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Proposed acquisition notice

The first formal step in the compulsory acquisition process is the issue of a proposed acquisition notice (PAN) by the acquiring authority to the land owner. The PAN includes:

  • a description of the land
  • the authority of the State proposing to acquire the land
  • the period of time within which the land will be compulsorily acquired.

An acquiring authority cannot compulsory acquire land unless a PAN has been given to the land owner.

The land owner and the acquiring authority can continue to negotiate at this stage of the compulsory acquisition process. If agreement is reached, the acquisition may be finalised by a contract and transfer or formal agreement under section 30 of the Land Acquisition (Just Terms Compensation) Act 1991.

The Act also requires for 90 per cent advance payment of compensation where the amount of compensation is disputed, provides for the disadvantage resulting from relocation for a principal place of residence and includes objection and appeal rights to the Land and Environment Court.

Section 39 claim for compensation

This form is to be completed by the land owner after the proposed acquisition notice has been issued by the acquiring authority. When completing the form land owners should include the information, issues and concerns they want the valuer to consider when completing the valuation report for the determination of compensation. Land owners should provide their completed form to the Valuer General.

The Act sets out the “heads of compensation” that a land owner can claim under and these are also listed in the claim for compensation form. These are:

  • market value of land is the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer. The ‘market value’ will disregard (for the purpose of determining the amount that would have been paid): 
    • any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, and 
    • any increase in the value of the land caused by the carrying out by the authority of the State, before the land is acquired, of improvements for the public purpose for which the land is to be acquired, and 
    • any increase in the value of the land caused by its use in a manner or for a purpose contrary to law.
  • special value of the land to the land owner is the financial value of any advantage, in addition to market value, to the person entitled to compensation which is incidental to the person’s use of the land
  • loss attributable to severance of land is the amount of any reduction in the market value of any other land of the person entitled to compensation which is caused by that other land being severed from other land owned by that person 
  • loss attributable to disturbance can include any or all of the following: 
    • legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land, 
    • valuation fees reasonably incurred by those persons in connection with the compulsory acquisition of the land,
    • financial costs reasonably incurred in connection with the relocation of those persons (including legal costs but not including stamp duty or mortgage costs),
    • stamp duty costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the purchase of land for relocation (but not exceeding the amount that would be incurred for the purchase of land of equivalent value to the land compulsorily acquired),
    • financial costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the discharge of a mortgage and the execution of a new mortgage resulting from the relocation (but not exceeding the amount that would be incurred if the new mortgage secured the repayment of the balance owing in respect of the discharged mortgage),
    • any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition.
  • disadvantage resulting from relocation (formerly called solatium) is compensation to a person for non-financial disadvantage resulting from the necessity of the person to relocate his or her principal place of residence (home) as a result of the acquisition. The maximum amount is set by the NSW Government. In assessing the amount of compensation for disadvantage resulting from relocation all relevant circumstances are to be taken into account, including: 
    • the interest in the land of the person entitled to compensation, and
    • the length of time the person has resided on the land (and in particular whether the person is residing on the land temporarily or indefinitely), and
    • the period after the acquisition of the land during which the person has been (or will be) allowed to remain in possession of the land.
  • any increase or decrease in adjoining land is any increase or decrease in the value of any other land owned by the land owner at the date of acquisition, which adjoins or is severed from the acquired land by reason of carrying out of, or the proposal to carry out, the public purpose for which the land was acquired.

 

   
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