Property rights don’t discriminate

The headline says  Controversial TV star expects millions to give public access to South Island station.

Taxpayers could be forced to pay millions of dollars in compensation to disgraced TV host Matt Lauer to guarantee public access to his high country station.

Lauer has partly opened up Hunter Valley Station to the public, complying with conditions set by the Overseas Investment Office when he bought the farm last year.

But the Department of Conservation and the Walking Access Commission are now pushing for unfettered access for trampers, hunters and tourists to a 40km unsealed, lakefront road that runs through the property.

That’s likely to cost taxpayers – with Lauer threatening court action and refusing to waive compensation.​

The Walking Access Commission has applied to the Commissioner of Crown Lands for an easement (or right of way) over the track, which runs along Lake Hawea. The Commission is balking at paying big money to “a very wealthy American with a tarnished reputation”, official documents say.

Property rights don’t depend on the person who owns it, their nationality or their wealth.  They don’t discriminate.

Lauer’s company Orange Lakes Ltd owns the lease to the $13 million, 6500-hectare property – but the Crown still owns the land. It would mark a legal first if an easement was granted against the wishes of a lessee. 

Lauer is legally entitled to be compensated for the easement – and Federated Farmers has swung its support behind him, fearful of the precedent if he were forced to grant access for free.  . . 

The headline would have been more accurate had it been: pastoral lessee expects compensation for loss of  property rights.

But most people don’t understand pastoral leases, tenure review and the attendant property rights.

Keith Woodford explains them in a post headlined high country tenure and the right to quiet enjoyment:

. . .The idea that it is all a big rip-off is now firmly embedded in the public psyche.  Supposedly, the officials have messed it up under both National and Labour led governments, selling off our birth-rights to access these so-called public lands. Even worse, those benefits have at times accrued to foreigners.

Missing from the debate has been an understanding of New Zealand land law, and the powerful bundle of rights held by leasehold runholders. In particular, runholders hold blocking rights which, in perpetuity, prevent the public from accessing their leased lands.

Under a pastoral lease, the crown owns the land exclusive or improvements. All improvements, including soil fertility, pasture, fences and buildings, and the rights any private property owner has to exclude the public are the lessees’.

Rectifying this situation, and bringing fragile mountain lands into the conservation estate, has been a major driver for land-tenure reform.  Gaining public access via reserves and covenants to some of the lower country adjacent to the big South Island lakes has also been important.

The way this has been done is via a trade-off. Runholders give up all of their rights to some areas, typically the high country, with additional rights given to them for other areas. The balance of transferred land rights then determines the net payment in either direction to ‘square things off’. . . 

If the value of the land and accompanying rights lessees surrender is less than what they gain, they pay the crown, if what they surrender is of greater value than what they retain, the crown pays them.

The distinctive characteristic of land ownership is that there are multiple forms of tenure, each with its own ‘bundle of rights’. Whereas the general public thinks that freehold tenure is ‘ownership’ and that leasehold tenures are ‘not ownership’, this is not what the law says. Underlying all of the land tenures is the notion that the ‘Crown’, on behalf of all of us, has power as to what can and cannot be done with the land. . . 

A key right within the leasehold bundle is the right to ‘quiet enjoyment’.  It gives leaseholders an absolute right to exclude the general public from that land, and to on-sell that right to future leaseholders. It means the public can be locked out in perpetuity. That exclusion relates not only to the high country, but to accessing, via runholder land, the shores of the big South Island lakes.

In some respects, this access situation is not greatly different to access rules between a tenant and the freehold owner of a suburban house. Although the landlord holds freehold title, this landlord has no right to have a picnic on the front lawn. If the landlord wishes to inspect the property, then prior notification is required.

There is a misconception that size makes a difference to access. But the right to privacy on, and the quiet enjoyment of, property is the same whether it’s a town section of a few hundred square meters, or a farm of many thousands of hectares.

It’s not just a matter of privacy, it is also a matter of safety. Farms are working businesses. For the sake of their stock, and the safety of visitors, farmers have the right to say who can access their property.

These rights to quiet enjoyment have been greatly underplayed in public discourse. As a result, a key feature of tenure review, being the opening up of our mountain lands to all of us, and accessing the shores of the big lakes, has also been underplayed.

In part, the underplaying has been because experts coming from overseas have not appreciated the rights which are specific to New Zealand law. For example, it is a very different situation than exists either in England, where there is ‘rights to roam’ legislation, and also very different to the public-access rights within America’s so-called public lands.

There are calls here for the ‘right to roam’ but the experience of farmers in the UK where it operates gives plenty of ammunition for farmers here to fight to retain their property rights.

Way back in 1948 at the time of the relevant Land Act, access by the public to these New Zealand mountain lands would not have seemed important. Even in the 1960s when I started my own tramping and mountaineering journeys amongst our mountain lands, those of us with such interests were very much in the minority.

In those days, if we wished to travel across runholder land we would simply call in at the homestead – a somewhat grand term for what were often in those days very simple houses – and ask permission. It was never refused.

Over time, the friendly relationship between runholders and walkers has changed.  The number of walkers has greatly increased. And so, more and more runholders have applied their legal right of quiet enjoyment, blocking out the rest of us.

If you have a very few hundred people visiting your property the small minority of trouble makers is tiny. When many thousands are visiting the proportion of trouble makers might be small but the number and the problems they cause are bigger.

Within the public discourse, there have also been elements of what I call ‘noble cause corruption’.  This is where a noble cause leads to information being miscommunicated, either consciously or subconsciously, to buttress the noble cause.

In the case of high country land tenure, the miscommunication has been to ignore the legal rights relating to quiet enjoyment.  Whereas the officials administering the tenure process have to work within the law and take account of the respective bundle of rights, the media is not so constrained.

This has meant that the media has been able to highlight a story of freehold rights for the lower country being granted to the runholders for an apparently small price, without making it clear that it is actually only the balance between perpetual lease rights and freehold rights that the Crown has sold. In essence, the Crown’s freehold rights were to collect a modest annual rental from the leaseholder and not much more. In contrast, when some runholders, now with freehold rights, chose to on-sell the property, they were actually selling the combined rights including their prior perpetual access and use rights.

Those rights belonged to the lessee not the government. Any owner, regardless of nationality or wealth has a right to be compensated should they surrender or lose them.

For more not his issue see:

How leasehold values have influenced high country reform.

Who owns the high country?

AndDepartment of COnservatio

Last of the Southern Man

2 Responses to Property rights don’t discriminate

  1. adamsmith1922 says:

    Reblogged this on The Inquiring Mind.

  2. […] Ele Ludeman at Homepaddock had a good post on this. She points out that despite the anti-foreigner stance taken by many commentators this is essentially about property rights. […]

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