ACT residential leaseholders have more secure title to their land than freeholders in some states. Their title is as least as secure as freehold in other states. For practical purposes ACT residential leasehold is perpetual.
The reason is that under ACT law residential lessees have a right to renewal. That is granted by the ACT Land (Planning and Environment) Act (s172). It is subject to the payment of an administrative fee which must not be more than the administrative cost. It is subject also to the lease having less than 30 years to run. It is also subject to the Commonwealth or Territory not needing the land for a public purpose.
The grant of the right to renewal is a property right. It cannot be taken away without payment of just terms or compensation. The guarantee of just compensation lies in the ACT Acquisition Act, the Federal Self-Government Act and perhaps the Federal Constitution.
Any move to change the automatic right of renewal granted in the Land (Planning and Environment) Act would offend the Federal Self-Government Act which prohibits legislation to acquire property except on just terms. The ACT Supreme Court could strike that down. It is almost as likely that the High Court (while it is in its pro-individual-rights mood) would also strike down the law as offensive to the Constitution.
Thus the impediments against preventing indefinite tenure are the ACT Assembly, the Federal Parliament, the ACT Supreme Court, the High Court and the Constitution itself. They may hate Canberrans out there, but they are unlikely to vote to change the Constitution to allow resumption of leases upon expiry.
In some states, there are no such guarantees. Property can be resumed and the compensation need not be “”just” … that is determined by a judge in the case of a dispute. In other states, state law requires just terms, but the state law can be repealed much more easily than all three of territory and federal law and the Constitution.
Once people are given a property right by statute as they have here with the right to renew, it cannot be taken away without full, just compensation. As far as tenure is concerned, Canberrans have better than freehold.
The only exception is where the Territory or the Commonwealth require the land for a public purpose.
It may be that some isolated cases might arise and the leaseholder would get compensation only for improvements under present law.
ACT shadow Attorney-General Terry Connolly says Labor would be happy to side with the Independents to change this, so there can be no resumptions for public purposes without full compensation.
Commercial leases are different. The Land (Planning and Environment) Act provides that the Minister can set a renewal fee … most recently at 10 per cent of value, though the Liberals promised to make it free. It means commercial lessees have no right of renewal because the Minister can set a renewal fee at 99.9 per cent of value.
For residential commercial leases, the significance of leasehold is not length of tenure, but that it provides a contract with individual land-holders to stop speculative hoarding and to stop changes of land use that give the land-owner an unearned windfall. Both of these can happen with freehold.