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Making a pre-acquisition compensation claim

in Property Law by Adrian McMillan on
Making a pre-acquisition compensation claim

In the previous blog, we explored the ways in which land owners and occupiers can claim compensation prior to an acquisition. In this post we discuss the rights to compensation under the Planning and Environment Act 1987 (Vic) (PEA) which are designed to put the claimant in a similar position to if their land was never reserved or shown to be reserved for a public purpose.

What are the two categories you can make your claim under PEA

The right to claim compensation under the PEA is usually triggered by one of two events:

  1. An application for a planning permit being rejected by Council because it is reserved for a public purpose; or
  2. The land being sold for less than it would have been worth without the land reservation in place.

What can trigger a ‘rejection’ claim

In the first category, a claim is usually made after the following steps have been taken:

  1. 2 sets of plans drawn up with respect to the land, the “Before” plan imagining the land was not reserved for a public purpose and the “After” plan taking that reservation into account
  2. The “Before” plans are lodged with an application for a planning permit with the relevant local council and rejected on the basis that the land (or part of it) is reserved for a public purpose
  3. The “After” plans lodged with the council and approved
  4. A valuation prepared that examines the value of the land in the ‘Before’ and the ‘After’ scenario
  5. A claim made based on the difference between the Before and After values

When can you claim compensation under ‘loss on sale’ category

In this category, a land owner has to give the relevant planning authority (usually the local Council or VicRoads) 60 days’ notice of their intention to sell the land. The land is then sold and a valuation of the land without the reservation is undertaken. The loss of the claimant is demonstrated by the difference between the theoretical valuation and the actual sale price.

It is important to note that as with a compulsory acquisition, a claimant’s professional expenses, including legal, valuation and town planning expenses, incurred in the course of preparing and submitting the claim form part of the claim for compensation.

If your land is the subject of a planning control that reserves it for a public purpose, even if that planning control has not yet been incorporated into the relevant planning scheme, it is important to seek legal advice. You may be entitled to significant compensation for the loss suffered as a result of that blight on your land, however this entitlement will only be realised by taking active steps to trigger the entitlement to compensation.

Where do you start with a compensation claim?

Sometimes triggering a right to compensation can involve some homework – we can advise and help you through the process so that you can trigger rights immediately rather than waiting indefinitely for a compulsory acquisition to occur.

To discuss a matter with us, you can contact us here.