Proof that it’s worth challenging government’s compulsory property acquisition
Thousands of people in NSW are facing having their homes and property compulsorily acquired by the government in 2017, under the Land Acquisition (Just Terms Compensation) Act 1991. The law does not allow home owners to stop the government taking their home if it is needed for a major state project, but there is plenty you can do to make sure you get the best possible deal.
According to the 2016-17 budget estimates, over the previous four years the NSW government acquired 1,713 properties, an average of 428 per year. Of these, 1,403 – or 81% – were acquired by way of agreement with the government department acquiring the property.
Higher property prices obtained by challenging government’s initial offer
New analysis by the NSW Parliamentary Research Service, Compulsory acquisition of land: A brief legislative and statistical overview, has found that home owners who obtained legal advice and challenged the initial offer from the government settled at a significantly higher price.
When an owner challenges the government’s initial offer, the matter goes to the independent office of the Valuer General to determine compensation for the property owner. The property owner can then challenge the Valuer General’s determination in the Land and Environment Court.
Most disputed cases are resolved before the case gets to a court hearing. But the analysis suggests it’s worth fighting it out to the end. In 58 disputed cases between 2007 and 2016 that went to a court hearing, the analysis found that the average level of compensation ordered by the court was almost 58 per cent higher than the initial offer.
Urban and rural residential properties
In urban residential properties, the average compensation ordered by the court was almost 33 per cent higher. In 16 cases involving rural residential land, the court’s determination of compensation was higher than the previous offer to the tune of around 42 per cent on average.
That is a huge difference and shows that those facing a compulsory acquisition order would be wise to challenge the initial offer. (More information can be found in our earlier article, Compulsory acquisition of your property: stand up for your rights and don’t let yourself be bullied.)
Government pledges more generous compulsory acquisition process
The government has announced a “more generous” acquisition arrangement, but it remains to be seen how this will work.
The government delayed releasing a report that was highly critical of the land acquisition process for almost two years while it pushed through major acquisitions for infrastructure projects. (See Review of the Land Acquisition (Just Terms Compensation) Act 1991 and the government’s response to this report.)
It was only after the delay in releasing the report was exposed publicly that the government announced changes to the compulsory acquisition laws.
“Personal manager” to be appointed for each compulsory acquisition
The government promises a “personal manager” for each homeowner who is having their home taken away from them, and presumably they will argue that owners don’t need their own lawyer now as they will do all the work for you. However, these “personal managers” will undoubtedly be on the payroll of the government and will therefore have a conflict of interest.
The government is also promising six month waiting periods before the owner has to negotiate. This happens anyway and negotiations usually don’t start until the deadline is almost upon the owner to make them panic and accept the deal which is being offered to them.