Surplus school property

If your school has more property than it is entitled to under the School Property Guide (SPG), as a board of trustees you need to find ways to rationalise it. When the Ministry sells surplus school property through the Crown disposal process, you receive some or all of the net proceeds of the sale under the Surplus Property Disposal Incentive Scheme. Other ways of dealing with surplus school buildings are to ask for them to be relocated or demolished.

Rationalising surplus school property

You must plan to rationalise surplus space when you have more than 4 surplus classrooms or have other property you no longer use. The surplus is based on your School Property Guide (SPG) entitlement.

You can choose to rationalise surplus space before the school reaches the 4-classroom threshold. For example, if you are a small school, keeping even one or 2 surplus rooms can put an unnecessary burden on your maintenance and operational budget.

Rationalisation options

You can rationalise surplus property by:

  • putting it into the Crown disposal process
  • relocating buildings to a school that has a shortage of space or a school that needs temporary accommodation after a catastrophic loss, like a fire
  • demolishing buildings, particularly if they have passed their economic life.

We may sometimes initiate a rationalisation project, like moving a surplus relocatable building to another school.

You cannot sell a surplus school building that is owned by the Crown.

Rationalisation plan

If you have more than 4 surplus teaching spaces, you must provide us with a copy of your rationalisation plan. To develop your plan, you look at your school as a whole and work out:

  • what property to keep
  • what property to dispose of
  • the best way to dispose of the property you are rationalising.

You should not have projects to upgrade buildings that will be rationalised.

Your rationalisation plan should show how you will rationalise both teaching space and non-classroom space such as halls and gyms.

You should either:

  • include the school’s rationalisation plan in your 10 Year Property Plan (10YPP)or
  • have an agreement with the Ministry about how many teaching spaces are surplus.

You can use the Rationalisation plan template [DOC, 231 KB] to help develop your strategy for surplus property.

Releasing surplus property for disposal

If you have surplus school property, we encourage you to release it to us so it can be sold through the Crown disposal process. Once it is sold, you will receive some or all of the sale proceeds under our Surplus Property Disposal Incentive Scheme.

Ministry decision on disposal or other options

The process for putting property into the disposal process depends on the type of property. Both land and buildings can be sold through the Crown disposal process if they are no longer required and won’t be needed for long-term roll growth. The Ministry has the final say on whether the property must be retained for roll growth.

If disposal costs are likely to be higher than the sale value, we will consider whether it is worth putting the property into the Crown disposal process. We may consider other options, like demolition.

Your role during the disposal process

If you want to dispose of school property, other than houses, advise your property advisor by sending them:

  • a letter signed by the principal and board of trustees chairperson asking for the Ministry to put the property into disposal
  • a copy of the board minutes recommending the disposal.

You may need to complete a feasibility study if there are likely to be subdivision costs or other issues, like landlocked land and potential roll growth.

Your property advisor can provide advice about who can complete the feasibility study for you, and will assist you through the process. You must cover the costs of the study.

Your property advisor will then draft a recommendation to the Ministry's National Office requesting approval to put the property into disposal if it is economical and feasible to do so, and the property is not required for roll growth.

Once the property goes into the Crown disposal process, you cannot withdraw it. Record your decision and make sure all board members understand that:

  • the property cannot be withdrawn
  • the board is not involved in the disposal process
  • the decision binds future boards.

However, while the property is going through the process, you continue to get normal property funding for it and you must continue to maintain it to the same standard as other school property.

Steps in the Crown disposal process

All Crown disposals are governed by current Government policy and by section 40 of the Public Works Act 1981 (external link) . Land Information New Zealand (LINZ) manages the disposal process, following these steps.

  1. The property will be transferred to another government department or territorial local authority if it is needed for another public work.
  2. If it is not transferred under step 1, the property will be offered back to the previous owner (or their beneficial successors) if required. If the land was gifted, then it must be offered to the previous owner(s) at no cost. However, if they choose to take it, they must pay for any Ministry-funded improvements (ie buildings).
  3. If the property is not returned under step 2 but is subject to a settled Treaty of Waitangi claim, the land is offered to the relevant iwi. For more information, go to Iwi leased school sites.
  4. If the property is neither returned under step 2 nor subject to a settled claim, it is assessed under the Māori Protection Mechanism process and the Sites of Significance process. If a claim is successful under the Māori Protection Mechanism, the property is usually land banked. That is, the Office of Treaty Settlements purchases and holds it until the Government settles the claim.
  5. If the property is neither purchased by iwi nor land banked, it is put on the open market for sale.

Length of the disposal process

Properties with no complications usually take up to 24 months to sell. However, if there are difficulties in the disposal process, a property can take up to 4 years to sell. Some difficulties might be that the property:

  • was acquired many years ago so that some time is needed to identify and find former owners or their successors
  • is part of a land subdivision
  • has multiple titles (requiring amalgamation or separate offer-backs)
  • is part of a Māori land claim involving disputed or collective ownership, which may need Māori Land Court decisions
  • has been gifted.

List of disposals underway

To see what school land or buildings are currently in the disposal process, see:

This spreadsheet shows:

  • properties currently in the disposal process
  • the contact person for inquiries
  • a status column indicating current progress for each property.

Disposing of school houses

You can put school housing you no longer need into disposal. This disposal process applies to:

  • core and non-core teacher housing
  • caretaker housing.

For more on these housing types, go to the School housing policy.

How to request a housing disposal

To request that housing be put into disposal:

  • record the decision in the minutes of your next board meeting
  • send a letter or email signed by the principal and board chair, with a copy of the board minutes, to your property advisor.

