LEASES BY LOCAL BODIES

Evening Star, Issue 16335, 30 January 1917, Page 6

LEASES BY LOCAL BODIES

TIOVAL COMMISSION. Ski'oni' Sittini;. —Trfsnvv. The T’oyal Commission Mr Ju-tico TTnskillpr (chairman! am! Messrs C. I’. Thomas (Auckland) ami W. Milne -O.unarui--ap-pointed to ini|iiire into the terms of leases granted hy local hodies, and particularly as to methods of revaluation, sat again this morning. A little evidence was taken yesterday afternoon, too late for inclusion in the issue of that date. Thus : Third ley C. Reynolds, valuer for the corporation, said that nearly all the public bodies had 21 years’ leases, and he thought this an equitable lease. In valuing under tills system, he worked on the prineiple that if 5 per cent, was the current rate 1 per cent, less was equitable under those leases. lie thought there was one improvement that should he effected in the present system. The appointment of Cue third man (the umpire' l should not be left to either the landlord or the tenant. Instead. the Comt in each town should have on its list two or three sworn valuers who should take no part in any arbitration or valuation of land, and the valuers in any given ease should take one of these men appointed by the Court as third valuer. In that way thcie would bo certainly of au impartial man for the third valuer. T\m. Stevenson, tenant of the Wellington Corporation, said that it coined to him that the Wellington Corporation placed its valuation 100 high.. Kleven nr twelve years ago there was a great liman there, and buildings were scarce. At that time bis firm erected a building on the values of the boom time, but now times had changed. The result on the hist valuation was that their rentals bad shrunk so much that on the bads of calculation placed before the Commission they showed a bos on the investment. Since the last valuation the whole of the building bad Deem let, and yet they were no better off to-day than they were mi the day the valuation was made, 'three years ago. The lirst witness to-day was (!eo. Simp'on, builder and contractor. lie said that for many years he had represented the, Otago ll.arbor Hoard as vainer for rentals’ and buildings. Hi- method of valuing wa- to ascertain lirst the freehold value of the piece of ground in question, bv reference to the saleable value of adjacent- laud or similar land in the market. Having ascertained this, he adopted 5 per cent, on the full freehold value as a fair percentage. The hulk of the Harbor Hoard leases were on the 14 years basis. From tbo le-see’s point of view a 21 years’ lease was moie favorable, but from the lessor's point of view 14 years was better, because with land appreciating in Milne the landlord. after a few years, would not be get ting anything like bis 5 per cent. His experience, generally .'[leaking, was that in Dunedin the lessees appointed as their valuers competent men. Here, at any rati', the system of appointing a vainer on each side and a third as umpire had proved satisfactory. As against it lie thought arbitration would prove 'eery expensive, and could not, at best, give more equitable results. He saw no barm in making provision lor appeal to a Judge, but in 25 years’ experience he remembered only one case in which be would have advised an appeal. .So far as he was aware, there was no substantial complaint against the method of valuing or the teim of the leases. His Honor a-ked witness's opinion of Mr Reynolds’s .suggestion that the umpire should bo one of a, number of valuers who were on an official court rota. 'Witness said ho thought they had a sufficient safeguard in the power to refer the matter of umpire to the Judge. l!e----vorting to actual valuing, witness added that where there were buildings put on tho lamJ_Ly tenants these were given a very benevolent value, so that full value had to be paid in cam of a. tenant being ousted. James Qunill, associated in the matter of Church Hoard leases, said that if valuation was accepted by both parties auction was waived. In residential leases terms were usually agreed upon : in business leases there was usually arbitration, their methyl being three arbitrators, and not two valuers and an umpire. In their leases there was compulsory renewal if there was no bill at auction, but lie did not think this was regarded as a blot on the lease. Their leases were regarded as good security to borrow money on, judging by the number of mortgages that went through. Their method of arriving at rental was to Hurl the true capital value and fix 5 per cent. When leases were sold the vendors usually got full value lor their improvements. Geo. Clark, builder, who was present said he did not want to give evidence, but he could not agree with much that had been said. There was feeling among some of the lessees. The Chairman said it had been advertised that tenants would bo hoard, but none were here. If Mr Clark would furnish tbo names of tenants, the Commission would have them asked to attend to-mor-row. Air Clark said he would do -a. The Commission were taking evidence again this afternoon.