29 Jan 2021Partial compulsory acquisition is where part of your property is acquired by the government for a public purpose. The law of both complete and partial compulsory acquisition comes under the Land Acquisition (Just Terms Compensation) Act 1991 No 22.
How a partial compulsory acquisition is initiated
Often, the first you hear about the government’s plans to acquire a portion of your property will be via a letter.
The letter will include a diagram of the portion of your property the government plans to acquire. It will show the new boundary they will impose inside your property, along with the likely dimensions and area of the land they require.
This will be finalised by surveyors and then become part of a deposited plan, lodged and registered with Land and Property Information.
Valuation process in a partial compulsory acquisition
According to the government, the most common way to assess a partial property valuation is by using a “before and after” method. Here, the value of your total property is first determined. Next, the value of the remaining property is established.
The government’s position is that the difference between the “before” and “after” valuations is the compensation payable.
Often the section(s) of land being acquired can form a significant part of the overall property. The impact of the partial compulsory acquisition on the remaining land needs to be taken into consideration and should be accounted for when determining the amount of compensation due to the property owner.
Assessing adverse effect on remaining land
The “injurious affection” (ie adverse effect) of the partial compulsory acquisition on the remaining land must also be assessed.
Will it depreciate the value of the other land, or increase the cost of using it? Will it limit activities on the land, interfere with its amenity or character, or deter purchasers from buying the land?
In a recent case, the Victorian Court of Appeal confirmed that the “before and after” method to determine market value must include all relevant impact of the severance on the retained land. (See CRG Nominees Pty Ltd v Department of Economic Development Jobs Transport and Resources [2015] VCAT 564.)
Can you ask the government to acquire the whole property?
Sometimes the acquiring agency will purchase the total property, even though they only need part of it. This occurs when the effect of the project on the remaining property is so significant that it warrants total purchase.
According to the government, you may ask the acquiring agency to buy the entire property. However, the decision to agree to a full purchase is at the discretion of the acquiring agency.
Making sure you get the right compensation
Many people are not aware of the extra compensation they are entitled to receive, beyond what the government claims is the market value of your land. Speaking to a lawyer who works closely with expert valuers can help you obtain much higher compensation than is originally offered by the government.
While government agents may try to convince you that their offer is final, there is often additional compensation you can claim. This may be based on your emotional attachment to the home and the inconvenience and cost of moving, along with stamp duty and bank fees.
Seeking expert legal advice on a partial compulsory acquisition is critical
Partial compulsory acquisition can be complex, especially if it splits your property. It could rob you of a front garden or bring a busy road closer to your door. In fact, there have been cases where a partial acquisition has left the landowner with a divided property which is virtually uninhabitable.
It is important to have a lawyer who is experienced in compulsory acquisition on your side. You may choose to engage your own solicitor, or the government will give you access to free independent legal assistance.
Whatever the case, it is worth getting the best legal experts in the field to fight for the highest compensation for your land.
For more information please see “Our business was forced to close to make way for the highway, so we deserve compensation.” Which case won?
For further information on partial compulsory acquisition, visit the NSW Property Acquisition website.