If the house is on the main school site, we will decide whether it is possible and economic to subdivide. If not, we may support demolition or removal. You will manage this work.

Any house disposal goes through the Crown disposal process under the Public Works Act 1981. Once the house goes into the Crown disposal process, you cannot withdraw it. Record your decision and make sure all board members understand that:

  • the house cannot be withdrawn.
  • the board is not involved in the disposal process.
  • the decision binds future boards.

Sales to sitting tenants

You cannot sell directly to sitting tenants except in special circumstances. If you want to do this, talk to your property advisor. We then prepare a pre-approval report for LINZ, setting out the merits of selling to the sitting tenant.

Programme for disposing of non-core houses

We have a programme to dispose of all non-core houses. These are houses that are no longer needed for recruiting and retaining teachers. You will still get the proceeds of the sale for houses in this programme.

Receiving proceeds from the sale of surplus school property

Under our Surplus Property Disposal Incentive Scheme you will receive a share of the net sale proceeds. The net proceeds are the amount of money left after all the disposal costs have been taken off. The percentage of the net proceeds your school receives depends on the type of property being sold.

Land and buildings proceeds

You receive 50% of the net proceeds from the sale of surplus non-housing land and buildings.

School housing proceeds

You will receive 100% of the net proceeds from the sale of school housing.

Applying the net proceeds

Your net proceeds for both land, buildings and houses are added to your school’s current 5 Year Agreement (5YA) budget. You must use them to meet the goals of your 10 Year Property Plan (10YPP). We put our share of the proceeds back into the budget from which we fund all schools’ 5YA allocations.

Gifted land proceeds

If the land was originally gifted to the Crown, you will only receive a share of the net proceeds of the improvements (ie buildings). This is because the Ministry returns the land to the former owner, or their successors, at no cost. The former owner pays for the improvements, if any, at the current market rate.

Relocating surplus school buildings

Relocatable classrooms are non-permanent buildings that the Ministry owns. They are also known as portable or transportable classrooms.

Fit-for-use relocatable buildings

If a relocatable building is fit for use, it can be moved from one school to another to:

  • rationalise surplus buildings
  • address property shortages at the school receiving the building
  • manage temporary classroom shortages (eg after a fire).

When the roll falls at a school receiving the building, or the school no longer has the same need for it, the building can be moved to another site.

Applying to release relocatable buildings for disposal

Relocatable buildings belong to the Ministry so you cannot sell them. However, if you have a surplus relocatable building that is not needed by another school or is unfit for use, you can release it to us for disposal.

Our national disposal contractor manages the sale. The purchaser pays for:

  • any local authority consents needed to remove the building
  • moving the building
  • disconnecting services
  • reinstating the old site.

Contact your local Ministry office for advice on disposing of or moving a relocatable building.

Unfit-for-use relocatable buildings

If you have an unfit-for-use relocatable building, you should release it to the Ministry for demolition.

Note: You cannot use board funding to buy a building that is no longer fit for use. We will not agree to you buying a building that is no longer fit for educational use.

Paying for the costs of moving a relocatable building

If you are the school receiving the relocatable building, you pay all project costs. The project budget must include:

  • removal costs
  • costs to put the building on the new site
  • any necessary upgrades.

It will usually also include costs to reinstate the old site. The 2 boards should negotiate the scope of this work.

We will usually pay removal costs if a relocatable building is needed temporarily after a catastrophic loss (eg fire).

The project budget should also cover improvements to a relocatable building once it has been relocated. However, it needs to be fit for use before it is moved to another school. To assess a building’s fitness, use our Relocatable performance assessment checklist [XLS, 23 KB].

Please note: the above checklist must be saved to your computer in order to open and complete it.

Demolishing school buildings

Demolition is a way of disposing of both surplus permanent buildings and relocatable school buildings.

You must seek Ministry consent before you demolish a surplus school building. Please note you cannot sell a surplus school building that is owned by the Crown.

We will fund you to demolish these buildings if they are on our rationalisation programme and if:

  • the buildings are past their economic life
  • other removal options are not practical – for example, the building cannot be relocated or put into the disposal process
  • the building will be demolished on site
  • demolition is practical and we have funding available.

You must prepare a demolition plan that involves reasonable costs. If we approve the plan, we will advise you of the budget. The project must meet our project management requirements.

You cannot get this funding if you wish to demolish a building as part of a modernisation project. For instance, if you intend to use 5YA funding to replace an old building with a new one, you must include the demolition costs in the 5YA project budget.

Property changes when a school closes or merges

When a school closes, all of its assets, including all school houses, revert to the Minister of Education. These assets include core houses managed or owned by the board of trustees because the board dissolves when the school closes.

This process is covered by section 154 of the Education Act 1989 (external link) .

When a school merges with another, all the board’s assets, debts and liabilities are transferred to the continuing school’s board, except for the school’s land and buildings. This process is covered by section 156A of the Education Act 1989 (external link) .

We will decide whether the land:

  • is needed for another education purpose, or
  • is surplus to education requirements.

If it is surplus, we put it into the Crown disposal process. Current Ministry policy is to demolish or remove all buildings on a closed school site.

At the time of the merger, we consider whether the continuing school needs any of the houses from the closing school to recruit and keep teachers. If the continuing school:

  • needs the houses, we work out whether the houses can be subdivided off the closing school site. We pay for the costs of any subdivision. We also continue to manage any houses transferred
  • does not need the houses, we put them into the Crown disposal process with the rest of the closing school land and buildings.

School property during disposal

While the property is in the disposal process, LINZ manages its maintenance and upkeep.

During this time, we may lease the property on a short-term basis to a community group and another party.

See Leasing school property for more information about leasing a closed school site or property in disposal.

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