How Does Government Housing Land Reach the National Housing Corporation?

Part XI of the Land Act 1996 exists to move existing government houses into the public housing system and, from there, into private ownership. It is a self-contained pathway.

Section 111 — the declaration

Two elements limit it: the land must be improved — there must already be housing on it — and it must be residential. Part XI is not a route for allocating vacant land or commercial sites.

Section 112 — the machinery that does not apply

Sections 70, 71, 74, 75, 84 and 95 do not apply to land declared under section 111. That removes:

• section 70 — the requirement to apply in the approved form with the prescribed fee;
• section 71 — the rule that the Land Board shall hear all applications and recommend to the Minister;
• sections 74 and 75 — gazettal of the successful applicant, and the Letter of Grant with its 28-day Lease Acceptance Form;
• section 84 — the power to require a lessee to pay for improvements already on the land (Part XI has its own version); and
• section 95 — the requirement that land in a physical planning area be offered by tender first.

Land declared under Part XI is also, separately, exempt from advertisement: section 69(2)(j) covers a new lease granted under section 110, 130 or 131, and section 72(b) allows the Minister to grant a lease over land declared under section 111 without referring the matter to the Land Board.

Sections 113 to 115 — the grant and how it takes effect

• Section 113 — the Minister may grant a lease of Part XI land to the National Housing Corporation, on such conditions as he thinks proper.
• Section 118 (Part XI) — a lease under section 113 shall be granted for a period of 99 years. Not “not exceeding” 99 years, as elsewhere in Part X, but a fixed 99-year term.
• Section 114 — the Minister shall notify the grant by notice in the National Gazette, and shall then advise the Corporation in writing of the grant, the date of publication, and the terms, conditions, restrictions and covenants on which it is granted, including the amount payable for improvements under section 117.
• Section 115 — the grant takes effect from the date of publication, and the Corporation shall be deemed to have accepted and executed the lease on that date.

Section 117 — paying for the improvements

The Minister may, in addition to any other conditions imposed under section 114, require the Corporation to pay such amount in respect of the improvements on the land as he determines. And, unusually, interest is not payable on that amount.

Compare the ordinary position under sections 84 to 86, where a lessee required to pay for existing improvements may pay by instalments with interest at the prescribed rate, and must insure the improvements in the joint names of the State and the lessee until the amount is paid. Part XI sets that aside for the Corporation.

Section 116 — rent relief while the house is being sold on

Both departures are deliberate. Ordinarily, remission of rent under section 83(5) requires an application by the lessee and a Land Board report. Here the Minister may act on his own motion and without the Board, so that rent does not accumulate against the Corporation while a house sits in the pipeline waiting for a buyer to sign.

Note the endpoint: the relief runs until the transferee executes the contract, transfer and mortgage instruments — that is, until the house has an incoming owner committed to it.

Why this matters if you are buying from the Corporation

1. The Corporation holds a State lease, not freehold. What you acquire on transfer is the balance of that 99-year term, subject to its conditions.
2. The transfer is a dealing and requires approval under Part XVII, and registration under the Land Registration Act.
3. Check the conditions the Minister imposed under section 114 — they are specific to the grant and are not in the Act.
4. Check the rent position. Section 116 relief ends when you execute the instruments; from then the ordinary section 83 regime applies, including the ten-yearly re-assessment of unimproved value.
5. Get a title search and confirm what encumbrances and covenants are on the register before you sign.