If an acquiring authority considers it essential that a particular property or parcel of land is required for a public purpose, land can be acquired ‘compulsorily’ under the Land Acquisition Act 1993.
What is the compulsory acquisition process?
|Meetings are held to explain the purchase, process, and timeframes||Formal notification is issued to the landowner(s) and any person/organisation with an estate or interest in the land||Ownership of the property is transferred to the acquiring authority||An amount of compensation is claimed or offered||Discussions are held to arrive at an agreed compensation amount|
Step 1 – Consultation
The acquiring authority normally phones you to arrange a meeting to explain why some, or all of your property needs to be purchased and to inform you of the process and timeframes involved.
The acquiring authority may seek your agreement to enter your property to undertake a preliminary investigation and to accurately survey the land. If only part of your land is required, the acquiring authority will also discuss any reinstatement works that may be required, such as fencing and access.
Step 2 – Notice to Treat
Once a decision about exactly which part of your land is required a Notice to Treat is issued to you. This is the formal advice about the purchase and is the same as if you and the acquiring authority had signed an Agreement of Sale with the purchase price to be agreed at a later date.
The Notice to Treat tells you:
- exactly what part of your land is to be acquired
- invites you to negotiate the amount of compensation
- warns you not to do anything to the land that would affect its value
- requires you to notify the acquiring authority of all estates and interests in the land, for example, mortgages, leases, agreements, etc
- sets a date at which compensation is to be assessed.
Once the date of compensation is set, the acquiring authority does not have to pay compensation for anything done to increase the value of the land after the date of the notice.
When you receive a Notice to Treat it is best that you seek the advice of your own solicitor or valuer as they will act on your behalf in negotiations for compensation. These negotiations normally involve several technical legal and valuation matters including the determination of your land’s Market Value or Special Value (which is a financial advantage incidental to your ownership and is in addition to Market Value); damage caused by severance; betterment; injurious affection; disturbance; and other matters which may be raised by the Court or at arbitration of the compensation.
It is normal for the acquiring authority to pay your reasonable legal and valuation fees.
Step 3 - The Notice of Acquisition
When a Notice of Acquisition is published in the Tasmanian Government Gazette the acquiring authority becomes the owner of the land described in the Notice. Your rights and entitlements are then converted to a claim for compensation. The Act provides that interest is payable on the agreed compensation amount from the date of acquisition.
The acquiring authority issues you with a Notice of Acquisition of land and a Claim for Compensation Form. The Notice sets out what is required of each party and the time in which the various actions need to be completed.
Step 4 - Claim for Compensation
Once your rights and entitlements are converted to a claim for compensation, you will be provided with a Claim for Compensation Form. At this stage of the process, you are called a claimant. As a claimant, you have the following options available to you:
- complete and submit the Claim for Compensation Form within 6 months from the date of service of the Notice of Acquisition. The claim must include particulars of your estate and entitlement in the land and specify the compensation claimed; or
- wait for the acquiring authority to provide you with an offer to settle compensation.
If you do not return the claim form or respond to the acquiring authority’s offer within the timeframe, being 6 months from the date of service of the Notice of Acquisition, then the acquiring authority must apply to the Supreme Court to determine the claim.
If you submit a claim form, the Valuer General will consider the amount of compensation and determine whether the claim should be accepted or rejected. If the claim is accepted, the matter can be settled, and compensation will be paid. If the claim is rejected, the acquiring authority will make a counteroffer. If the counteroffer is not accepted within 30 days then the claim becomes a disputed claim for compensation.
There are specific things that are disregarded in assessing compensation. They are:
- any increase in value resulting from the land being used illegally;
- any increase or decrease in the value of the land being acquired because of the new use by the acquiring authority;
- any special value the land may have to the acquiring authority because it is needed which is over and above its market value;
- any expectation which a lessee may have about renewal of the lease which is not based on an option agreement.
Step 5 – Negotiations and Settlement
The acquiring authority will negotiate with you and/or your solicitor and valuer to reach a mutually acceptable agreement about the amount of compensation payable to you.
If you do not agree with the amount being offered by the acquiring authority, a disputed claim for compensation may be determined or resolved:
- by agreement between the parties;
- by arbitration;
- by a Special Arbitrator; or
- by Supreme Court action by either party.
The vast majority of claims for compensation are settled amicably. However, it is natural that you may have concerns and uncertainties because of the sudden and unexpected event of property acquisition.
You are able to discuss any concerns fully with the representative of the acquiring authority so that all matters relating to the acquisition and your entitlement for compensation are taken into consideration. Very few compensation matters require referral to the Supreme Court of Tasmania, although, if the disputed claim is not resolved within 90 days, then the acquiring authority must apply to the Supreme Court to have the claim resolved.
For more information about the process, please see the Owners Guide below.