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The Process and Risks of Buying a Boatshed or Beach Box

The Process and Risks of Buying a Boatshed or Beach Box

Newsflash

With summer approaching, many Victorians turn their minds to relaxing on the beach. A boatshed or beach box on the coast is tempting. These now highly prized and tightly held boatsheds often now sell for very large sums of money.

Kellehers is involved in boatshed transfers. This is a unique kind of land transaction with a different process to ordinary land sales. It also comes with its own unique risks.

Generally, boatsheds and beach boxes are located on reserved Crown land, ie land vested in the Crown and reserved for a particular public purpose. When a person buys a boatshed or beach box, he or she does not actually buy the land on which the structure sits. Rather, the purchase is of the structure itself, as well as a Licence (issued by the public authority responsible for managing the land) to use and occupy the land. As such, it appears that the Sale of Land Act 1962 (Vic) (‘SL Act’) does not apply, and boatshed transactions take place without any regard to its requirements. This means there is no detailed standard form contract like for a sale of land, and the vendor does not provide a s32 statement disclosing important information about the land. However, general legal requirements (such as consumer law) still apply.

As a purchaser of a boatshed does not enjoy the SL Act protections, it is critical that he or she ensures there are no major issues with the boatshed or the licence to use the land before signing the contract. The transfer of a Licence must generally be approved by the relevant public authority. All boatshed sale contracts should include a clause making the sale subject to such approval. A Licence holder will generally be liable to pay an annual site fee and Council rates and charges.

Further, use of reserved Crown land is subject to detailed legislative requirements in the Crown Land (Reserves) Act 1978 (Vic) and, in the case of coastal Crown land, the Coastal Management Act 1995 (Vic). To ensure there are no legal issues with a Licence to use and occupy reserved Crown land, purchasers should be satisfied of the following:

  1. That the public authority issuing the Licence is validly appointed as the trustee or committee of management for the relevant land;
  2. If the land is reserved Crown land, the purpose for which it was reserved;
  3. Whether any recommendation was made under the Land Conservation Act 1970 in respect of the land;
  4. The responsible Minister (usually the Minister for Energy, Environment and Climate Change) issued an approval for the Licence; and
  5. For coastal Crown land, the responsible Minister issued a consent for the use of the land.

If any of these requirements are not met, the Licence may be legally invalid.

Given the expense of purchasing a boatshed or beach box, with its associated Licence, and the relative lack of protection for purchasers, it is prudent for purchasers to seek legal advice well before signing a contract. Kellehers Australia has substantial experience in advising on Crown land and coastal Crown land issues.

Freeman Zhong

5 December 2017

 

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Liability limited by a scheme approved under Professional Standards Legislation. This fact sheet is intended only to provide a summary and general overview on matters of interest. It does not constitute legal advice. You should always seek legal and other professional advice which takes account of your individual circumstances.