveyor has prepared the new Plans, they then provide these to the parties’ lawyers, who then lodge them with the necessary consents with the Titles Office.

TIP: We recommend that as part of the Contract terms, prior to the sending lot Plan being lodged with the Titles Office, the purchase price is paid by the Buyer into the Seller’s solicitors trust account to be held in trust, pending registration of the new Plans. This ensures the Seller gets paid, especially considering the amalgamated plan can’t be unregistered if the Buyer then defaults under the Contract and doesn’t pay the price as required.

Once the new titles have issued for the new lots, the purchase price is released from the solicitor’s trust account and paid to the Seller to finalise the matter.

WHERE TO GET FURTHER INFORMATION

 You can contact Council’s planning advice team to answer general questions about the TDR policy related development proposals. Planning advice enquiries can be lodged online, in person or by phone.

Council’s phone number is 1300 622 529.

You can also attend at Council for a ‘pre-lodgement meeting’ to obtain advice about more complicated development applications. You can submit a request for a pre-lodgement meeting by downloading the form from their website and emailing it to development.services@mackay.qld.gov.au

Alternatively, you can engage a local town planner to provide you advice on whether your land may be eligible for the TDR Policy.

At Statewide Legal Practice, we regularly assist Sellers and Buyers with the sale and purchase of Title Rights. Contact us if you require assistance.

 

The content of this article is intended to provide a general guide to the subject matter. Specific advice should be sought about your particular circumstances.

Commercial LawFiona Hollingworth