What sort of property does the policy cover?

Mitchell Shire Council manages a substantial property portfolio for the benefit of the community. Properties include both commercial and community buildings and land.

Many of these these properties are made available to community groups, service providers, sporting bodies, private residents or commercial operators through occupancy agreements covering leasing and licensing.

These are formal agreements between Council and tenants to:

  • ensure properties are used for community benefit
  • that there is appropriate stewardship of the property
  • that legal, insurance and risk management responsibilities are shared

We've received requests from some tenants to update occupancy agreements or to create new agreements. We also need to make sure everyone who uses our facilities has up-to-date agreements in place. To ensure groups are treated consistently, a draft policy has been developed to help guide agreements.

The policy aims to provide for fair, equitable and transparent decisions and processes so that the community and tenants have a clear understanding of how property is allocated by Council and managed by tenants.


What property does the policy cover?

Mitchell Shire Council manages a substantial property portfolio for the benefit of the community. Properties include both commercial and community buildings and land.

Council recognises the role that community organisations play in providing an overall social benefit to the Shire through the delivery of a range of educational, cultural, community, recreational, and sporting activities and programs.

Council provides land and/or facilities at a subsidised rental to community groups to assist them with their endeavours and Council may also assist with the maintenance and costs associated with their occupation of Council community facilities.

Council also leases land and buildings to organisations to operate government or commercial services and these leases are established through commercial contracts.

Most properties are directly owned by Council; however, some facilities are located on Crown land and managed by Council on behalf of the Crown, and some facilities are owned by tenants but are situated on Council land.



Why is a policy needed?

Council does not have an existing Property Leasing and Licensing Policy. 

A policy will help Council staff to secure occupancy agreements with tenants of Council property. It will also help to ensure occupancy agreements are managed consistently and fairly. 

The draft policy clarifies compliance requirements. It also defines the roles and responsibilities of Council as landlord and community groups as tenants and seeks to maximise the use of properties to accommodate more community services.

Setting out landlord and tenant requirements through this policy in the first instance, followed by negotiated formal agreements, will establish the consistency of practice required to manage a large number of tenancies across a diverse property portfolio. 

Established occupancy agreements give Council and Tenant the necessary assurance to maximise the use of buildings and to plan and develop better facilities for local community services for the future. 

What are the key principles of the policy?

The draft policy sets out some key objectives to help support better management practices by Council and improved compliance by tenants.
  • to ensure a consistent, equitable and transparent process in relation to leasing and licensing of Council Property.
  • to optimise the use of Council Property by providing facilities that encourage higher usage rates, support multi-use and co-location of Tenants and increase community access to activities, programs and services from Council Property.
  • to provide guiding principles that will assist in the responsible management, occupation and use of Council Property by Tenants.
  • to ensure consistency with Council’s principles under the Council Plan and related strategies including promoting diversity, appropriate levels of service, multiple use, accessibility, sustainability and inclusion.
  • to foster a partnership approach between Council and tenants to facility management and maintenance in which Tenants contribute towards the responsibility and cost of occupying Council Property alongside Council.

What does the policy cover?

•Tenants use of the premises to comply with ethical behavior and sound principles of inclusiveness
•Restrictions on maximum terms for leases and licenses
•Defining rental payments based on Tenants capacity to pay and their ability to generate their own income
•Responsibility for property utility services
•Tenants requirements to be, and remain, insured.
•Process for acquiring liquor permits
•Rules relating to sub-letting or changing the original terms of agreement
•Rules relating to third party hire of premises
•Hours of use of premises
•Reporting to Council against key performance indicators
•Roles and responsibilities of Council and Tenant to provide Emergency, Risk and Occupational Health and Safety
•Roles and responsibilities for maintenance and capital works
•When and how an occupancy agreement will be terminated
•Processes for dispute resolution

Does this affect FASA agreements?

While the policy will apply to some properties who have a Funding and Services Agreement, the draft policy does not specify the cost structure for the use of Council property. 

The policy focuses on establishing terms and conditions of use of Council property. 

The occupancy agreement process is separate to any financial support that may subsequently be provided to tenants of Council properties.

Will this generate more income for Council?

Income generation is not the driver for community use facilities.

Community groups will be provided subsidised rental terms. Council will take into consideration its obligations under the National Competition Policy when determining subsidised rental fees for community Tenants. 

Committees of Management and other user groups with occupancy agreements will still receive financial support through annual FASAs. The two processes of providing occupancy agreements and providing funding agreements are separate and will remain this way. 

What legislation has Council considered when drafting the policy?

The leasing and licensing of property is strictly regulated through several Government Acts including:
  • Retail Leases Act 2003 (Vic)
  • Local Government Act 1989 Vic.
  • Crown Land (Reserves) Act 1978
  • Charter of Human Rights and Responsibilities Act 2006
  • Planning and Environment Act 1987
  • Heritage Act 1995
  • Occupational Health and Safety Act 2004
  • Building Act 1993
  • Health Act 1958
  • Aboriginal Heritage Act 2006
  • Liquor Control Reform Act 1998
  • A New Tax System Act 1999
  • Child Wellbeing and Safety Act 2005
  • Gambling Legislation Amendment Act 2018
  • Transfer of Land Act 1958
  • Property Law Act 1958
  • Residential Tenancies Act 1997
  • Australian Consumer Law and Fair Trading Act 2012

How will Council know if the terms of agreements are being met?

Council will conduct annual property inspections of each facility.

Inspections will look at:

  • the condition of facilities;
  • note the ‘fit for purpose’ of the building for the services being provided;
  • determine that adequate maintenance is being carried out;
  • sight current insurance documentation; and 
  • ensure that Essential Safety Measures (ESM) and other Occupational Health and Safety (OHS) matters are being appropriately managed. 

My club, group or organisation leases property through a Committee of Management. Does this affect me?

Council will be in touch with groups, committees and organisations that we have identified as being likely to need an occupancy agreement. 

We welcome input from other groups, committees and organisations as this may also be of interest for future occupancy agreements.

It may also affect arrangements that committees have with people who use the facilities they manage on Council and the community's behalf. 

My group or organisation has a building on Council land. Does this policy apply to me?

Yes. 

The policy is hard to understand. Is there a simpler version available?

Leases and licences are ‘standard governance’ for councils and community groups elsewhere. They are also required by our insurers. They need to be legally sustainable so need to be written using some legal language.

The policy is designed to help Council officers apply consistent principles to occupancy agreements. This also means there are parts that need to be technical. 

If you think anything in the policy is unclear, please include this in your feedback. If you would like to clarify or check any information in regards to your circumstances, please contact our property team on 5734 6200 to discuss further.