Head leases over Crown title assets
Once TEC has received an application to transfer assets into a TEI’s legal ownership, it contacts the Office of Treaty Settlements and Te Puni Kōkiri to ascertain the status of Treaty of Waitangi settlements in the area. If the assets are in an area where Treaty of Waitangi claims have not been settled, or are in the process of settlement, TEC will contact the TEI and advise it of the likely implications for its application. The TEI will then be given an opportunity to:
- Place its application on hold indefinitely until Treaty claims in the area have been settled.
- Proceed with the application in full in which case the Minister may agree for a head lease to be issued to the TEI over the assets in question.
- Proceed with an amended application which includes some or all of the assets previously included in the asset transfer application.
TEIs may also request head-leases in other situations where obtaining ownership or disposing of Crown assets is not desirable for timing or other reasons.
A head lease, which will be granted for a nominal rental, sets out the rights and responsibilities of the Crown and the TEI with respect to the asset. It allows a TEI to sub-let an asset for the purposes of a joint venture with a third party (subject to the TEI gaining any necessary approval under section 192(4)(c) of the Education Act 1989), provided that this joint venture supports the TEI’s educational provision and is financially viable. It will also allow the TEI to borrow against the asset (subject to commercial lenders’ criteria and to the Secretary for Education’s approval under section 192 (4)(d) of the Education Act 1989).
TEIs should contact their investment managers for more information regarding head leases. Otherwise general queries can be sent to firstname.lastname@example.org
11 April 2011
23 July 2015