Australia: Doing Business in Australia - Real Property and Liquor Licensing

Last Updated: 1 May 2012
Article by Tony Holland

LAND LAW

The basic principles

Australian land law was originally based on British land law, but has been significantly modified over time, principally by the adoption of the Torrens system for the registration of titles on a central registry and also through the passage of legislation dealing with specific land and general law issues.

Each Australian state and territory has its own version of the Torrens system and its own specific legislation so that practices vary between the different Australian jurisdictions.

All land titles originate from the Crown which, through the government, then grants or sells the land. "Fee simple" ownership, the most complete private title to land, gives the owner the right to always occupy and possess the land, and to sell, lease and mortgage it to any third party - generally without interference from the government.

The Crown may also grant leases or licences of land. Large areas of the more remote parts of Australia have been granted by way of "pastoral leases". Although described as leases, in many cases they are grazing licences, giving only the right to graze sheep and cattle and carry out ancillary or incidental works.

Title registration system

The Torrens system is a land title registration system with a central registry, which is searchable. A genuine purchaser of land from the registered owner of the land is guaranteed good title to the land by the government, even if the former owner became registered through fraud or mistake.

All easements, covenants and other restrictions on the land, as well as mortgages and (in most states) leases must generally be registered to be enforceable at law against a purchaser. The title registration system therefore provides purchasers of land with a high level of certainty, both as to ownership and as to any encumbrances or restrictions on the land.

There are still small remnants of land in some states that are not included in the title registration system (known as General Law Land), but they are gradually being brought under the operation of the registration system.

Security of title

Once title has been granted by the Crown, whether it is fee simple, lease, pastoral or otherwise, the Crown cannot reacquire that land:

  • Unless it is for a "public purpose" or similar purpose
  • Just compensation is paid for the acquisition.

Leases and licenses

Australian law recognises the British distinction between leases, granting exclusive possession of land; and licences, granting only a contractual right to occupy land in common with others. Commercial leases and licences are largely unregulated and their duration can vary widely, from as short as an hour to as long as 399 years.

Most Australian states and territories have standard form lease documents provided by the local law society or real estate institute that can be used in simple transactions, however the terms of leases otherwise vary widely and may fit onto a single page or require more than 100.

Specific types of leasing such as retail or shop leases and residential leases are heavily regulated with specific legislation in each Australian state and territory imposing similar laws, but with local variations.

Leases in most Australian states and territories of longer than three years must generally be registered on the certificate of title under the title registration system in order to be enforceable against the landlord. Registered leases can be searched and a copy obtained.

Retail leasing

Retail leasing is an area that has been heavily regulated in Australia to deal with the perceived inequality of bargaining power between retail tenants and major shopping centre operators. However, in practice the legislation also covers small landowners leasing to large and small tenants, subject to some exceptions, and in some states covers retail services businesses, such as solicitors and accountants.

As the legislation in this area is regularly reformed, we also produce a guide to retail leasing, which is available on request.

Planning laws

There are state- and territory-based planning laws that restrict and control the use, development and subdivision of land. The planning law may provide for any use, development or subdivision to be "as of right" (no further permission required), subject to permission (which may be discretionary or subject to certain mandatory requirements, or both) or in some states, absolutely prohibited. There are generally appeal rights where the proposed use, development or subdivision is at the discretion of a planning authority. If a use, development or subdivision is prohibited under the planning law, it can only lawfully proceed if the planning law is changed.

Environmental regulation

Protection of the environment is a major priority in Australia, and environmental issues receive a great deal of media and public attention. Australia has had a strict system of federal and state environmental regulations prohibiting the discharge of pollution and waste to air, water or soil. Recently, an improved range of regulatory mechanisms involving more flexibility have allowed for a spirit of cooperation between business and government. There are increased opportunities for industry to interact directly with government authorities to plan targets for waste control and disposal.

Each state has its own environmental legislation and administration, and its own regime for town planning, control of pollution, clearing vegetation and the use and extraction of water. In most states, the body with responsibility for environmental administration is known as the Environment Protection Authority. There are some environmental issues, for example water, where a coordinated national approach to ecologically sustainable development has been undertaken by all tiers of government.

See also the Environment & Climate Change chapter.

Transaction and other taxes

The acquisition of properties in Australia is ordinarily subject to stamp duty based on the value of the property being acquired. This can be as high as 5.5%-7%, depending on the type of property, its value and location, as each state and territory has its own rate of stamp duty.

Most land owners are assessed to land tax annually, generally assessed on the unencumbered value of the land, ie without improvements. The rates of land tax also vary from state to state and reach 2.25%.

Native title

In 1992, in a decision of the High Court known as the Mabo decision, Aboriginal and Torres Strait Islander indigenous laws and customs in relation to land were legally recognised as forming part of the law of Australia. Those indigenous land laws are recognised if:

  • There is maintenance of traditional rights and custom in respect of the land
  • The traditional owners can demonstrate that they are the legitimate successors to the land
  • There has been no clear and unambiguous act of government to extinguish or impair native title, for example by the grant of a fee simple title, pastoral lease or mining licence.

To avoid uncertainty in relation to title, the Native Title Act 1993 (Cth) validated all freehold grants of title and most Crown leases in existence on 1 January 1994 to the extent they would otherwise be invalid because of the prior rights of native title holders. The legislation also extinguished native title where there had been grants of fee simple and in relation to most leasehold interests.

Native title is not an issue in respect of most urban land, but it is a factor to consider in relation to land that is sold or leased by the Crown after 1 January 1994.

Heritage

Federal, state and territory legislation can protect designated areas, buildings and objects from development, destruction or removal. The heritage controls are sometimes given effect in planning laws, or they may also run parallel with them.

Protection of Aboriginal culture

Specific legislation protects places and objects of cultural significance to Aboriginal and Torres Strait Islander people. It may be necessary to investigate whether legislation of this sort is applicable where developments concerning land are proposed, particularly in areas where there may be a strong Aboriginal or Torres Strait Islander community. The legislation provides for a variety of mechanisms ranging from complete protection from development by declaration (usually by a government minister), as well as lesser forms of protection (for example, consultation and management strategies).

LIQUOR LICENSING

Background

Liquor licensing in Australia is governed by various state and territory legislative enactments. Responsibility for the enactments is held by the various state liquor licensing courts, commissions or authorities. Many of the states have had liquor licensing legislation reviews and amendments in recent years.

The variety of licensed businesses is reflected by numerous types of liquor licences available in Australia. The requirements for transfer of licences vary from state to state, as do the hours of operation and standard conditions endorsed on a licence.

Application

Generally, a licence is obtained by making a formal application to the state licensing authority, commission or court. In most states, a significant volume of supporting documentation must be lodged with the application, including planning approval, plans of the premises, registration by the local health department and evidence of the good character of the applicant or directors of the applicant company.

© DLA Piper

This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not used as, a substitute for taking legal advice in any specific situation. DLA Piper Australia will accept no responsibility for any actions taken or not taken on the basis of this publication.


DLA Piper Australia is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. For further information, please refer to www.dlapiper.com

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