In brief

Under the provisions set out in the Land Acquisition and Compensation Act 1986, land required for a public purpose can be acquired/resumed by government departments and agencies. This can be done either compulsorily or by negotiation.

What you need to know

  • The compulsory acquisition of land involves a Governmental Authority (“Acquiring Authority”), compulsorily acquiring land and all interests attached to the land.
  • The process under which land is compulsorily acquired is governed by the Land Acquisition and Compensation Act (Vic) 1986 (“Land Acquisition Act“).
  • Depending on the circumstances the Government or an authority can acquire your land.
  • Properties acquired are used for future roads/freeways, railways, road widening/deviations, parks, reservoirs, sewerage works, drainage reserves etc.
  • If the land is not acquired within six months of service of the Notice of Intention to Acquire, the notice lapses.
  • While it is possible to make a counter offer to the initial offer received from the Acquiring Authority, there are a number of important legal factors to consider in relation to the independent valuation, understanding your rights and potential compensation claims, which can be complicated and costly.

Key points

1.  How will you know your property is being acquired?

You will receive a “Notice of Intention to Acquire” the property from the Acquiring Authority (often being VicRoads, the State Government or a Council). This document will provide information about why your property is being acquired, and the approximate date of when the proposed land is to be acquired.

2.  What can you do with your property once you have been served with a Notice of Intention to Acquire?

Once you receive a Notice of Intention to Acquire you cannot sell or enter into a new lease for the property.

3.  How long after the Notice of Intention to Acquire will my land be acquired?

The Acquiring Authority has six months to acquire the land after serving the Notice of Intention to Acquire. If they do not acquire your property within six months, the Notice of Intention to Acquire lapses.

If the Acquiring Authority does acquire your property, a notice will be published in the Government Gazette. The date of this publication is the date of acquisition.

4.  What happens if the Acquiring Authority does not go ahead with the acquisition?

You can claim any reasonable loss or damage from the Acquiring Authority that you have incurred due to the service of the Notice of Intention to Acquire.

5.  What happens if the Acquiring Authority does go ahead with the acquisition?

You will receive an offer of compensation within 14 days from the notice being published in the Government Gazette. This will include a certificate of valuation and an explanation as to any difference between the offer and the valuation.

6.  Do I have to accept the offer?

No, you can make a counter offer in the form of a Notice of Claim. You should obtain your own valuation and legal advice to support your counter offer.

7.  Will the Acquiring Authority pay for my legal fees?

You are entitled to have your reasonable legal fees for obtaining advice with regards to the acquisition and a valuation paid for by the Acquiring Authority.

8.  What factors should be considered for compensation?

The following factors are considered for compensation:

  • the market value of the property on the date of acquisition
  • any special value to the claimant on the date of acquisition – the advantage (in addition to market value) to a claimant which is incidental to his ownership or occupation of that land, e.g. a blacksmith who has a property adjoining a racetrack may have special value that is not relevant to most purchasers of the land
  • any loss attributable to severance – means the amount of any reduction in the market value of any other interest in the land (or in other land) which is caused by its severance from the land, e.g. if a portion of the property is taken, market value compensation may not effectively compensation for the depreciation of the portion of the land not taken
  • any loss attributable to disturbance – pecuniary loss suffered as a result of the natural, direct and reasonable consequence, e.g. relocation costs
  • any legal, valuation and other professional expenses necessarily incurred by the claimant by reason of the acquisition of the interest
  • Solatium – intangible amounts (not exceeding 10% of market value) which include the following:
  • the length of time you have occupied the land;
  • the inconvenience being removed from the land;
  • the period of time you were likely to have continued to occupy the land if it weren’t for the acquisition; and
  • your age and circumstances and that of those who live with you.

9.  What if the Acquiring Authority and I cannot agree on compensation?

The matter becomes a disputed claim and the matter will be heard by VCAT or the Supreme Court.

Conclusion

Compensation awards for compulsory acquisitions are complicated and could be costly. You should consult a lawyer to understand your rights and potential claims for compensation relating to compulsory land acquisition.

About the Author

Catherine Ballantyne

Partner
A business disputes specialist, Catherine is a trusted advisor to businesses and individuals in obtaining successful outcomes. Businesses rely on Catherine as a trusted advisor as well as lawyer in guiding them through complex litigation and disputes.

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