Hardship Cases Under the Just Terms Act: When You Can't Wait for Government Acquisition

If your property has been marked for future government acquisition – whether for a park, road widening, or transport corridor – but there's no timeframe for when this will actually happen, you may be entitled to force early acquisition under NSW's hardship provisions. Currently, these are among the most common compulsory acquisition matters being handled by specialist lawyers.

Understanding Hardship Cases: The Problem Explained

A hardship case arises because the government controls the timing of when designated land is actually needed. Your property might be marked for future public use, but there's often no accurate timeframe provided. The acquisition could be 20, 30, even 40 years away.

The Impact on Property Owners
The designation doesn't affect your current use of the property, but when you want to sell, you likely won't get fair market value. This creates a significant problem:

🔵 Buyers conducting proper due diligence will discover the future acquisition
🔵 Most buyers simply won't purchase property with acquisition hanging over it
🔵 You become trapped with an unsellable asset through no fault of your own
🔵 Your property's value and development potential are artificially suppressed

As noted in legal submissions to NSW Government reviews: "where land is reserved for future acquisition, this affects the landowner, the saleability of the land and its development prospects."

Your Legal Rights Under the Just Terms Act

Under Division 3 of the Land Acquisition (Just Terms Compensation) Act 1991, you have the right to apply for hardship acquisition if you can demonstrate that you cannot sell your property for fair market value due to the government designation.

Section 21: Notice Requiring Acquisition
The Act provides that an owner of designated land may require the acquiring authority to acquire the land if:

🔵 The land is designated for acquisition for a public purpose, and
🔵 The owner considers they will suffer hardship if there is any delay in acquisition

Section 22: Definition of Hardship
To qualify for hardship, you must demonstrate two key elements:

Element 1: Unable to Sell at Market Value
You are unable to sell the land, or unable to sell at its market value, because of the designation for acquisition.

Element 2: Pressing Need to Sell
It has become necessary to sell all or any part of the land without delay for:

Pressing personal, domestic or social reasons, such as:
🔵 Deceased estate settlement
🔵 Family divorce or separation
🔵 Interstate relocation for employment
🔵 Medical or health issues requiring relocation

To avoid loss of income, such as:
🔵 Mortgage stress and potential foreclosure
🔵 Business relocation requirements
🔵 Financial hardship requiring asset liquidation

Corporate Hardship (Different Requirements)
For corporations, hardship is more limited and typically requires selling to avoid:

🔵 Financial loss
🔵 A substantial reduction in income

Note: Public companies are generally excluded from hardship provisions

The Application Process

Step 1: Assessment with Specialist Lawyer
Before lodging any application, it's crucial to have your case professionally assessed. Experienced acquisition lawyers don't lodge applications that won't succeed – strong cases have a much higher success rate.

Step 2: Notice Requiring Acquisition of Land
You must serve formal notice on the acquiring authority using the approved form. Where there are multiple owners, all must sign the notice, though only one needs to demonstrate hardship.

Step 3: Evidence Requirements
Your application must include compelling evidence of both your inability to sell and your pressing need to sell:

Evidence of inability to sell may include:
1️⃣ Written opinion from a licensed real estate agent explaining why a sales campaign would be inappropriate
2️⃣ Documentation showing failed marketing attempts
3️⃣ Evidence that the designation limits potential purchasers or prevents successful sale

Evidence of pressing need may include:
1️⃣ Medical certificates
2️⃣ Employment relocation letters
3️⃣ Divorce proceedings documentation
4️⃣ Deceased estate documents
5️⃣ Financial statements showing mortgage stress

Step 4: Authority Decision (90-Day Timeframe)
The acquiring authority must acquire the land within 90 days of receiving your notice (or a longer agreed period), subject to their assessment that genuine hardship exists.

New Review Rights (Since 2017)

A significant improvement came into effect in March 2017 with the introduction of section 27A, which provides a statutory right of review if your hardship application is rejected.

Independent Review Process
If the acquiring authority rejects your hardship application, you now have the right to:

🔵 Request an independent review of the decision
🔵 Have your case assessed by an independent reviewer
🔵 Receive a final determination that provides closure

This amendment was specifically recommended in the 2013 review of the Just Terms Act by David Russell SC to improve transparency and fairness in hardship matters.

Current Government Guidelines (2025)

The NSW Government has established minimum requirements for hardship acquisitions that came into effect in 2024, ensuring:

🔵 Transparency in the assessment of applications
🔵 Consistency across different acquiring authorities
🔵 Fairness for property owners demonstrating genuine hardship

The NSW Government has established minimum requirements for hardship acquisitions that came into effect in 2024, ensuring:

Compensation in Hardship Cases

Market Value Guarantee
Compensation under the Just Terms Act is required to be on just terms and is guaranteed to not be less than the market value of your property, whether acquisition is by agreement or compulsory process.

Special value compensation
Severance or disturbance losses
Disadvantage resulting from relocation
Stamp duty costs

The Rationale
The Second Reading Speech for the Just Terms Act contemplates that it may not be appropriate to offer all forms of compensation where a property owner has to move for reasons unrelated to the designation over the land.

Important: Acquiring authorities must assess your individual circumstances and explain why any compensation component is not being paid.

