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26/11/2024

Disposal

The Lands Acquisition Act 1989 (LAA) also provides the legal basis for the disposal of an interest in land by Commonwealth entities. 

Disposals of land under the LAA are supported by the Commonwealth Property Disposal Policy (CPDP) which assists entities to discharge the obligation in the Public Governance, Performance and Accountability Act 2013 (PGPA Act) to manage the land it holds efficiently, effectively, economically and ethically. A 'Guide to Property Disposals' is also available under Tools and Templates on that page.

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. 

Negotiations for an off-market disposal that might give rise to commercial obligations should not be entered into with parties until Finance has been consulted and the Finance Minister (if applicable) has approved the disposal.
Entities should also refer to the section on Obligations when interacting with external parties to inform appropriate interactions with the public. Please contact LAA@finance.gov.au to discuss off-market disposals.

Disposal strategy

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 decision-makers of key considerations under relevant frameworks, and clearly outline the disposal pathway.

This includes ensuring compliance with:

  • the CPMF
  • CPDP
  • the CPRs
  • the PGPA Act

Entities are encouraged to obtain legal and other specialist advice where required to inform the strategy and support the transaction. 

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 factors to consider regarding the potential purchaser (see Choosing a valuer, Procurement considerations and Probity considerations).


Strategy details

The level of detail contained in a strategy will vary depending on the nature and complexity of the disposal. A disposal strategy should be expected to include at a minimum:

  • details of the site (such as location, history etc.) and details of prior Commonwealth use of the site and any notable site conditions; 
  • why the site is considered surplus to the acquiring authority’s and the Commonwealth’s requirements, having regard to the CPMF and the CPDP;
  • the timeframe for disposal, including key activities to be undertaken;
  • due diligence that has been conducted or is to be conducted, including identification of key stakeholders;
  • the type of disposal (for example, on-market or off-market sale, at full market value or concessional price, etc.) and reasons for this; 
  • how the disposal has been/will be authorised (for example, by Cabinet, portfolio Minister, Finance Minister (for off-market sales), official within the acquiring authority);
  • an assessment of risks; and
  • treatment of disposal proceeds and why disposal is considered a proper use of resources.
Once a disposal transaction is complete, entities must record the transaction in their LAA delegation register and update the Australian Government Property Register.

 

-- Explore more of RMG-501 --

Go to Lands Acquisition Framework (RMG 501)
Go to Introduction
Go to Acquisition
Go to Valuation
Go to Compensation and other payments
Disposals
Go to Reporting

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