Clarifying any confusion over what happens when a lease expires
Judging by the response to the Land Bank report in the Fiji Sun on Tuesday there is some confusion about what actually happens when a lease expires. Minister for Lands and Mineral Resources Jone Usamate had debunked the myths about the Land Bank in Parliament on Monday. It is evident that some politicians had either twisted or distorted the facts to suit their agenda by making outrageous claims that the Land Bank is engaged in a land grab scheme.
It is claimed that once iTaukei landowners shift their land from the iTaukei Land Trust Board to the Land Bank they lose control of their land.
This is not true. Questions have been asked by interested parties on the responsibilities of the lessor and the lessee when a lease expires.
The tenant has developed the land and built structures on it and as a result increased the value because of the assets.
Do the landowners get the land back with everything on it?
Mr Usamate has clarified this issue. Here’s the gist of what he says.
No, landowners don’t get the land back with all improvements. However, they may do so if the lessee breaches any lease conditions when the lease expires. Breach can be in the form of defaulted rental repayments or any other obligation contracted in the lease agreement.
Yes, the landowner may offer to pay the fair value of the building when the notice of removal is received from the lessee.
This is outlined under Annexure B of Landuse
Regulation -General Conditions 14.
Basically this is how the process goes:
i) The first preference is given to the lessee to remove the structural improvements within three months after the expiry of the lease;
ii) The lessee must give one month’s notice to the lessor(Land Owning Unit) of his intention to remove structural improvements.
iii) The lessor (LOU) may elect to purchase the fair value of the buildings comprised in the notice of removal.
iv) Any breach by the lessee of any leasing covenants/ conditions will entitle the lessor to take possession of the land.
This should clear the air on questions about whether the landowners would lose their land after the expiry of the lease.
The law as it stands protects both the tenants and the landowners. It is fair and transparent.