Sublet aquaculture lease - information kit

• Sublet aquaculture lease application form (PDF, 185.81 KB)

When is an application to sublet a lease required?

An application to sublet a lease is required when the current lessee does not hold an aquaculture permit, or they would like another permit holder to use their lease for aquaculture activities.

If a lessee holds an aquaculture permit in a different name to what is shown on the lease documents, a sublet agreement may be required. For example, the lessee is an individual however the permit is held in a company name and the lessee is a director of that company. In these cases, a sublet agreement is required as the individual and company are different legal entities.

A sublet agreement authorises another person or company who is not the lessee to undertake aquaculture on a lease. It does not change ownership of the lease.

When is a sublet agreement not required?

When a permit is held by one or more individuals and the associated lease is held by at least one of those individuals, then a sublet agreement is not required.

Who is the lessee and the sub-lessee?

Lessee - the individual or corporation who owns the lease and is making application to sublet the lease to another permit holder.

Sub-lessee - the individual or corporation whose aquaculture permit will authorise the lease under the sublet agreement. The sub-lessee must hold a current class A or class B aquaculture permit.

In this document, the sub-lessee is simply referred to as the permit holder.

When can an aquaculture lease be sublet?

An application to sublet a lease may be submitted at any time while the lease is current. A lease that has expired or is otherwise terminated cannot be sublet.

How is an application to sublet a lease duly made?

• Complete the lease sublet application form (link provided above). This involves completing every section of the form in clear and legible print. Ensure all parties (lessees and permit holders) sign the form. An incomplete application form be rejected.
• Submit payment of the application fee (refer to the aquaculture fee schedule).

What happens to the lease and permit fees when a lease is under a sublet agreement?

Lease rent remains the responsibility of the lessee.

After the sublet has been completed, relevant permit fees will be redirected to the new permit holder in the next billing period (on 1 July). Until then, any permit fees that have already been invoiced remain the responsibility of the lessee or former permit holder.

Can a lease be sublet to any person?

No. The permit holder must:

• hold a current class A or class B aquaculture permit.
• not be an individual, corporation or director of a corporation who is disqualified from holding an aquaculture permit under section 161 of the Fisheries Management Act 1994.
• not be an individual or corporation with outstanding lease or permit fees payable to the Minister.
• not be an individual or corporation who, in the Minister’s opinion, is considered to have a poor record of managing one or more other leased areas.

How can the sublet application fee be paid?

Payment options are provided on the lease sublet application form.

Is the application fee refundable if the application is withdrawn or refused?

If an application to sublet an aquaculture lease is withdrawn or refused, NSW DPI is not required to refund the application fee. NSW DPI may, however, refund the whole or part of the fee if appropriate.

What happens after an application to sublet a lease is lodged?

NSW DPI will check to ensure the applicants have addressed all matters relating to the sublet agreement. If anything is missing or outstanding, the application will not be progressed until the outstanding requirements are met. If these are not met in a reasonable timeframe, the application may be refused.

Once all requirements are met, NSW DPI will update its records with the details of the sublet. An updated aquaculture permit is sent to the relevant permit holder.

The sublet will remain in force until either the lessee or permit holder terminates the agreement, or until the lease expires or is otherwise terminated.

What happens if the lease expires?

If the lease expires, the sublet agreement is automatically terminated. However, if the lessee applies to renew the lease and the renewal is approved, the sublet agreement will continue until either the lessee or permit holder terminates the agreement.

How is a sublet agreement terminated?

The Minister may terminate a sublet agreement at any time for any reason.

Either the lessee or permit holder may terminate a sublet agreement at any time via a written request.

If the permit holder requests the termination, the lessee will be given 30 days to make alternative arrangements for the lease, before the lease is removed from the permit. If no other arrangements are made by the lessee within this timeframe, NSW DPI may move to cancel the lease.

If the lessee requests the termination, the permit holder will be given 30 days to remove any material from the lease that belongs to them, before the lease is removed from the permit.

Under what circumstances would an application to sublet a lease be refused?

An application to sublet an aquaculture lease may be refused if:

• the permit holder is disqualified from holding an aquaculture permit.
• the lessee or permit holder fails to submit or complete any requirements of the transaction within a specified timeframe.
• the lessee or permit holder has overdue debt which has been outstanding for more than 90 days.
• the lessee or permit holder has failed to clean up a previously terminated lease area.
• the sublet of the lease is not in the public interest.

Before an application is refused, NSW DPI may write to the applicants inviting them to lodge objections to the refusal of the sublet application.

What are the lessee’s and permit holder’s responsibilities following a sublet agreement?

The lessee is responsible for the covenants and conditions of the lease including:

• Payment of lease rent.
• Correct marking of the lease area.
• Ensure compliance of the permit holder in relation to lease maintenance and with all covenants and conditions of the lease.

The permit holder is responsible for:

• Payment of all permit fees (research fees and lease security) relating to the lease.
• Observe all conditions of their permit that relate to the lease.
• Maintain public liability insurance.
• Keep the lease in a neat and tidy condition, as per NSW Oyster Industry Sustainable Aquaculture Strategy (OISAS) 2021.

Does the lease need to be covered by public liability insurance?

Yes. All current aquaculture leases must be covered by public liability insurance (PLI). This is the responsibility of the permit holder. Each year, NSW DPI undertakes an audit on PLI and may request information from permit holders regarding their PLI.

Where can I get more information about sublet agreements?

For more information, contact Aquaculture Administration via email at aquaculture.administration@dpi.nsw.gov.au.

Application checklist

This checklist will help you to lodge a successful sublet application.

• Have you completed every section of the application form?
• Has the application form been signed by all lessees and permit holders?
• Does the permit holder hold a current class A or class B aquaculture permit, or have they submitted an application for a new permit?
• Is the lease current at the time of application? If the lease is about to expire, has an application to renew the lease been submitted?
• Have you paid any outstanding aquaculture lease and permit fees?
• Have you addressed all outstanding clean up responsibilities on any expired or otherwise terminated lease area?