Compulsory Acquisition FAQ
Please see below a list of questions we are often asked by our clients.
The acquisition process is commenced in one of three ways:
- You receive an informal offer of settlement;
- You receive a Notice of Intention to Acquire;
- You receive a Notice of Acquisition
The first two steps are outside of the formal acquisition process set out in the LACA but can provide many benefits and the same sort of compensation available under the LACA. If negotiation between you and the relevant Authority breaks down, then the formal process will commence with the Notice of Acquisition being served on you.
If you have any questions relating to these issues, please contact a member of our Business Law team.
What is the LACA?
It is the Land Acquisition and Compensation Act 1986 (Victoria) and provides for the process for the relevant authorities to acquire land for public works (such as roads and other community infrastructure).
Can the Government take my land?
Depending on the circumstances, provided that the necessary planning scheme is amended and there is legislation in place allowing it, yes the Government or an authority can take your land. You should obtain legal advice on your particular circumstance
What is a Public Acquisition Overlay?
A Public Acquisition Overlay is the first step in a government or authority earmarking land that they want to acquire in the future. It is a planning scheme amendment which puts owners and prospective purchasers on notice that the land may be acquired in the future.
Public Acquisition Overlays - can I stop them?
Before a Council or authority can implement a public acquisition overlay, it must first seek submissions from interested parties. Usually there will be a planning panels hearing in which submissions (oral and written) can be made objecting to the overlay being imposed on the subject land. Tisher Liner FC Law have experience in writing and giving submissions for such hearings.
Public Acquisition Overlays - can I get compensation?
Land owners may be entitled to compensation pursuant to the Planning and Environment Act 1987 (Vic) if they are affected by a public acquisition overlay. For example, if you wanted to build or develop the property and the council refuses the permit on the basis of the overlay, it may be possible to seek compensation for the loss development opportunities.
Can I obtain legal advice on any offer put by an Authority when my land is being acquired?
Yes, you can (and should) obtain independent legal advice on any offer put by an Authority either before or during the formal acquisition process. In most cases, the Authority will pay your reasonable legal costs and during the formal acquisition process under the LACA, the Authority must pay your reasonable legal costs. Normally, you will not be out of pocket for legal costs in an acquisition matter. However, if you issue legal proceedings in a Court, your costs will not automatically be payable by the Authority and such costs will be determined by the Court. We can advise you if you decide to issue legal proceedings in a Court.
What are the steps for compulsory acquisition?
We set a brief summary of the process of obtaining compensation under the Land Acquisition and Compensation Act 1986 (Vic) ("LACA") below:
First Step - Notice of Acquisition
The Authority must provide a notice of intention to acquire the interest or commence negotiations to acquire an interest in the land. The Authority will provide an Initial Offer of Compensation which is to be a "fair and reasonable estimate of the amount of compensation" payable to the claimant and must include a certificate of valuation and a statement explaining the difference between its offer and the valuation.
Second Step - Contesting Compensation
Within 3 months of the service of the offer the claimant can accept the compensation offered or provide a counterclaim setting out what compensation it believes is "fair and reasonable". This must be carefully worded and supported by valuations. We can provide further advice on what can and cannot be obtained as compensation and guide you through the whole process to achieve the best outcome possible.
Third Step - Authority
The Authority has 3 months to provide a written reply to the counter claim. If no reply is provided, the Authority is deemed to reject the offer and restate its previous offer. If the Authority varies its offer, the claimant must accept or reject the offer within 2 months.
Fourth Step - Dispute
In the event that the Authority and the claimant are unable to agree on an amount, either party may issue proceedings in the Victorian Civil and Administrative Tribunal or the Supreme Court of Victoria.
The Authority may provide you with a Notice of Intention to Acquire before undertaking formal steps under the LACA. This is an opportunity to resolve the matter with the Authority without going through the formal process. The LACA provides that the Authority must pay the reasonable fees of professionally qualified advisors, such as solicitors and land valuers that you have chosen. Therefore it is important that you obtain appropriate legal advice in all dealings with the Authority to ensure that your rights are protected and you obtain the best possible outcome. We have accredited specialists in business law, property law and commercial litigation and can assist you with the process and deal with Melbourne Metro Rail Authority to ensure you get the best outcome possible.
For example, VicRoads have already began issuing Notices of Intention to Acquire for rail crossing land and some of our clients have already received such notices and are preparing their claims.
Do I have to accept the valuation of my property that the Authority provides me?
