Compulsory land acquisition reforms: a more ‘caring’ approach

WHO SHOULD READ THIS

• Land owners, residents, residential tenants and businesses who have been or may be affected by government projects which require compulsory acquisition of land.

THINGS YOU NEED TO KNOW

• Changes to the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) have been adopted by the NSW Government. These changes will make the system of compulsory land acquisition fairer for land owners. Some reforms will operate retrospectively.

WHAT YOU NEED TO DO

• If you have suffered a disadvantage resulting from relocation, you may be eligible for further compensation, backdating to 26 February 2014. McCullough Robertson can assist with entitlement to increased compensation or navigating the compulsory acquisition process.

On 14 November 2016 the NSW Government amended the Land Acquisition (Just Terms) Compensation Act 1991 (NSW) (Just Terms Act) to make the process of compulsory land acquisition fairer, more transparent and customer-friendly for land owners.

Background

In 2012, the NSW Government commissioned David Russell QC to undertake an examination of the Just Terms Act (Russell Review). The Russell Review, delivered in 2014, made 20 recommendations for reform of the compulsory land acquisition legislation.

Earlier this year, the NSW Government commissioned Customer Service Commissioner, Michael Pratt AM to undertake a review of the compulsory acquisition for landowners and residents (Pratt Review).

On 18 October 2016 the NSW Government responded to the Russell Review and Pratt Review and has agreed to a number of recommendations.

What are the changes to the Just Terms Act?

The key legislative changes include:

• compensation for non-financial impacts (referred to as ‘solatium’ under the Just Terms Act) will increase from a maximum of $27,235 to $75,000. This increased compensation will apply retrospectively to acquisitions settled on or after 26 February 2014. Landowners or tenants can make an application for backdated compensation
• land owners remaining in their property following acquisition will not be required to pay rent for the 90 days they are entitled to remain in the property after acquisition
• land owners will have a legislated six month negotiation period before compulsory acquisition can commence, unless otherwise agreed
• land owners will need to make their claim for compensation to the Valuer-General as opposed to the acquiring authority
• the Valuer-General will be required to provide a copy of the determination of the amount of compensation to the acquiring authority and former land owner at the same time
• acquiring authorities must provide the Valuer-General with a list of issues relevant to the determination of the amount of compensation within seven days of the compulsory acquisition
• the time for issuing compensation notices will be extended from 30 to 45 days, or up to 90 days with agreement of the Minister for Finance, Services and Property. This will allow the Valuer General more time to undertake complex valuations
• where land is used for a limited specific purpose and the land owner intends to continue that use, the market value of that land will be taken to be the reasonable cost to the owner of equivalent reinstatement in some other area, and
• land owners will be entitled to first right to repurchase the property based on the market value of the property unless:
  • more than 10 years has elapsed since the acquisition
  • substantial improvements have been made to the land by the authority, or
  • the land is Crown land or the land is required for another public purpose.

Conclusion

The amendments will improve communication, reduce disputes and increase the accountability of government agencies that are acquiring land.

It is important to note that land owners and residential tenants may be eligible for further compensation in relation to non-financial impacts associated with a compulsory acquisition if the acquisition was settled on or after 26 February 2014.

This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.