Australia: NSW land acquisition update – favouring the dispossessed landowner

Last Updated: 23 December 2017
Article by Dennis Loether

If your Council is involved in an acquisition, it is imperative you are aware of recent amendments to the Land Acquisition (Just Terms Compensation) Amendment Act 2016 (the Act).

These amendments not only have the effect of increasing the amount of compensation payable to dispossessed landowners, but they add further obligations in the acquisition process.

The amendments are designed to further assist dispossessed landowners while they are also aimed at making the acquisition process more transparent. With that in mind, following is a summary of the 6 key changes to the Act:

  1. Changes to negotiation period
    Under Section 10A of the Act, State authorities, before issuing a proposed compulsory acquisition notice, are now required to make an attempt for at least 6 months to acquire the land by agreement.

    This is consistent with the overall objective of encouraging resolution of acquisitions by agreement. You may only shorten the 6 month period in exceptional circumstances. You will need the approval of both the responsible Minister and the concurrent approval of the Minister responsible for the Act.

    The obligation to attempt to acquire the land by agreement for at least 6 months does not apply to:

    • acquisition of crown land; or
    • an acquisition of easements and rights to use land (or a tunnel) under the surface; or
    • an acquisition from an owner who cannot be located or who declines to negotiate.

    The owner of the land and the State authority can of course agree to a shorter, or longer, period of negotiation.

    It is also important to note that following the giving of a proposed compulsory acquisition notice, negotiations may continue during the standard minimum period of 90 days before the land can be compulsorily acquired

  2. Increased compensation
    Disadvantage from relocation
    The amount of compensation payable for non-financial disadvantage resulting from relocation has increased pursuant to Section 60(2) of the Act.

    The definition of solatium has been replaced with the term disadvantage resulting from relocation. The maximum amount payable, arising from the necessity of a person to relocate his or her principal place of residence as a result of the acquisition, has increased from $27,235 to $75,000.

    Of course this head of compensation is in addition to other matters that include the market value of the land being acquired, and legal and valuation costs.

    The amount will be increased on 1 July each year in accordance with increases in the Consumer Price Index. The increased compensation payment will also apply retrospectively to former residential landowners and tenants whose acquisitions were settled on or after 26 February 2014.

    Market value
    Fundamentally the definition of market value has not changed as contained in section 56(1) of the Act.

    There is however a new subsection, 56(3) which allows for the market value of the land to be adjusted where the land has a special value for a particular purpose for the landowner.

    Accordingly:
    • if the land is for a particular purpose; and there is no general market for land use for that
    • purpose; and
    • the owner genuinely proposes to continue after the acquisition to use other land for that purpose, then

    for the purpose of paying compensation, the market value of the land is taken to be the reasonable cost to the owner of equivalent reinstatement in some other location.

    That cost is to be reduced by any costs for which compensation is payable for loss attributable to disturbance and by any likely improvement in the owner's position because of the relocation.

  3. Hardship review
    Introduction of a merits review of owner initiated acquisition in case of hardship is pursuant to Section 27A of the Act. Division 3 of the Act has not changed. It allows the owner of land to require the State authority, by notice in writing, to acquire land if:
    • the land is designated for acquisition by that authority for a public purpose; and
    • the owner considers that he or she will suffer hardship if there is any delay in the acquisition of the land under the Act.
    What constitutes hardship isn't always clear but the Act provides hardship means:
    • the owner is unable to sell the land, or is unable to sell the land at its market value, because of the designation of the land for acquisition for a public purpose; and
    • it has become necessary for the owner to sell all or any part of the land without delay for pressing personal, domestic or social reasons, or in order to avoid the loss of income.

    Landowners may now seek a review of unsuccessful hardship applications.

    The new section 27A provides the mechanism for review. In summary, it provides:
    • an owner of land who has given a notice requiring the authority to acquire the land may apply to the Secretary of the Department of Finance, Services and Innovation for a review of a decision of the authority not to acquire the land because:
      1. the land is not designated by the operation of this Division for acquisition by the authority for a public purpose, or
      2. the owner will not suffer hardship if there is any delay in the acquisition of the land, or
      3. the authority is not otherwise required under this Division to acquire the land.

    The application will be sent to a reviewer for determination. The reviewer is to be a suitably qualified person appointed by the Minister who is not associated with the authority of the State or the applicant.

    The reviewer will either quash the decision or if not so satisfied, confirm the decision.

    The reviewer is to endeavour to determine the application within 28 days after the application is referred and the decision of the reviewer is final.

  4. Land not required for acquired purpose being offered first to its former owner

    If during a period of 10 years after the acquisition, the acquiring authority proposes to dispose of land because it is no longer required for the public purpose for which it was acquired, there is an opportunity for the former owner to reacquire the land.

    Under Section 71A of the Act, the acquiring authority must first offer the land for sale to the former owner at the market value of the land at the time the offer is made. There is however a rider to the requirement to offer the land to the new owner in that the new section adopts the words "if practicable". This is important as, for a number of reasons, it might not be practicable to do so.

    Further, the offer is not required if:
    • the authority has made substantial improvements to the land;
    • the land is crown land; and
    • the land is proposed to be disposed of to another authority of the state for a public purpose.


  5. Post acquisition occupation

    Under Section 34 of the Act, a person who was in lawful occupation of land immediately before it was compulsorily acquired and to whom compensation is payable, is entitled to remain in occupation until the compensation is paid to that person or the authority makes the advance payment of not less than 90% of the amount of compensation offered by the authority.

    At present, a person can also remain in occupation of a building that is the person's principal place of residence, or the person's place of business, for 3 months after it is compulsorily acquired, even though that person ceases to be entitled to remain in occupation.

    Previously, rent could be charged by the acquiring authority from the date of acquisition until the former owner vacates.

    The amendment now provides that rent is not payable during the relevant 3 month period after acquisition by a former owner who remains in occupation of any part of a building that is the person's principal place of residence, pursuant to Section 34(A) of the Act.

  6. Strengthening the role of the Valuer-General (VG)
    There are several changes aimed at strengthening the role of the VG.

    Claims for compensation can now be lodged with either the acquiring authority or the VG. The other requirements as previously detailed in section 39 of the Act, for example, that the claim be in the form prescribed by the regulations remain unchanged but for an added qualification. The qualification is that as soon as is practicable after a State authority or the VG receives a claim for compensation, they must provide each other with a copy of the claim.

    The acquiring authority must provide the VG with a list of issues that the authority believes are relevant to the determination of the amount of compensation.

    The list must be provided within 7 days after the authority has compulsorily acquired the land. The government has also encouraged landowners to provide information in support of their claim as soon as is practicable to the VG. Of course, the VG will not be confined to consideration of those issues alone.

    The VG will now be required to provide the compensation determination, including a land valuation report, directly to the former landowner at the same time as the acquiring authority.

    The period for the determination has been increased from 30 to 45 days, under Section 42(1) of the Act. The period commences from the publication of the acquisition notice.

A Summary and Lessons
So these are the impacts of the changes that have come into effect.

For acquiring authorities, you will need to ensure you are on top of timeframes when compulsorily acquiring properties. This also needs to be factored into timeframes for completion of projects.

The overriding benefits of the reforms are in favour of the dispossessed landowner. Rent exemptions, more time to negotiate, more compensation, potential right to re- purchase land no longer required for acquisition, to name a few.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Coutts Solicitors & Conveyancers
Coleman Greig Lawyers
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Coutts Solicitors & Conveyancers
Coleman Greig Lawyers
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions