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Compulsory Acquisition of Land—How it Works

Recent media reports regarding the necessary land acquisitions for the proposed Western Harbour Tunnel and Northern Beaches link have once again raised concerns for the many families and businesses which will be displaced.

Following the public outcry over the actions of authorities, and the treatment of displaced families and businesses, during the significant land acquisitions undertaken for the Westconnex and other infrastructure projects, the NSW Government commissioned the Russel Review of the Land Acquistion (Just Terms) Compensation Act 1991 (“the Act”) and the Pratt review of the processes involved in dealing with citizens whose properties were compulsorily acquired.  Each of those reviews recommended a number of changes be made to the legislation and processes in order to better support affected citizens.

In Late 2016, the NSW Government passed legislation amending the Act to adopt a number of the reforms recommended in each review, with the hope of simplifying the processes, and making the process more transparent.  Those amendments took effect on 1 March 2017.

Given the next round of significant land acquisitions is imminent, it is an opportune time to look at the steps involved in the process for compulsory land acquisition and identify the key matters to be considered by affected landowners.

Can the Government take my land?

Yes.  In NSW all levels of government including statutory authorities and local councils can acquire privately owned land for public purposes.  They can acquire all or part of your land, including acquiring an easement, as is necessary.

What is the Process?

  1. Negotiation –

Usually the first step in the process is negotiation.  The acquiring authority will approach land owners and seek to negotiate the purchase of their land voluntarily. As a result of the recommendations made in the Pratt Review, the acquiring authority will usually at this stage allocate a case officer to deal with the landowner throughout the process, including to act as a contact through any compulsory acquisition.

If agreement can be reached then the land is sold to the acquiring authority in the usual way.

If negotiation is not successful, then the compulsory acquisition process can be implemented.  One of the recent amendments to the legislation imposed a minimum 6 month negotiation period before the compulsory acquisition process can commence.

  1. Compulsory Acquisition
  • Proposed Acquisition Notice – is a written notice sent to the land owner advising that the acquiring authority intends to compulsorily acquire the land within a set period of time (usually 3 -4 months). Parties may continue to negotiate at this stage.
  • Claim for Compensation – within 60 days the landowner must submit an approved claim for compensation form to the acquiring authority and/or the Valuer General. Failure to lodge the form does not disentitle the landowner from receiving compensation for their acquired land. This form is intended to provide information to the Valuer General of matters the landowner wishes to be considered in the valuation process.
  • Acquisition Notice – After the expiration of the period identified in the Proposed Acquisition Notice, the acquiring authority will arrange for the Acquisition Notice to be published in the Government Gazzette. Upon publishing of the Notice the acquiring Authority becomes the owner of the land, and the Valuer General is required within a prescribed period (usually 45 days) to proceed to determine the compensation payable to the landowner.The Act makes provision for the landowner to be permitted to continue to occupy the land for a period in certain circumstances.  Previously rent was required to be paid by the landowner if occupation continued beyond this time, however the recent amendments have removed the requirement for payment of rent for up to 3 months.
  • Determination of Compensation – within 45 Days (although this may be extended) the Valuer General is to determine the compensation payable, and the acquiring authority is to provide the former landowner with a compensation notice offering to pay the amount of compensation determined by the Valuer General. It should be noted that before making the final determination the Valuer General will issue the parties with a preliminary valuation report and give the parties 15 days in which to provide feedback.
  • Appeal – the determination of the Valuer General is final. If the former landowner does not want to accept the compensation offer they have 90 days in which to lodge an appeal to the Land and Environment Court.

HOW IS COMPENSATION DETERMINED?

Naturally each of the above steps involves a number of processes and compliance with various legislative and other requirements, including meetings with the acquiring authority.

There are defined matters to be considered in valuing land, and determining the compensation payable.  At times these valuation and compensation principles can be contentious, especially when the acquiring authority seeks to acquire only part of the landowners land.

Matters to be considered include:

  • any special value of the land to the landowner;
  • any loss attributable to severance or disturbance; and
  • compensation for disadvantage resulting from relocation.

Further there are special provisions relating to valuing the land where the land had a development potential.

Should you find yourself subjected to a compulsory acquisition of your land, we recommend seeking legal advice and assistance at the earliest opportunity to ensure you obtain the maximum compensation payable.

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This communication is sent by Kreisson Legal Pty Limited (ACN 113 986 824). This communication has been prepared for the general information of clients and professional associates of Kreisson Legal. You should not rely on the contents. It is not legal advice and should not be regarded as a substitute for legal advice. The contents may contain copyright.