Compulsory Acquisition

Oct 12, 2016

The ins and outs of compulsory acquisition

The NSW government is currently undertaking a number of ambitious infrastructure projects across Sydney including the WestConnex motorway, the new Northern Beaches Hospital and the long-awaited Badgerys Creek Airport.

As it carries out these major works, the government has sought to compulsorily acquire numerous properties across the city, sparking media debate, community protests and even threats of legal action from impacted residents.

With up to 400 compulsory acquisitions said to be underway, and more likely in the future, it’s important to be clear about when the government can acquire property without your consent, and what rights you have as an owner or tenant.

What is compulsory acquisition?

Simply put, compulsory acquisition is when an authority, usually a state government or the Commonwealth, acquires privately owned land or property.

As is the case in Sydney at present, the power is usually exercised to build infrastructure like roads, public transport or utilities. In the recent past, it has been used in Sydney to make way for projects like the Cronulla desalination plant, and the M2 and M5 East motorways.

The reason the Commonwealth can forcibly take your property is that it has the legal right under Section 51(xxxi) of the Constitution of Australia, while the states are similarly empowered under relevant state legislation.

What is the process?

According to law firm Slater and Gordon, the government, often called the “acquiring authority” in such cases, must follow a number of steps before acquiring your house.

Crucially, it must provide you with notices regarding the acquisition followed by an offer of compensation, the amount of which is determined by the relevant valuer-general.

In the case of WestConnex, some property owners have reportedly been given 90 days to accept compensation, or else object via the Land and Environment Court.

Once the legal process of compulsory acquisition starts it’s unlikely to be halted unless something illegal has taken place, making it all the more important to know your rights as a property owner.

What am I entitled to?

The amount of compensation you’ll receive depends on factors like the land’s market value, any special value it may have, and expenses you incur due to the acquisition, according to Slater and Gordon.

You may also be entitled to planning compensation, the law firm says, if the value of the land drops because it’s reserved for compulsory acquisition, or loss on sale compensation if you receive a lower sale price due to the slated acquisition.

Gadens lawyer, Jodie Wauchope, has a key piece of advice for those facing compulsory acquisition — make sure you get market value for your property.

“Acquiring authorities such as Roads and Maritime Services or councils are required to pay market value as well as compensation for other associated costs,” Wauchope says in a recent blog post.

“Appoint a reputable valuer who knows the area and who can consider the value of any special features of your property. Valuation fees reasonably incurred are paid by the acquiring authority.”

She also emphasises accessing all possible compensation, and urges seeking out assistance from a legal professional.

“Aim to be fairly compensated for your relocation and other costs, this is what is required by the law,” Wauchope adds.

“There are a range of costs that can be claimed in the process. Be armed with quotes from removalists, service providers and others.”