Section 39 claim for compensation
When a proposed acquisition notice is issued, the landholder and anyone else with an interest in the land has 60 days to complete and lodge a section 39 claim for compensation form with the acquiring authority.
It is important that the landholder includes full details of the claim being made. The information on this form is considered by valuers involved in assessing the amount of compensation.
The Act sets out the 'heads of compensation' that a landholder 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 current landholder 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.
- 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 of solatium is set by the State Government. In assessing the amount of compensation in respect of solatium, 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 inconvenience likely to be suffered by the person because of his or her removal from the land, 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 on adjoining land is any increase or decrease in the value of any other land owned by the former landholder 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.
The body acquiring the land for public purposes is commonly called the acquiring authority.
Owner initiated acquisition
This is where a landholder of land reserved exclusively for a public purpose under an environmental planning instrument can give notice to the responsible authority to acquire the land. To acquire the land the authority must be of the opinion the owner will suffer hardship (within the meaning of section 24 of the Land Acquisition (Just Terms Compensation) Act 1991 if there is any delay in the acquisition of the land under this Act.
Proposed acquisition notice
Compulsory acquisition starts when the acquiring authority notifies the landholder in writing that it intends to acquire land compulsorily. This is done through a proposed acquisition notice (PAN). The PAN is sent to all parties who have an interest in the land, including those who are registered on the land title or are lawfully occupying the land. The Valuer General issues landholders with a letter, including details of who to contact in the case of any queries and the brochure, Compulsory acquisition, NSW Valuer General’s role (PDF 795.1 KB) at the time when the acquiring authority issue the PAN.