Compulsory Acquisition of Land in Sydney
COMPULSORY ACQUISITION OF LAND
Do You Really Own Your Land?
You’ve worked hard to buy property, managed to obtain finance and maybe even paid out your mortgage. However, do you really absolutely own your land?
Compulsory acquisition of land (also known as ‘resumption’) refers to the right of the Government or a delegated authority to acquire land that is privately owned.
The right stems from the ‘doctrine of tenure’ adopted from English common law, meaning to hold or possess land ‘of’ or ‘from’ another; the principle being that all land belonged to the monarch, despite various grants.
Australian society has dramatically changed since adopting the common law but the principle remains. As a result, ownership of land in Australia is subject to the right of the Government to ‘take back’ or acquire the land or part of it.
This all sounds very radical but fortunately, the Constitution requires that any acquisition must be on ‘just terms’. In New South Wales, the Land Acquisition (Just Terms Compensation) Act 1994 (the ‘Act’) sets out the process, rights and responsibilities of Government authorities and owners when private land is acquired.
What is Involved in the Compulsory Acquisition Process?
Land may be acquired by private agreement between the acquiring authority and landowner, or failing agreement, compulsorily. The difference between the two processes is that when land is acquired compulsorily the Valuer General, as an impartial party, determines the compensation payable to the land owner.
The acquiring authority must provide written notice of its intention to acquire private land, triggering the acquisition process. Following this, the acquiring authority and owner may agree on an amount to be paid. It is beneficial to involve your Lawyer in these negotiations as he or she may recommend obtaining valuations or other evidence to support the value of the land.
The time for acquisition of the land is generally between 90 and 120 days after service of the notice. The notice sets out the requirements for vacating the land and the method for calculating compensation.
If agreement is not reached the compulsory acquisition still proceeds whilst the amount for compensation is determined by the Valuer General. The acquiring authority becomes the owner of the land once it publishes an acquisition notice in the Government Gazette.
Generally, a former owner may occupy the land until compensation is paid. If the land is the principle place of residence or the place of business, the owner may stay in occupation for up to 3 months after compensation has been paid with some arrangements allowing the land owner to stay longer.
The Valuer General calculates the compensation to be offered to the former land owner within 30 days of publication of the acquisition notice, and the acquiring authority advises the former owner. If accepted, the compensation is paid within 28 days.
The Right to Appeal
Compulsory acquisition is not unlawful and can rarely be avoided. Generally, the most feasible approach will be to ensure that the acquisition takes place fairly and compensation is in the most favourable terms possible.
In limited cases land owners may have legal cause to object to the acquisition. Appeals concerning the amount of compensation may be made to New South Wales Land and Environment Court within 90 days of receiving the compensation notice.
If you have an interest in property that is being resumed, please talk to us early. We can assist you in navigating the process and ensure that you are properly compensated for what is often an unexpected interruption and upheaval to your life.
Why is My Land Needed and Who May Acquire it?
Government agencies, local councils and state-owned entities have the right to acquire private land. The ‘acquiring authorities’ exercise their powers pursuant to specific legislation however the overall process in New South Wales must comply with the Act.
Land is acquired for public purposes such as installing or upgrading infrastructure, roads and public transport. Less frequently, land may be acquired because it is contaminated or considered to be a public risk.
If you receive an acquisition notice it is wise to involve a Lawyer immediately to ensure that your interests are protected and that you obtain the maximum compensation possible, which is your fundamental right.
How is Compensation Determined?
The amount of compensation should ‘justly compensate the person for the acquisition of the land’. Compensation will consider the land’s market value, any special value (attributable to the use of the land), losses in market value as a result of the acquisition, disturbance losses (legal and financial costs, valuation fees and stamp duty) and non-financial compensation based on inconvenience.
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