Sale or long term lease of land and buildings

Sale or long term lease of land and buildings

Last updated 22 November 2019
Last updated 22 November 2019

This page explains what tertiary education institutions (TEIs)  need to do before selling or leasing long-term land and buildings they own.

Secretary’s consent required

TEIs need the written consent of the Secretary for Education ("Secretary") before they sell any land and buildings they own, or any interests in land (such as easements) and buildings they own. The Secretary’s consent is also required if a TEI proposes to enter into a lease where the total term, including renewals, is more than 15 years.

These requirements are set out in Sections 192(4) and 192(5) of the Education Act 1989 ("the Act"). Their purpose is to allow the Crown to protect its interest in TEIs by exercising an oversight of activities that may expose a TEI, and in turn the Crown, to a financial or educational risk.

Under section 192(5) of the Act, the Minister of Education (“Minister”) may also set a threshold amount for disposal of assets that require the consent of the Secretary. This would allow tertiary education institutions to enter into transactions for the disposal of assets valued below the threshold amount without first obtaining the consent of the Secretary. Thresholds that will apply to the disposal of property assets (land and buildings) have been set by the Minister. See Property disposal thresholds for TEIs (PDF, 506 Kb).

Provisions don’t apply to land and buildings in Crown title

The above provisions don’t apply to land and buildings held in Crown title. TEIs can’t sell land and buildings in Crown title. 

For information on options available to TEIs for Crown-owned land and building assets they manage, see Crown asset transfer and disposal.

Applications for consent

TEIs wishing to:

  • sell land or buildings outside published thresholds, or
  • enter into a lease for longer than 15 years, or
  • part with any right or interest in land, such as a grant of easement,

should write to the Manager, Monitoring and Crown Ownership (MCO), TEC enclosing all relevant supporting documents.

Information required with your application

You should provide the following information about the asset and your TEI’s reasons for the disposal, as relevant to the consent being sought, either in the application or as attachments:

  • a description of the property (photographs can be helpful)
  • confirmation of ownership (including whether the property was transferred to the TEI from the Crown under the government’s TEI Crown asset transfer and disposal policy)
  • the rationale for the application, including the implications for the TEI’s campus master plan, long-term capital plan or strategic plan, for example
  • authority to act – evidence of the TEI council’s decision on the property’s future, including a description of the options the council considered
  • the value of the asset being sold and indicative costs of sale, or for leases and easements, the annual rental or payment
  • how the net proceeds of sale will be applied
  • if the property is currently being used for delivering educational or research programmes, what provision has been made to continue delivering those programmes
  • an outline of the sale process, including whether or not the provisions of the Public Works Act apply, and if they do, an assurance that the process required by that Act will be followed
  • any other information considered relevant or helpful
  • the date by which consent is needed.

For further information about what is needed for consent to sell, or enter into a long-term lease for, TEI-owned land and buildings, email camenquiries@tec.govt.nz.

Assessment of your application

MCO will assess your application and supporting documents provided before making any recommendation to the Secretary for Education to grant or decline the request under Section 192(4)(d) of the Education Act 1989 (the Act). Our assessment will focus on the educational and financial impacts, including financial viability and the ability of your TEI to fund replacement assets if required.  We will also check the assets are not being sold below market value (without good reason) and that the proceeds are being appropriately reinvested.

Once the Ministry of Education (MoE) receives MCO’s assessment and recommendation it will confirm legal ownership of the building, and will determine whether consent is to be provided.

Consents usually take one month

If you have provided all the necessary information with your application, a consent can generally be issued within a month of MCO receiving your request. A consent is required before you carry out the proposed sale and retrospective consents cannot be provided. If you need consent more urgently than one month, you should highlight that in your application.

Consents may include conditions

Through Section 192(7), the Secretary may impose conditions on any consents granted. For the sale of land and buildings the most likely conditions would relate to the sale value and the reinvestment of the net proceeds of sale. You must comply with the conditions and tell the Secretary when the transaction has been completed and how the proceeds, if any, have been dealt with.

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