Rising Tide at Sunset

The Credit Crunch

- the Cause and the Cure - 4

by Bob Keall

4 - Land Ownership or Owership?

The Estate in Fee Simple title granted by the Crown, under which land is held not owned, by definition implies an obligation. Fee is a derivative of fief or trust originally granted by the King to certain Barons in return for services to be rendered in time of battle, on demand, or on state occasions—an acknowledgement of the trust.

About the time of Runnymede (1215) the Barons not only curtailed the King's tyrannical rule without trial but at the same time entrenched their privilege by satisfying their obligations in other ways e.g. a beer tax amd other levies on the poor. Later came the enclosures (privatisation) of the Common lands.

This privilege that the Barons arrogated to themselves has become entrenched and fragmented over the centuries. Today it is bought and sold as the freehold title i.e. the right to claim the economic rent, with income and other taxes in lieu, progressively enshrined in statute.

So the estate in fee simple is essentially a holding in trust, without specified obligations, conditions or terms i.e. an open ended leasehold which can be inherited without constraint. This basic status readily admits the inclusion of more stringent terms such as Town Planning ordinances, environmental regulations and the like, as terms of the lease which recognise and give effect to the fundamental social relationship—the Crown and the subject; the community and the individual; landlord and the life-tenant. A lease also sets out the rights of the lessee i.e. the rights and responsibilities of both parties.

Misperception about leasehold tenure arises because it is comparatively uncommon and is enjoyed without fuss wherever it is in place. Substantial parts of Masterton and Greytown are leased by Trust Lands Trusts with singular acceptance, even modest pride. Many Local Bodies and Central Government have inherited harbour reclamations, Hospital and Education Board leases etc regulated by the "Public Bodies Leases Act".

The Act is brief and usually only in the news because the 21 year rent reviews are an anachronism under the impact of inflation—mainly caused by freehold land price! The same remarks apply to the endowment Melanesian Mission leases of the Anglican Church on the most valuable residential sites in NZ.

Likewise the big transport rigs worth millions are leased by operators. Smart developers prefer Council leasehold land because they can then invest more capital in the building. Leasehold tenure ensures security for the private operation, and for the community's interest in the enduring ownership of its natural resources and natural monopolies.

Continued: ...
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