This article looks at issues concerning the alienation of Maori land and contains information which should be of interest to all owners of Maori land or interests in Maori land who are considering alienating their land, by way of sale, lease, license, mortgage or charge.
The Maori Land Act 1993 provides that no interest in Maori freehold land may be alienated other than in accordance with the Act.
An alienation is defined under the Act as including:
- Every form of disposition of Maori land.
- Leases, licences, easements, profits, mortgages, charges, encumbrances and the making of a trust over or in respect of Maori land.
- A contract or arrangement to dispose of Maori land or an interest in Maori land.
- A transfer or variation of a lease or licence – or the variation of the terms of any other disposition of Maori land.
- A deed of family arrangement relating to succession to Maori land or any interest in it on the death of an owner.
- An agreement to the taking of Maori land under the Public Works Act.
- Any disposition of land affected by the Maori Trustee.
Excluded from the definitions are the following:
- Dispositions by will of Maori land.
- Any alienation effected by an order of the Maori Land Court.
- A surrender of lease, a grant of a lease or licence for a term of not more than 3 years or a variation of lease (so long as it does not extend the term by more than 3 years).
- A disposition by way of sale by a Mortgagee expressed or implied in any instrument of mortgage.
It is important to note that the restrictions on alienations relate to Maori freehold land and not alienations of general land.
Restrictions to Alienation
The right to alienate Maori freehold land is not absolute and there are certain restrictions.
The Act provides that a right of first refusal must be given to persons who belong to the preferred class of alienee, ahead of those who do not belong to any of those classes.
Preferred class of alienee is defined in the Act as meaning:
- Children and Remoter issue of the alienating owner.
- Whanaunga of the alienating owner who are associated in accordance with tikanga Maori with the land.
- Beneficial owners, who are members of the hapu associated with the land and descendants of any such owner.
- Trustees for owners or children.
In practice where an owner wishes to sell land to a person outside the preferred class, the Court will not confirm that alienation unless the right of first refusal is given to a member of the preferred class.
The Maori Land Court Rules sets out provisions for notifying the preferred class. In the event that a member of the preferred class is able to pay the purchase price, then the land will be sold to that person.
Regulations under the Act make provision for notification to the preferred class who may wish to exercise a right of first refusal by way of public notice in the newspaper. In the event that the member of the preferred class can meet the purchase price, then the land will be sold to the member of the preferred class.
The restrictions referred to above do not apply to any alienation by way of lease affected by a Maori incorporation for less than 21 years or by the Trustees of a trust holding land constituted under the Act (provided it is permitted by the trust order) or to any alienation by way of Mortgagee sale.
Under the Act the owner of an undivided interest in any Maori freehold land may alienate that interest only to a person who belongs to one or more of the preferred classes of alienee.
As such an undivided interest in Maori freehold land cannot be sold on the open market.
Alienation of any interest in Maori freehold land must be approved by the Maori Land Court within prescribed time limits.
Under the Act the Maori Land Court must not grant confirmation unless it is satisfied that certain matters listed in this section have been complied with. The restrictions relate to formalities of process and with matters such as breach of trust and adequacy of consideration.
Some alienations do not need confirmation by the Court, but need to be confirmed by the Registrar by the issuing of a certificate (i.e. confirmation of mortgages, variation of mortgages, renewal or assignment of a lease). Some alienations simply require noting by the Registrar. These include a lease or mortgage entered into by the Trustees of an Ahu Whenua Trust.
It is important that any person wishing to alienate Maori freehold land or an interest in Maori freehold land, obtain appropriate advice to ensure that the provisions of the Maori Land Act 1993 are complied with.