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Early land acquisition in cases of hardship

in Business Law by Andrew Young on

If you are suffering hardship because your property is earmarked for future compulsory acquisition, you may be able to have the relevant Authority purchase your property immediately.  

Legislation throughout Australia permits Government and other authorities to compulsorily acquire property from private owners for public purposes such as roads and other infrastructure projects. That legislation sets out a formal regime for compensating owners for the value of their land and associated expenses. Acquiring authorities may also acquire property by negotiation.

While major projects will be planned and announced many years in advance, acquisitions by the relevant authority usually only occur a short time before actual construction commences.

In the meantime, some property owners may find themselves in a very difficult position where they need to sell their property immediately but are unable to do so because potential buyers run a mile once they realise the property will be affected by the future development. 

The problem is not just limited to home owners, but also property developers whose plans have become unviable due to planning restrictions associated with future development or owners seeking to use their property as security for a loan who find the value of the property is now significantly reduced.

A solution

Various legislation and departmental policies provide that, in cases of hardship, the acquiring authority may agree to the early acquisition of such properties and payment of associated expenses such as legal fees, valuation fees and the costs of acquiring a replacement property.

To qualify, an owner will generally need to demonstrate:

  • their property has been identified, with a high degree of certainty, as required for a public purpose;
  • they have attempted to sell the property at fair market value but have been unable to do so because of the property’s designation as required for a public purpose;
  • it has become necessary for the owner to sell the land without delay due:
  • to pressing personal, domestic or social reasons (for example, serious illness or employment transfer); or
  • to avoid loss of income or substantial reduction in income;
  • where applicable, the value of the property as security for a loan has been impaired as a result of the property’s designation as required for a public purpose.

Property developers will generally need to demonstrate their proposed development has become unviable due to the proposed public project or:  

  • because development approval has been refused, or will likely be refused, due to the future public requirement;
  • because of conditions applied to their development approval due to the proposed public project.

How to improve your chances

To conserve financial resources, public authorities generally will not acquire properties until just before they are needed.

The more clearly you can demonstrate your special circumstances of hardship, and inability to sell due to the proposed public project, the better your chances of having your property acquired ‘ahead of the pack’.

Compensation paid by acquiring authorities under hardship applications usually mirrors the compensation which is available to property owners under formal compulsory acquisition legislation. In our experience, this compensation can be much more than the owners initially believe they are entitled to.

As reasonable legal costs are usually paid by the acquiring authority, it is worth engaging an experienced lawyer to advise you on what evidence you will need to stand the best chance of having the authority agree to an early acquisition and to formulate your compensation claim to ensure you claim the maximum amount.

Learn more about our land and compulsory acquisition services here.

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