During the formal process the answer is no, you can (and should) obtain your own valuation to ascertain whether the valuation provided represents a fair and reasonable value for your property/loss. Sometimes it is not possible to negotiate values for informal offers, but you always have the right to refuse any informal offer and proceed with the formal process outlined in the LACA. In most cases, the Authority will pay your reasonable valuation costs and during the formal acquisition process under the LACA, the Authority must pay your reasonable valuation costs. Normally, you will not be out of pocket for valuation costs in an acquisition matter. However, you should obtain legal advice prior to engaging a valuer.
Can I get my own valuation during the acquisition process?
Yes, and in most cases the Authority must reimburse you the reasonable costs of these. However, you should obtain legal advice prior to engaging a valuer.
What is the 'Fair and Reasonable' value of the land for compulsory acquisition?
The LACA sets out criteria on how the value of land is to be determined. The LACA sets out the general principles/factors to be taken into consideration as follows:
• the market value of the interest on the date of acquisition;
• any special value to the claimant on the date of acquisition;
• any loss attributable to severance;
• any loss attributable to disturbance;
• the enhancement or depreciation in value of the interest of the claimant, at the date of acquisition, in other land adjoining or severed from the acquired land by reason of the implementation of the purpose for which the land was acquired;
• any legal, valuation and other professional expenses necessarily incurred by the claimant by reason of the acquisition of the interest.
What happens if only part of my land is being acquired?
Under the LACA if less than the whole of the land in which a claimant's interest subsists is acquired or less than the whole of that interest is acquired, the market value of the acquired interest is the difference between the market value of the interest before the acquisition and the market value of the interest after the acquisition.
What is Solatium?
Under the LACA, the amount of compensation for your land may be increased by an amount not exceeding 10% of the market value of the land and is to compensate you for intangible and non-pecuniary disadvantages resulting from the acquisition.
What factors are taken into consideration to determine Solatium?
The following relevant circumstances to the claimant may include, but is not limited to:
• the interest of the claimant in the acquired land;
• the length of time during which the claimant had occupied the land;
• the inconvenience likely to be suffered by the claimant by reason of removal from the land;
• the period of time after the acquisition of the land during which the claimant has been, or will be allowed to remain in possession of the land;
• the period of time during which, but for the acquisition of the land, the claimant would have been likely to continue to occupy the land;
• the age of the claimant; and
• where the claimant at the date of acquisition is occupying the land as the claimant's principal place of residence, the number, age and circumstances of the other people (if any) living with the claimant.
If I don't own the land but have lived at the land being acquired, can I claim Solatium?
If no Solatium is paid to a claimant, a person other than a claimant who, at the date of acquisition, had occupied the acquired land for a continuous period of not less than 12 months before that date as the person's principal place of residence may claim from the Authority such amount, not exceeding 10% of the market value of the land, by way of Solatium as is reasonable to compensate the person for intangible and non-pecuniary disadvantages resulting from the acquisition.
I am a tenant of the land being acquired. Can I obtain compensation?
If you suffer loss from the acquisition, you may be entitled to compensation.
A tunnel is being built under my land. Can I obtain compensation?
If you suffer loss from the acquisition, you may be entitled to compensation. This is called underground strata acquisition. It will depend on at what level under your property the tunnel will be and what your title provides for.
What is surface acquisition?
This is when an Authority acquires the whole or part of your land in order to build a project (such as a road or tunnel). As you will lose physical possession of part of your land you will be entitled to compensation for the fair and reasonable value of the land being acquired.
What is underground strata acquisition?
This is when an Authority is building a tunnel under your land and is acquiring the part of your land which is under the surface and buildings. If you suffer loss from this acquisition, you still may be entitled to compensation. The land for the tunnel will be declared project land by a notice in the Victorian Government Gazette which will formalise acquisition of the land and you will no longer be the legal owner of such land. You have 2 years to submit a claim for compensation for financial loss from the date the notice is published in the Gazette. For example, in the East West Link project, some land owners will be able to obtain compensation for land being used as part of the tunnel even though their house or building remains untouched.
What land do I own under the surface?
The amount of land you own under the surface of your property should be noted on your title by reference to the relevant plan of subdivision or original crown grant. Normally this is 15 metres, but you must review your title to ascertain the correct depth. In some cases, any tunnel built may be below the land that you own and therefore not affect your title.
I operate a business on land being acquired. Can I get compensation?
If you suffer loss from the acquisition, you may be entitled to compensation.
My land is not being acquired but I believe that the road will cause a decrease in the value of my property. Can I get compensation?
Usually, no as you are only entitled to compensation under the LACA if you have a legal or equitable interest in the land being acquired.