High School Endowments.

Te Aroha News, Volume XXVII, Issue 43348, 11 July 1908, Page 3

High School Endowments.

QUESTION OF LEASES,.

AN ALTERATION SUGGESTED.

At Tuesday’s sittingof the Thames High School Board of Governors the following special report from the Chairman and Secretary was read and adopted, it beiDg decided to adopt the lease for 63 years with valuation at the end of each term of 21 years : “ With the object of obtaining information that. would be, of guidance to the Board ill dealing with the reletting of certain endowment leases, we beg to report that we called on the Secretary of of the Secondary School Commissioners and the Crown Lands Office at Auckland to ascertain the conditions of their various leases , , , At the commencement it may be pointed out that the High School Board is really in competition with both the School Commissioners and f the Crown Lands Board in.dealing with: its leases. The School Commissioners have land practically adjoining the Board s Endowment, and while more favourable terms can be obtained for leasing this land and the Crown lands in the vicinity, it is unlikely that the Board will secure the best class of tenant for its Endowment. Bri fly the Government leases have now beenj brought under two heads. A 66 years’ renewable lease has been substituted for the old lease in perpetuity, and and n ~-w lands acquired under the Lands for Settlement Act are leased under a 33 years’ renewable lease. Under the 66 years' lease a rental of 4 per centum of the capital value of the land is provided for, and the lessee has the further right to pay up to -90 per cent, of the value of the land with a corresponding decrease in the rental. ■'The rent reserved under the 33 years.

or what is now the principal lease issued by the Government, is 5 per centum of the capital value. The tenant is required to resi 'e on his lease, to make improve' merits to the value of 10 per centum of

improvements in the second year, and in six years a further 10 per cent, or a total of 30 per cent, of the value of the land in improvements in six years. It is further required that within the 6 years substantial improvements defined under the Land Adt, 1892, such as drainage and improvement of the, soil, must be made to the value of £1 per acre for first class land, and 10s per acre for second-class land. Another important clause in this lease is one which in the event of the lessee failing to keep his drains clear, or to keep the land clear from noxious weeds, etc., gives the Commissioner power to have the tvork done at the expense of the lessee. If a renewal of the lease is required, the value of im« provements is determined by arbitration. This amount is deducted from the value of the fee simple of the land, and a new rent not exceeding 44 per cet. is payable on this remainder. The lease under which the School .Commissioners work is a 21 years’ renewable lease with slightly modified con-

ditions from the Government 33 years’ lease. The 21 years’lease is put up to auction or tender, and the lessee has the right of renewal at the expiration of that time at a rate to be fixed by arbitration or valuation Should the lessee not,desire to renew the lease, the Commissioner may pay to the outgoing lessee the value of the improvements determined by arbitration, or the lease is again submitted to auction or tender and the new lessee has to pay to the outgoing lessee the value of improvements, but the Commissioners are in no way liable for Such payment. It would appear lhatno satisfactory lease can be arranged without providing for a due recognition of the improvements made by a tenant, and with the experience of both of the leading authoriwe have referred to, we have no hesitation in recommending the Board to adopt such a proviso in future leases. Regarding the present leases, under section II of ‘-The Public Bodies Powers Act 1987 ’’ the Board could ac-

ccpt the surrender of a lease, and grant a new lease under fresh conditions for the balance of the term of the original lease at a rent. to be fixed by special resolution of the Board Where application is made to the Board for an extension of the present leases, we Wuuld suggest that in the case of tenants that have faithfully carried out the' conditions of their existing lease, the application should be dealt with under the section before referred to, and that a renewable lease should be granted for the remainder of the term of the original lease at a rent to be fixed by arbitration in the following manner.

One arbitrator to be appointed by the tenant and lone by the Board, with an umpire to be chosen by the two arbitral tors. Failing the arbitrators agreeing in the appointment of an umpire, the Board to have the right to make the appointment. The arbitrators shall then determine the value of the improvements as defined by the Land Act, 1892, and from this amount shall be deducted the amount of compensation paid by the Board at the expiry of the previous lease. The gross value of the fee simple of the land shall also be ascertained and'a new rental shall be fixed having due regard to these valuations. At the expiration of the term of that lease, the lessc e t hall have the right of renewal for a furtl er period of 21 years at a rent to be fixed by arbitration, and should the tenant not desire ,to renew the lease, then the incoming tenant shall pay to the outgoing tenant the value of his improvements determined as aforesaid, but the Board undertakes no responsibility for the payment of improvement to an outgoing tenant. The expenses of arbitration to be equally shared by the applicant and the Board.

We would strongly recommend that all new r leases be granted under conditions somewhat similar to the School Commissioners 21 years’ renewable lease with payment for improvements by the incoming tenant. For the information of the Board we would suggest that the Board’s solicitor be requested to draw up draft conditions embodying the most suitable clauses under the Commissioners lease and under the Crown 33 years’ lease.”