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The Compulsory Acquisition Process

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If you have been advised that your land or business may be required to be acquired,  you can make a claim for compensation. This is why it is advised that you contact FM Legal – specialists in Compulsory Acquisition – because the acquiring authorities are sometimes prepared to enter negotiations before a project has planning approval.

It can never be too early to speak to a solicitor who can make all the enquiries for you to see if an early start is the right option for your circumstances.

You may even be able to resolve your compensation at an early stage, depending on the project, and you can also remain in the property until the acquiring authority needs it for the construction stage.

The timing as to when you receive your compensation and vacate your property are also part of what an experienced compulsory acquisition lawyer can negotiate for you.

Flexibility can give you an advantage when you must move.

Whether you are being acquired due to the Parramatta Light Rail, WestConnex, Sydney Metro West, the RMS or authorities like Health Infrastructure, these property and land acquisitions proceed under the same process. Only federal acquisitions have a different process. This information is based on the Land Acquisition (Just Terms Compensation) Act 1991 that applies in NSW.

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Our ten points guide to the NSW Compulsory Acquisition Process

Pre-Proposed acquisition notice (12 Months prior to vacating your property)

After being advised orally that your land is required, you will get an ‘Opening letter’ advising of  the reason. This letter will come from the acquiring authority, such as RMS or Transport for NSW. Sometimes it will be a letter advising that they have 6 months to negotiate with you. Even when you get a letter saying you have only 6 months to negotiate, in reality you will usually have up to 9 months to negotiate. However, 9 months is a short timeframe and so we encourage early legal advice to get your affairs in order – for example, you may have an expired lease that needs to be considered.

Note: the acquisition of land and any tenancy interest will be handled separately. A separate offer of compensation will be made to the owner of the land and the tenant.  If you rent out property you own, there are complexities with this, and care must be taken as one claim may impact on the other. Early legal advice in this situation is essential to maximise your compensation.

Initial Negotiation (6 Months)

Once you have received the Opening letter, you are in the negotiation stage. Your solicitor can negotiate with the acquiring authority for the compensation on a voluntary basis. The compensation would include the market value of your land and all costs associated with relocation – these are known as the “disturbance costs”.

If an agreement is reached between you and the acquiring authority in the first 6 months, you will receive the compensation and the ownership of the land or your lease will be transferred to the acquiring authority. Usually you can still remain in occupation after an agreement.

Proposed Acquisition Notice 'PAN' (6 Months prior to vacating your property)

If an agreement is not reached through negotiation during the first 6 months, the legal notice, known as the “Proposed Acquisition Notice” or “PAN” is served, and the compulsory acquisition process begins.

You have 60 days to submit a claim for the compensation of land acquisition with the Valuer General of NSW. Your solicitor will prepare this claim for you.

The PAN includes:

  • The detailed description of your land
  • The acquirer of your land
  • The time frame of the compulsory acquisition process, usually 90 days, and project it is required for.

The acquiring authority is able to issue the legal notice to acquire your property without your consent. In that period, you can continue to negotiate. Therefore, you have around 9 months to reach an agreement.

If an agreement is reached in this 3-month period, you will receive your compensation and the ownership of the land will be transferred to the acquiring authority. Again, some additional time to remain in the property after ownership has passed can usually be negotiated.

Acquisition Proceeds (3 Months till vacating your property)

If you and the acquiring authority cannot reach an agreement through negotiation in the last 9 months, the acquiring authority will have the Minister in question sign the acquisition notice. This acquisition notice will be published in the Government Gazette. Your solicitor will know when this is likely to occur. This is known as ‘Gazettal’.

At this stage,

  • the ownership of the land is transferred to the acquiring authority
  • your right of ownership or interest as a tenant converts to a claim for compensation
  • the Valuer General of NSW who is an independent body is appointed to decide on the amount of compensation
  • A qualified, experienced and independent valuer is appointed to your case by the Valuer General of NSW.
  • the Valuer General of NSW will make a decision on your claim within usually 45 days of when the Government acquires the land under the Just Terms Act.

You will have 3 months to occupy your land before you may be required to leave from the date of the ownership passing. Therefore, usually you will have at least 12 months before having to move to another premises and generally a little longer than this, depending on the timeline of the project.

Agreement with determination

If you agree to the amount of the determined compensation, you usually will be paid the offered amount of compensation within 4 weeks. If you accept it you will have to sign a Deed of Release and Indemnity and give up all rights to any further claim. You also have to ensure there are no other interest holders such as sub tenants before you sign the Deed of Release.

Disagreement with determination

Your lawyer will advise you on the prospects of getting a better outcome than what was determined by the Valuer General. You have a right to file proceedings in the Land and Environment Court in the next 90 days.

You will still be paid 90% of the offered amount of compensation. The advanced payment of compensation is going to help you to relocate and to at least have compensation in your hand, whilst you continue with your claim for the higher amount.

Determination of compensation

The appointed Valuer General will make a determination on your amount of compensation having regard to your case as presented by your lawyer and the valuation experts. You may also have a town planning expert depending on the issues.

A Determination will be made within 45 days. 14 days prior to the Determination you will also receive a Preliminary Determination that indicates the likely compensation. You can make further submissions at that time. Your solicitor and experts will be working on the matter for you throughout the process with the Valuer General.

Issuing the Determination and Compensation Notice (45 Days till vacating your property)

Once the Determination has been made, you and the acquiring authority will be issued the determination of compensation. After that, the acquiring authority will issue a compensation notice to you, which is an official document to notify you of the amount determined. It includes the determination of compensation and the offer for your compensation of compulsory acquisition as determined by the Valuer General. After receiving the compensation notice, you have 90 days to accept. The acquiring authority have no right to appeal the Determination.

File Land and Environment Court Proceedings

Proceedings are filed by your solicitor in the Land and Environment Court (LEC). Most of those proceedings will be resolved by agreement at a “section 34 conference” which is a settlement meeting held around 3 months into the Court proceedings where parties try to resolve their dispute. Only a small number of cases will go beyond this stage onto a hearing.

By getting an experienced acquisition lawyer and the right experts for your compensation claim, you will maximise your outcome.

Legal Fees

All legal fees that we incur we will recover, and we may also engage a barrister for your case and claim their fees.   We will give you peace of mind of being able to fight for your rights without being out of pocket for legal costs.

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If you have a question get in touch with our team.

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