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A quick guide to hardship in compulsory acquisition

October 23, 2020
Flo Mitchell

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Hardship applications are useful if your land has been zoned for compulsory acquisition to occur at a time in the future, but you want to sell your land now. 

Without hardship applications, the government acquires land on its own timeline, which can be many years in the future under the Just Terms Act

Land zoned for compulsory acquisition, such as public infrastructure or public parks, can be  difficult to sell on the open market. Typically, potential buyers don’t want to buy a home that’s zoned to be forcibly purchased from them by a government authority. 

Fortunately, the law outlines the process of hardship applications which allows landowners to force the government to purchase their land within 90 days. 

What Is Hardship

To be granted hardship, the property owner must be either unable to sell the land, or unable to sell the land at market value. 

An inability to sell the land can be proven by:

  • a letter from a real estate agent explaining the reasons why a sales campaign would be inappropriate, or
  • proof from a licensed real estate agent or property marketing website (e.g. Domain) showing an unsuccessful attempt to sell the land.

Furthermore, the property owner must need to sell the land or part of it without delay:

  • for a pressing domestic, social or personal reason (e.g. need to move interstate for work), or
  • to avoid the loss of income, or
  • to avoid a substantial reduction in income.

An unwillingness to sell the land is not considered to be an inability to sell the land.

Hardship Decision

The acquiring government authority (e.g. Roads and Maritime Services) will receive your hardship application and decide on it.

Compensation for your land must take into account any special value of the land, any loss attributable to severance or disturbance, and disadvantage that resulted from relocation. 

This is typically the stamp duty on the value of the land, and around $81,000 for having to relocate. 

If your hardship application is rejected, it can be reviewed (see below). 

Another possible outcome is that the acquiring authority may decide to remove the compulsory acquisition designation on your land. This means your land’s previous zoning would be reinstated. 

Legal Costs

The law states that legal fees are recoverable from the date that your hardship application has been accepted. They will be reimbursed to you by the government authority acquiring your land. 

Reviewing a Hardship Decision

If your hardship application is rejected, it can be reviewed by the Department of Planning, Industry and Environment (DPIE), i.e. the decision can be appealed. 

The review application must be submitted within 28 days of the hardship application being rejected. 

The DPIE decision is final.

Sydney Morning Herald

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