As Infrastructure Grows, is your Property in the Government’s Sights?
In NSW, all levels of government can acquire privately owned land for “public purposes”. They may
take the whole property, part of a property or an interest in the property including easements for
power lines, sewer or water.
Usually, privately owned land is acquired by negotiation and agreement between the land owner
and the acquiring authority. When there is an agreement it will usually involve an agreed purchase
price and the Valuer General is not involved.
Normally, the acquiring authority has a period of 6 months to achieve an agreement before
compulsory acquisition is an option. When negotiating the amount of compensation to be paid, the
law requires consideration of the following factors:
- the market value of the land on the date of its acquisition,
- any special value of the land to the person on the date of its acquisition,
- any loss attributable to severance,
- any loss attributable to disturbance,
- the disadvantage resulting from relocation,
- any increase/decrease in the value of any other land of the person at the date of acquisition
which adjoins or is severed from the acquired land as a result of the acquisition.
Compulsory Acquisition and the role of the NSW Valuer General
When an acquiring authority and land owner are unable to negotiate the purchase of the land, an
acquiring authority can compulsorily acquire land for a public purpose. The Valuer General is
required to independently determine the amount of compensation to be paid by the acquiring
authority to the former land owner.
Step 1: Proposed Acquisition Notice
An acquiring authority cannot compulsorily acquire land unless a Proposed Acquisition Notice has
been given to the land owner. The proposed acquisition notice includes:
- a description of the land
- the authority of the State proposing to acquire the land
- the period of time in which the land will be compulsorily acquired.
Negotiations regarding the purchase may continue during this stage of the compulsory acquisition
process. If agreement is reached, the matter is finalised by a contract and transfer, or by a formal
Step 2: Section 39 Claim for Compensation Form
After the proposed acquisition notice has been issued by the acquiring authority, the land owner is
to completed the Claim for Compensation Form. This is the land owner’s opportunity to identify the
information, issues and concerns they want the valuer to consider when completing the valuation
report for the determination of compensation.
Step 3: Acquisition Notice
If the negotiation is not successful, the land will be compulsorily acquired by the acquiring authority.
This occurs when the acquiring authority publishes an Acquisition Notice in the NSW Government
Gazette. This normally occurs after 90 days from the issue of the Proposed Acquisition Notice.
When an acquisition notice is published, it means:
- the compulsory acquisition has been approved;
- the Valuer General is required to make a determination of compensation; and most
- ownership of the land transfers to the government.
As land owner, you are generally entitled to remain in occupation of any building that was your
principal place of residence or business for three months.
How is compensation determined?
When assessing the amount of compensation, a full valuation report is prepared by an independent
valuer. The land owner is afforded an opportunity to provide feedback regarding the Preliminary
report, which is then considered the by Valuer in providing a final report.
After the preliminary valuation report has been finalised , the report is issued to each party and the
report’s findings are adopted as the determination of compensation. This is the final part of the
Valuer General’s formal role in the determination of compensation process.
The Valuer General is required to provide the determination of compensation to the land owner and
acquiring authority within 45 days.
The acquiring authority must issue the land owner with a Compensation Notice which includes the
determination of compensation. The compensation notice officially notifies the land owner that the
land has been compulsorily acquired and provides the offer to pay the amount of compensation
determined by the Valuer General.
If you agree to the amount of compensation determined, the acquiring authority is required to pay
the amount to you within 28 days of receipt of a deed of release. Interest is payable on the amount
of compensation from the date the land is acquired until payment is made.
What if you disagree with the valuation?
If you are not satisfied with the amount of compensation determined by the Valuer General and
offered to you by the acquiring authority, you can lodge an objection with the Land and Environment
Court. Objections need to be lodged within 90 days of receiving the compensation notice. If an
objection is not lodged within 90 days the offer of compensation is deemed as accepted.