Right of First Refusal (RFR)

Crown agencies hold land and property for a range of reasons. Where the Crown has reached a Treaty settlement with an iwi claimant group, this land may become subject to a Right of First Refusal (RFR) in favour of that iwi.

An RFR is a long-term option for iwi to purchase or lease Crown-owned land, and will generally remain in place for 50 to 170 years (in some cases longer). However, RFR timeframes, processes and their scope can differ from settlement to settlement. In each case, you should consult the terms of the settlement you’re interested in to work out how the RFR will apply.

Land subject to an RFR

Not all Crown-owned land will be subject to an RFR, and there is no “one size fits all” approach for determining whether an RFR applies to a parcel of land. Generally, an RFR may apply to land that:

• is included in a list in the Treaty settlement (“a List RFR”) or falls within a specified geographic area (“an Area RFR”); and
• is owned by the Crown at the date the RFR provisions take effect.

Each Treaty settlement is different. The RFR may operate in different ways, particularly where land subject to an RFR is included in more than one Treaty settlement. In every case, the relevant Treaty legislation and deed(s) of settlement need to be checked.

RFR requirements

If a Crown agency wishes to sell land or enter into a long-term lease (usually of 50 years or more), it may be required to make an RFR offer to sell or lease the land to iwi.

There are a number of situations where the Crown agency would not be required to offer the land to iwi.  For example, an RFR does not apply if the agency is selling land to a former owner under the Public Works Act 1981, or where there is an existing legal obligation to transfer the land to another party.

RFR process

The RFR operates as part of the disposal and leasing processes of Crown-owned land.  These processes include other statutory requirements and government policies that must also be complied with. 

For land held under the Public Works Act 1981, the first stage in the disposal process involves checking whether other government departments or local authorities need the land for a public work (such as roads). If the land is not needed by other agencies, it may then be offered for sale to the person from whom the land was acquired, or to their successors.  

If the property is still available after these first two stages, the agency may then be required to offer the land for sale to iwi under the RFR.

What happens if the iwi accepts the RFR offer?

If an RFR offer is made and accepted, then a contract is formed.  The land will transfer, or be leased to iwi following payment of the purchase price or rental. 

What happens if the iwi does not accept the RFR offer?

If an iwi chooses not to take up the RFR offer, then the Crown can continue to dispose of or lease the land. But the land must not be sold or leased at a lower price or on more favourable terms to another buyer.

If the Crown reaches an agreement with another party for the sale or lease of land and the terms are better than those originally offered to iwi, then the land must be re-offered to iwi on those better terms.  

If the Crown is unable to sell or lease the land within the period defined in the settlement, it is also required to re-offer the land to iwi.

RFR memorials

A number of settlements, including almost all recent settlements that have an RFR, require that a memorial be placed on the computer registers for relevant Crown-owned land.  These memorials note that the land is subject to an RFR and can only be removed if it can be shown that the settlement’s RFR provisions have been met.

For more information on the Treaty settlement process, visit the Te Arawhiti - the Office for Māori Crown Relations website

For more information on our property disposal process, see Crown property disposals.