Before incorporation an association’s land is in the names of trustees, its truck is registered to the chairman and its money sits in an account opened by the treasurer. Section 15 is designed to move all of it, at once, into the new legal person.
“On the incorporation of an association under this Act, any property held by a person, in trust or otherwise, for or on behalf of the association, is vested in the incorporated association, subject to any trust, covenant, contract or liability affecting the property.”
What vests
“Property” is defined in section 3 of the Associations Incorporation Act 2023 to include real and personal property, any estate or interest in it, a debt, anything in action, and “any other rights, interests, and claims of any kind in relation to property”. The vesting therefore reaches a State lease held by trustees, a bank balance, vehicles and equipment, a lease of the clubhouse, money owed to the association, and a right to sue. The condition is that the property was held “for or on behalf of the association”. Property that a member owned personally and merely let the association use does not vest; nor does property held for some other body.
Subject to trusts, covenants, contracts and liabilities
Vesting does not clean the title. Land held on trust for the association remains held on those trusts; a mortgage over it remains; a lease continues on its terms; a debt secured on the truck follows the truck. The incorporated association simply takes the place of the former holder. Where the association holds property on trust, whether from before incorporation or afterwards, section 37 lets a person authorised by the committee apply to the National Court for an order authorising disposal of the property where the trusts have “come wholly or partially to an end” or “become unduly onerous”, or where disposal otherwise appears proper, and the Court may direct how the proceeds are applied. That is the route for an association stuck with land it can no longer use for the purpose it was given.
Registered land
Section 15(2) deals with land under the Land Registration Act (Chapter 191) and the Land Act 1996. The Registrar of Titles “must without formal transfer and without fee, on application by the incorporated association, enter or register the incorporated association in the appropriate register and on the grant, certificate of title, lease or other instrument evidencing title to the land as the owner”. The application should be accompanied by the certificate of incorporation, the title, and evidence that the land was held for the association (the trust deed, the rules, or a statutory declaration by the former trustees). No transfer instrument, no stamp duty on a transfer and no registration fee are payable. The former trustees do not need to sign a transfer, which matters when one of them has died or left.
Customary land is different. It is not registered land and cannot be owned by an association; a landowner association’s interest in customary land, if any, is contractual or through an incorporated land group. See landowner groups.
Property acquired after incorporation
Once incorporated, the association acquires property in its own name under the general powers in section 14, including the express powers to hold, purchase, sell, mortgage and lease land, borrow, and give security. Contracts to acquire property are made in the manner section 36 prescribes. Property should never again be put in an individual’s name “for” the association; if it is, the association’s remedy is a claim that the holder is a trustee, and the holder’s creditors or heirs may dispute it.
On removal from the register and restoration
When an association is removed from the register its property is dealt with under sections 372 to 375 of the Companies Act 1997, applied by section 113: it vests in the Registrar, who may deal with it and must account for it. If the association is later restored, section 118 applies section 381 of the Companies Act so that the property revests in the association as if it had never been removed. Liabilities are unaffected by removal (section 114). See removal from the register.
On winding up
On a winding up the surplus after debts is distributed as the members resolve by a two-thirds majority, subject to the National Court finding the distribution just; a public benefit association’s surplus may only go to another public benefit association (section 143). Members have no right to the property while the association exists, and section 61 confirms they are not liable for its debts. See surplus assets.
List every asset held for the association and who holds it; lodge the section 15(2) application at the Titles Office for each parcel of registered land; transfer vehicle registrations and bank accounts into the association’s name, producing the certificate; and record the assets and liabilities in the accounting records, which section 73(2)(d) requires.
Sources
- Associations Incorporation Act 2023 — ss 3 (“property”), 14, 15, 36, 37, 61, 73(2)(d), 113, 114, 118, 143
- Land Registration Act (Chapter 191)
- Companies Act 1997 — ss 372–375, 381
Before relying on anything here, read the current text of the Associations Incorporation Act 2023 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.