Tēnei te ture muru kua heke ki au

A tangled thicket of law will make the going tough as Parininihi ki Waitōtara continues in its work to clear a path to an improved Māori Reserved Lands Act.

The Māori Reserved Lands Amendment Act 1997 tightly governs the 20,000 hectares of corpus whenua owned by Shareholders that were leased in perpetuity to farmers through the passing of the West Coast Settlement Reserves Act in the 1880s.

At the heart of the Act are the perpetual leases, each of which can be renewed every 21 years at the Lessee’s option.

Parininihi ki Waitōtara Te Rau Whakahono Pito / General Manager Property Richard Buttimore says perpetual leases continue to deny owners any form of active control over their whenua.

“At the end of the 21-year lease term, the owner of the leasehold interest has the right to another 21 years; we cannot decline the right, we cannot argue the right, we cannot seek a right to obtain the leasehold interest through this renewal process.”

Parininihi ki Waitōtara continues to look into the Act governing the perpetual leases and what changes could be sought for the betterment of the business and its shareholders.

The most recent amendment to the Māori Reserved Land Act 1955 came into effect in 1998, after years of lobbying and petitioning by the Owners Action Group.

The amendment didn’t change the nature of perpetual leases, but it did go some way to address the inequities of the Act.

It gave Māori incorporations a first right of refusal if a lessee wants to sell their leasehold interest, with have 20 working days to decide whether or not to acquire the leasehold at market value and so regain control over the whenua.

Rent review periods were shortened, with rental for the unimproved land set to market rates every seven years instead of every 21 years as previously.

But Richard says the rent review process can be a fraught one because of the complex method used to set the ‘fair annual rental’ over the unimproved land.

“We own the underlying land, but the lessee owns all the improvements on and to the land, from buildings and fences right down to the clearing of the original land cover, the drainage, and the soil fertility.”

“So we’re trying to do a subjective valuation of the land in its unimproved state, back in the late 1800s, based on its original land cover. The more time goes on the harder it becomes.”

Changes in other laws and regulations have made setting rents yet more complex. New laws bring new challenges for an aging piece of legislation that have the potential to impact corpus whenua rental returns.

Richard believes a simpler way to set the rents is an immediate goal.

PKW has identified some alternative options and is ‘doing a deep dive’ on these to better understand the pros and cons of each, and how they might be approached.

Richard says that the Owners Action Group in the 1980s and 90s sought the end of the perpetual lease regime at a set point in time, but this was not accepted by the government of the day.

“This is still the intergenerational goal, to have ownership and control over all our whenua tupuna. The question is, what is the realistic horizon we should be setting for ourselves?”