August 2019
If you’re one of the thousands of people facing the loss of your home or property by compulsory acquisition, do not despair. Although there are very limited grounds for stopping a compulsory acquisition, there is plenty you can do to make sure you get the highest price possible.
Have negotiations with a government authority to compulsorily acquire your property stalled because they won’t pay you just compensation? We’re all familiar with the iconic Australian film The Castle where a David and Goliath battle between an Aussie family and the government that went all the way to the High Court in order to acquire their home which they called their castle.
You can avoid the stress and uncertainty by contacting the experts at Ferrer Lawyers. We use our knowledge and experience to guarantee a higher price for you. Don’t guess or let the bureaucrats push you around. Make the call and find out what your property is really worth.
What is compulsory acquisition?
In NSW compulsory acquisition is a statutory process under the Land Acquisition (Just Terms Compensation) Act 1991 (“Act”) which sets out the process that government must follow when it is necessary for it to acquire property using a compulsory process.
Can I check to see if my property is listed for compulsory acquisition?
If a federal, state or local government authority (“Acquiring Authority”) has a plan to acquire your property it can be found on a government database called the Central Register of Restrictions.
How will I be notified?
You will receive a letter from an Acquiring Agency outlining, amongst other things, details of your Personal Manager, Acquisition Manager, the valuer who will inspect your property and provide a valuation which will form the basis of a formal offer to purchase your property.
By law, the Acquiring Authority must spend at least six months to make a bona fide attempt to come to an agreement with you.
The Acquiring Agency may recommend that you engage a lawyer for advice and instruct a qualified independent valuer to value your property. The legal and valuation fees incurred by you are 100% reimbursable on settlement. We recommend you instruct a lawyer as soon as possible after receiving notification from an Acquiring Authority that wants to purchase your property.
Personal Managers
The Acquiring Authority will assign a Personal Manager as your primary point of contact throughout the process. They are supposedly to provide support and assist you through the process as well as manage your relocation. They will insist that you don’t need a lawyer or valuer and they will take care of everything for you.
Don’t be fooled. Personal Managers don’t have your best interests at heart and ultimately work for the government.
Acquisition Managers
The Acquiring Authority will appoint an Acquisition Manager who will carry out the property purchase and answer any technical questions about the process. Acquisition Managers also work for the government and certainly don’t have your best interests in mind.
How does the Acquiring Authority value my property?
Compensation is determined in accordance with the Act. The defined heads of what amounts to “just compensation” and matters to be considered when determining compensation are:
- the market value of the land on the date of acquisition;
- any special value of the land to the owner on the date of acquisition;
- any loss attributable to severance;
- any loss attributable to disturbance;
- the disadvantage resulting from relocation (formerly called solatium) up to a maximum of $75,000 in NSW; and
- any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired.
What are my options?
The Acquiring Authority must have a legitimate basis for acquiring your property, namely, for a public purpose that is disclosed to you. This is evidenced in the Proposed Acquisition Notice (“PAN”). If the PAN does not include these details, the acquisition can be challenged and overturned. However, it is very rare to successfully challenge a PAN.
Most property owners prefer to avoid challenging a PAN and focus their resources on obtaining higher compensation for their property.
From experience, we find that engaging a lawyer and expert valuer from the beginning or early in negotiations will always get you higher offers. Our trusted valuers know what to look for, how to address and present the information in their valuation to obtain the best price for you.
Under the Act, the Acquiring Authority is required to pay your legal costs, valuation fees, financial and stamp duty costs.
What if we don’t agree?
If you don’t agree with the initial offer made by the Acquiring Authority, your property will then be compulsorily acquired. Once your property has been marked for compulsory acquisition, you will receive a PAN from the Acquiring Authority.
If a compulsory acquisition has proceeded to the point of issuing a PAN, it will be recorded on the title of your property.
When a PAN is issued the Valuer General gets involved to determine the amount of compensation. The PAN gives you 90 days or less before the Acquiring Authority publishes an acquisition notice in the NSW Government Gazette and ownership of the property transfers to the government. Your legal and equitable interests in the property are converted to an entitlement to compensation. However, negotiations can continue throughout this stage.
NSW Land and Environment Court
If you are not satisfied with the Valuer General’s compensation amount, you can file an objection with the NSW Land and Environment Court (“Court”) which must be lodged within 90 days from the issue of the PAN.
Within 28 days after the Acquiring Authority is given notice of your proceedings before the Court, you are entitled to an advance payment equivalent to 90% of the Acquiring Authority’s compensation notice. The government will also pay interest on the advance from the date of the acquisition notice in the Government Gazette to the date that payment of the advance is made. If you don’t accept the advance, the advance and interest will be deposited into a trust account pending the Court decision.
At the hearing, the Acquiring Authority is not bound by its original offer of compensation and may seek a lesser amount. However, the original offer will remain open for acceptance until the Court makes a ruling. Also, as long as you’ve acted reasonably and without unnecessary delay or expense in pursuing the Court proceedings, you will be entitled to recover the costs of the proceedings.
Statistics
Between 2012 – 2016 the NSW government acquired 1,713 properties, an average of 428 per year. Of these, 1,403, or 81% were acquired by way of agreement.
Most disputed cases are resolved before they go to hearing. Interestingly, between 2007 and 2016, in 58 disputed cases the average level of compensation ordered by the court was almost 58% higher than the initial offer.
In urban residential properties, the average compensation ordered by the Court was almost 33% higher. In 16 cases involving rural residential land, the Court’s determination of compensation was on average 42% higher than the previous offer.
How do we get more compensation for your property?
A study has found that owners who obtained legal advice and challenged the Acquiring Authority’s initial offer from the government settled at a significantly higher price. It follows that to get a higher price for your property:
- Gather as much information from the Acquiring Authority about the proposed acquisition.
- Instruct professional legal advisors to ensure the Acquiring Authority is complying with proper procedures under the Act.
- Instruct expert independent valuers who are highly respected by the government to ensure that you have been offered just compensation.
You’re not powerless when you know your rights and claim just compensation from the government. Experienced legal advice is free for those facing compulsory acquisition of their property as the Acquiring Authority is required by law to pay your bills.
The contents of this article is intended to provide a general guide to the subject matter of Compulsory Acquisition and does not constitute legal advice. Ferrer Lawyers always recommend that you contact our expert advisors experienced in Compulsory Acquisition matters. Our trusted independent and professional valuers are highly respected by the government, a necessary prerequisite to protecting your rights, interests and securing the highest value for your property. Owners facing compulsory acquisition should call (02) 8823 3588 or email us with your enquiry at This email address is being protected from spambots. You need JavaScript enabled to view it. for further information, guidance or assistance.