Surplus school property

This page includes information on rationalising school property and the Crown disposal process.

Level of compliance Main audience Other

Inform

  • Boards
  • Proprietors
  • Principals and Tumuaki
  • Project Managers
  • Property Managers
  • Community Groups

Surplus school property

Surplus school property is defined in three fundamental ways:

  • More than four surplus teaching spaces that aren’t likely to be needed to accommodate roll growth
  • Land that is not being used and is unlikely to be needed
  • Other buildings such as houses, dental clinics or halls that are surplus to requirements. 

Rationalising surplus school property

Teaching spaces are defined as surplus based on the School Property Guide (SPG) entitlement. It is important that boards plan to rationalise any surplus property that is no longer being used, as these can put an unnecessary burden on a school’s maintenance and operational budget. For example, a school will not receive funding for any additional teaching space defined as surplus in accordance with a school’s SPG entitlement. 

Rationalisation plan

A rationalisation plan needs to be developed and provided to the Ministry if a school has more than four surplus teaching spaces. This plan is developed by taking an overview of the property on the school site and determining what property to retain, what property to dispose of, and the best way to dispose of any surplus property. The rationalisation plan should be included in the school’s 10 Year Property Plan (10YPP), and there should not be any projects to upgrade buildings that are surplus to requirements and will be rationalised. 

Rationalisation options 

The rationalisation of surplus property can be achieved by:

  • Relocating buildings to another school site where there is need
  • Demolishing buildings, particularly if they have passed their economic lifespan
  • Putting buildings/land into the Crown disposal process.

The Ministry encourages schools with surplus property to release it back to the Ministry, as if the property is surplus to education requirements it can then be sold through the Crown disposal process. Following this sale, schools receive some or all of the proceeds under the Surplus Property Disposal Incentive Scheme (SPDIS). Land (and buildings, by association) can be sold through the Crown disposal process if deemed surplus to educational requirements. The Ministry has the responsibility to determine whether property should instead be rationalised or retained for roll growth.

Relocating surplus buildings

Relocatable classrooms, also referred to as portable or transportable classrooms, can often be relocated from one school site to another, provided they are fit for use. Reasons include:

  • Rationalising surplus buildings
  • Relieving property shortages at the receiving school
  • Managing temporary classroom shortages (eg after a fire).

Should the roll fall at the receiving school, or there is no longer the same need for it, the relocatable can be moved to another site. Relocatable buildings belong to the Ministry, so cannot be sold by the board. However, if surplus, they can be released to the Ministry for use elsewhere. 

Demolishing school buildings

Demolition is a means of disposing surplus permanent and relocatable buildings, and Ministry consent must be sought before a surplus school building is demolished. To action a demolition, schools must prepare a demolition plan that involves reasonable costs. If the plan is approved by the Ministry, the school will be advised of the budget for the project, which must meet Ministry project management requirements. 

The Ministry will fund the demolition of surplus buildings if:

  • It is part of an approved 10YPP
  • The buildings are past their economic life
  • Other rationalisation options are impractical – for example, the building cannot be relocated or put into the disposal process
  • Demolition is practical and the required funding is available.

This funding will not be granted if schools wish to demolish a building as part of a modernisation project, eg if it is the intention of the school to use 5YA funding to replace an old building with a new one, the demolition costs must be included in the 5YA project budget. 

Crown disposal process

All Crown disposals are governed by current Government policy and by Section 40 of the Public Works Act 1981(external link). There are several obligations that need to be observed throughout the disposals process, many of which can take an extended period of time to address:

  • Other government organisations who may wish to use the land
  • Former owners having the opportunity to buy the land or take back the land in the event the land was originally gifted
  • Māori Land Court procedures and the Treaty Settlement process
  • Issues such as the separation or amalgamation of titles in the instance that land is across multiple parcels
  • Consideration of heritage buildings.

Toitū Te Whenua Land Information New Zealand (LINZ) manage the disposal process on behalf of the Ministry following the process outlined below:

  • If it is needed for a public work, the property may be transferred to another Government department or local territorial authority.
  • If not transferred for a public work, the property will be offered back to the previous owner or their beneficial successors. If the land was initially gifted to the Crown, then it must be offered back to the previous owner at no cost. However, should the previous owner choose to accept the land, they are required to pay for any Ministry funded improvements (ie buildings).
  • The Crown’s obligations under Te Tiriti o Waitangi are investigated. If the property is in an area subject to a Treaty settlement, the property will usually be subject to a right of first refusal. If not, the property is submitted to Te Arawhiti (The Office for Māori Crown Relations) for consideration under the Māori Protection Mechanism. If the property is approved for purchase, it will be held in the Treaty Settlements Landbank until the claim is settled by the Government. While in the landbank, the property has no further ties to the Ministry.
  • If the property is neither purchased by iwi nor land banked, it is advertised on the open market for sale.

