Disposal

  1. The LAA also provides the legal basis for the disposal of an interest in land by Commonwealth entities (see section 119). Disposals under the LAA are supported by the Commonwealth Property Disposal Policy CPDP which assists entities to discharge the obligation in the PGPA Act to manage the land it holds efficiently, effectively, economically and ethically.
  2. The CPDP and CPMF detail further information and requirements for Commonwealth property disposals and the use of the Clearing House mechanism. Entities should refer to both the CPDP and CPMF in all property disposals.
  3. Negotiations for an off-market disposal that might give rise to commercial obligations should not be entered into with parties until Finance and the Finance Minister (if applicable) have been consulted and approved the disposal (see CPDP). Entities should also refer to the section on Obligations when interacting with external parties on Lands Acquisition Framework Overview to inform appropriate interactions with the public. Please contact laa@finance.gov.au to discuss off-market disposals.

 

Disposal strategy

  1. While there is no statutory requirement under the LAA for a disposal strategy to be developed, it is good practice. A disposal strategy should set out the business case for the entity to undertake a disposal and inform an entity’s decision-makers on key considerations under relevant frameworks, as well as providing a clear understanding of the disposal pathway.
  2. This includes ensuring compliance with the CPMF, CPDP, the CPRs and the PGPA Act and any other relevant legislation or policy (including policy considerations regarding the use of land in native title agreement making). Entities are encouraged to obtain legal and other specialist advice where required to inform the strategy and support the transaction.
  3. Entities should obtain an independent valuation of the land (including determining the appropriate method to procure independent and credible valuation services). In procuring valuation services, entities are required to ensure that the transaction will deliver value for money, and consider how the entity will engage with the potential purchaser and how any potential conflicts of interests will be dealt with.
  4. The level of detail contained in a strategy will vary depending on the nature and complexity of the disposal.
  5. A disposal strategy should be expected to include at a minimum:
    1. details of the site (such as location, history etc.) and details of prior Commonwealth use of the site and any notable site conditions;
    2. why the site is considered surplus to the acquiring authority’s and the Commonwealth’s requirements, having regard to the CPMF and the CPDP;
    3. the timeframe for disposal, including key activities to be undertaken;
    4. due diligence that has been conducted or is to be conducted, including identification of key stakeholders;
    5. the type of disposal (e.g. on-market or off-market sale, at full market value or concessional price, etc) and reasons for this;
    6. how the disposal has been/will be authorised (e.g by Cabinet, portfolio Minister, Finance Minister (for off-market sales), official within the acquiring authority);
    7.  an assessment of risks; and
    8. treatment of disposal proceeds and why disposal is considered a proper use of resources.
  6. Once a disposal transaction is complete, entities must:
    1. report to Finance (via laa@finance.gov.au) any LAA powers that have been exercised under delegation (see the section titled Reporting to Finance on Reporting); and
    2. update the Australian Government Property Register (see Reporting).

 


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