Why Professional Representation is Essential

Hardship cases involve vulnerable property owners who are, by definition:

⚫️ Under financial and time pressure
⚫️ Ill-equipped to navigate complex acquisition processes
⚫️ Dealing with technically complex valuation issues

The Complexity Factor
Given the often lengthy time delay between the designation of land and its eventual acquisition, determining the highest and best use (absent the public purpose) is technically complex, typically requiring both town planning and valuation expertise.

Legal and Expert Costs
While the current law doesn't guarantee reimbursement of legal and expert costs for hardship acquisitions (unlike regular acquisitions), recent legal submissions have recommended this be changed to ensure these vulnerable landowners can access proper representation.

Success Rates and Practical Outcomes

Experienced acquisition lawyers report that properly prepared hardship applications have high success rates when the criteria are genuinely met. The key is thorough preparation and strong evidence supporting both elements of the hardship test.

Most matters resolve through negotiation with the acquiring authority, but having the legal protection of the hardship provisions gives property owners the strong bargaining position they need.

Current Designation Projects Affecting NSW Properties

With the NSW Government's significant infrastructure investment program, many properties across the state are affected by future acquisition designations:

Major Transport Projects

🛩️ Sydney Metro Western Sydney Airport
🚃 Parramatta Light Rail Stage 2 ($2.1 billion)
🚢 Western Harbour Tunnel connections
🚧 Various road widening projects across growth areas

Growth Area Designations
Many properties in Sydney's growth corridors have been designated for future road, rail, or public facility acquisitions to support projected population growth.

Time-Sensitive Considerations
If you believe you may have a hardship case:

Act quickly – financial circumstances and pressing needs can deteriorate rapidly
Gather evidence early – document your inability to sell and pressing circumstances
Seek specialist advice – hardship law is complex and requires expert assessment
Don't delay – the longer you wait, the more your financial position may worsen

How FM Legal Can Help: Hardship Case Specialists

At FM Legal, we run a specialist practice dealing with compulsory acquisition, and hardship cases are currently among the most common matters we handle. Our expertise in this complex area of law ensures that only strong, well-prepared applications are lodged.

Our Hardship Case Expertise

100% Success Rate on Applications Lodged: We don't lodge hardship applications that won't succeed. Every hardship matter we've handled has been successful because we only proceed with strong cases that genuinely meet the strict legal criteria.

Comprehensive Assessment: Before lodging any application, we thoroughly assess your case to ensure it meets both elements of the hardship test:

⚫️ Evidence of inability to sell at market value due to designation
⚫️ Demonstration of pressing need to sell for qualifying reasons

What We Do Differently

Pre-Application Evaluation: Unlike firms that take on weak cases, we carefully evaluate every potential hardship application. If your case doesn't meet the strict legal requirements, we'll tell you upfront rather than waste your time and money.

Evidence Gathering: We help you compile compelling evidence including:
☑️ Real estate agent opinions on saleability
☑️ Documentation of pressing circumstances
☑️ Financial evidence supporting your need to sell
☑️ Expert valuations where required

Strategic Approach: We understand that hardship applicants are vulnerable and under pressure. Our approach ensures you have the strongest possible case before engaging with acquiring authorities.

Recent Hardship Success
We've successfully represented clients across various hardship scenarios:
☑️ Deceased estate settlements requiring urgent property sales
Interstate relocations for employment where properties couldn't sell
☑️ Mortgage stress situations where designation prevented refinancing
☑️ Family separation requiring property settlement

The FM Legal Advantage

Specialist Focus: Compulsory acquisition is all we do. This focused expertise means we understand the nuances of hardship law that generalist lawyers often miss.

Government Relations: Our established relationships with acquiring authorities and understanding of their assessment processes helps streamline the application process.

Review Rights: If your initial application is rejected, we can guide you through the independent review process introduced in 2017, giving you a second opportunity for success.

Why Choose FM Legal for Hardship Cases

Experience with Complex Valuations: Hardship cases often involve complex "highest and best use" assessments requiring both valuation and town planning expertise. We coordinate these specialist inputs seamlessly.

Understanding of Vulnerable Circumstances: We recognise that hardship applicants are dealing with pressing personal or financial circumstances. Our approach is sensitive to these pressures while maintaining the rigorous legal standards required for success.

Proven Track Record: Our success rate reflects our careful case selection and thorough preparation. We only take on cases we believe will succeed.

The Bottom Line

The hardship provisions under the Just Terms Act provide a crucial safety net for property owners caught between government designation and eventual acquisition. However, success requires meeting strict legal criteria and providing compelling evidence.

At FM Legal, we ensure only strong hardship applications are lodged, which is why all our hardship matters have been successful.

Without proper legal representation, you're left navigating complex legal requirements while dealing with personal or financial pressure. Our expertise transforms the process from overwhelming to manageable.

Contact FM Legal Today

Phone: (02) 8379 1277
Email: law@fmlegal.com.au
Offices: Sydney | Brookvale | Brisbane

If you think you might have a hardship case, get in touch with FM Legal for specialist advice. The earlier you seek expert assessment, the better positioned you'll be to achieve a successful outcome.

Don't let government designation trap you with an unsellable property. Find out if you qualify for hardship acquisition.

This information is general in nature and should not be considered specific legal advice. Hardship provisions have strict requirements and every situation requires individual assessment by qualified legal professionals experienced in compulsory acquisition law.