It is important to note that the above process does not apply to any land that has been previously transferred to iwi under a sale and leaseback arrangement – the land is no longer owned by the Crown, as it is leased from the iwi landlord, therefore neither the Ministry nor the board have any rights to sell the land. Negotiations could occur between the iwi and the Crown for the Treaty settlement lease to be amended to reflect a smaller leased area of land, however these discussions occur on a case-by-case basis. See Treaty Settlements Programme – Education in New Zealand for more information. 

Initiating the disposal process

If a school wishes to dispose of any surplus property, they must advise its Property Advisor, and provide both a letter signed by the principal and presiding member of the board asking the Ministry to put the property into disposal, and a copy of board minutes recommending the disposal. Disposal cannot occur without the written consent of the board. If the Property Advisor supports disposal the Ministry will then investigate the feasibility of doing so, including identifying any issues with existing service connections such as power, water and sewage, the provision of ongoing access to surrounding land, and whether the property should be retained for other education purposes.

If the costs associated with disposal are likely to be higher than the sale value of the property, the Ministry will consider if putting the property into the Crown disposal process is the best option, or whether other options such as demolition would be more appropriate. 

A property cannot be withdrawn from the Crown disposal process. It is important that schools who wish to dispose of any property record the decision, and make sure that all board members and the principal are aware that the property cannot be withdrawn from the disposal process, and that the decision is also binding for future principals and boards. 

While the property is going through the disposal process, it can continue to be used by the school, however it must continue to be maintained in the same way and to the same standard as other school property. Schools will continue to get normal property maintenance funding for any property in disposal up until the property is sold, transferred or land banked. 

Disposal of non-core houses

The Ministry has a programme to dispose of all non-core houses – houses that are no longer required for recruiting and retaining teachers. The Crown disposal process does not allow for a non-core house to be sold directly to sitting tenants, however they are able to bid for the house if it is put up for sale on the open market. 

List of disposals underway

Find out what school land or buildings are currently in the disposal process.

Surplus School Property [XLSX, 21 KB] (Last updated 31 October 2022)

This spreadsheet shows:

  • properties currently in the Crown disposal process
  • the contact person for inquiries
  • a disposal status column indicating current progress for each property. Please note that the properties where the Disposal Status is shown as Open Market Sale may be available to the public to purchase.

Receiving proceeds from the sale of surplus school property 

Under SPDIS, schools receive a share of the net sale proceeds after all disposal costs have been paid. The percentage of net proceeds received by the school depends on the type of property being sold.

  • General land and building proceeds: schools receive 50% of the net proceeds from the sale of surplus non-housing land and buildings.
  • School housing proceeds: schools receive 100% of the net proceeds from the sale of a school or caretaker house. 

Any net proceeds received by a school are added into their current 5YA budget, and these funds must be used to meet the goals of the school’s 10YPP. Should any proceeds be retained by the Ministry, they are reinvested back into the wider school property portfolio. If any land is sold that was originally gifted to the Crown, schools only receive a share of the net proceeds of any improvements (ie buildings), as the Ministry then returns the land to the former owner (or their successors) at no cost. 

Merging or closing of schools

When a school closes, administration of all of its assets, including school and caretaker houses, reverts to the Ministry. This also includes core houses managed or owned by the board, as the board dissolves in the event the school closes. This process is covered by Section 199 of the Education and Training Act 2020. 

If a school merges with another, all the board’s assets, debts and liabilities are transferred to the continuing school’s board, except for the previous school’s existing land and buildings. This process is covered by Section 206 of the Education and Training Act. 

With the now vacated site, the Ministry will consider if the land is needed for an education purpose, or if it is surplus to education requirements. If the land is declared as surplus, the Ministry will put it into the Crown disposal process. The Ministry will decide whether to demolish or otherwise remove all improvements on a closed school site prior to disposal.

At the time of the merger, the Ministry will consider if the continuing school needs any houses that may have been on the closed school site for the purpose of recruiting and keeping teachers. If the continuing school needs the houses, the Ministry will assess if the houses can be subdivided off the closed school site. In this instance, the Ministry will pay for the subdivision costs, as well as continuing to manage any houses transferred across to the continuing school. Should the continuing school have no need for the houses, they will be put into the Crown disposal process with the rest of the land and improvements from the closed school site. 

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