Under the Te Ture Whenua Maori Act 1993, it is possible for the Māori Land Court to change the status of land from Māori freehold land to General freehold land.  However, a recent Māori Land Court case confirms that achieving a change in status to General freehold land is not straight forward and that the Court will only exercise its discretion where there are extraordinary circumstances.

Two-step test

In this case, the Māori land owner wished to convert his property to General land and then sell it to a private buyer.

The owner’s deteriorating health, compromising his ability to manage the land and wishing to establish some financial stability, motivated him to sell. The Judge, satisfied that the seller met all the administrative requirements, assessed the seller’s application against a two-step test found in the Act.

First, would the land be managed or utilised more effectively under a General title? And second, if so, should the Court exercise its discretion to change the land’s status?

When considering whether the landowner met the first part of the test, the Judge referred to a previous rejection of his application and found that his circumstances had significantly changed since then. He pointed out that:

·         Previously, there was no prospective sale and purchase agreement hampered by the land’s status as Māori land. There was now an interested buyer, who would only be provided funds from his bank to purchase and develop the land on the condition that its status be changed from Maori land to General land.

·         At the time of the previous rejected application, the landowner had not explored the possibility of leasing out his land for profit as this would retain its Māori land status. The land was now in such a poor state that restoration would require significant investment and it would not be profitable to lease. This would fail to provide the landowner with the financial stability he sought in his ill health and so was no longer a realistic option.

·         No individual with a direct connection to the land had since expressed any interest in purchasing the land. Therefore, the interest from the private buyer was an opportunity not to be missed.

Considering these factors, the Court agreed that changing the land’s status to General land would likely lead to its most effective management and use.

Having concluded that the landowner met the first part of the test, the Judge could progress to asking whether he ought to exercise his discretion in this instance. Only where a landowner’s circumstances are quite extraordinary will their application be successful.

The Judge expressed allowing land to be sold more easily was usually no reason to change the status of Māori freehold land.  However, in this case he considered several details in the owner’s favour:

·         The prospective buyer was prepared not only to restore the land’s condition, but also to convert part of it to a Māori reserve and allow the dwelling on the land to remain Māori-owned.

·         Those with direct connections to the land supported its change in status in light of the landowner’s health issues and needs.

Provided part of the land was set aside to become a reserve and the dwelling remained under Māori ownership, the change of status and sale was allowed, on the basis that it was the best way to sustain the land for future generations while also promoting a balance between use and retention of land.

Option of last resort

Changing the status of land from Māori land to General land is an option of last resort and requires evidence of specific plans to convince the Court that the change is consistent with the purposes of the Act.  Without that evidence, the sale of land for an owner’s benefit is merely a possibility that is not hampered by the land’s status as Māori land. In several Māori Land Court judgments, a sale and purchase agreement, or evidence to that effect, has been considered to be adequate proof that landowners meet the first stage of the test.  However the second requirement of proving that the Court should exercise its discretion can be more challenging.

Landowners should consider getting advice from a professional experienced in this area of the law, so that the options and hurdles can be fully explained and taken into account in any application.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-priced Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.