Compulsory acquisition of land (also known as ‘resumption’) refers to the right of the Government or a delegated authority such as a local council to acquire privately owned land for specific purposes. Compulsory acquisition can impact homeowners, tenants, and businesses – anybody who has an interest in the property that is being acquired.

Although the right for a government authority to acquire privately owned land can cause significant upheaval, there are protections in place for those affected. The acquisition must be on ‘just terms’, and the acquiring authority is required to act fairly and reasonably throughout the acquisition process. Generally, the government must also pay a landowner’s reasonable legal costs associated with the acquisition process.

If your property is under threat of being compulsorily acquired, it is important to seek legal advice to ensure that your rights are protected, and maximum compensation can be obtained.

Why is my land needed and who may acquire it?

Federal, state, and local government entities have the right to acquire private land. In doing so, however, the ‘acquiring authorities’ must exercise their powers in accordance with the laws and processes prescribed by legislation.

Land may be acquired for public purposes such as installing or upgrading infrastructure, roads and public transport, building public hospitals and public utilities. The acquisition must be for a legitimate public purpose. Less frequently, land may be acquired because it is contaminated or considered to be a public risk.

What is involved in the compulsory acquisition process?

Legislation across the states and territories sets out the laws, processes and notice periods that apply when private land is to be acquired by a government entity. These laws and processes vary across different jurisdictions, so it is important to obtain legal advice relevant to your circumstances. There may also be specific laws that apply to certain types of acquisitions. Major infrastructure projects and acquisitions, for example, may have additional legislative frameworks specific to those projects.

While the acquisition process differs between jurisdictions and depending on the type of project, the following stages (or variations thereof) are typically relevant:

• The government entity seeking to acquire land for a specified purpose identifies the properties affected.
• Written notice is provided to the affected landowners. The notice will identify the purpose for which the land is required and contain information about the relevant acquisition and compensation process.
• Negotiations and offers may take place before resorting to compulsory acquisition, with the acquiring authority and landowner reaching a voluntary agreement on the terms of acquisition. Negotiation enables impacted parties to provide input and seek fair compensation. Involving a lawyer is important to ensure correct processes are followed and to gather specific evidence that may be required to support the value of the land and the compensation sought.
• If an agreement cannot be reached, the compulsory acquisition process commences. Independent valuers will assess the value of the land and any associated losses. Compensation is generally based on the market value of the property, but additional compensation may be provided for factors like disturbance, relocation costs, and loss of business.
• If the impacted parties and the acquiring authority disagree on the compensation amount, there may be avenues available for dispute resolution, including mediation or referring the matter to the Land and Environment Court or a similar tribunal.

How is compensation determined?

The amount of compensation should justly compensate the person for the acquisition of the land. Compensation will consider the land’s market value and may also include any special value (attributable to the use of the land), losses in market value as a result of the acquisition, disturbance losses (legal and financial costs, valuation fees and stamp duty) and non-financial compensation based on inconvenience.

Conclusion

Compulsory acquisition can impact individuals, families, and businesses. It is not unlawful and can rarely be avoided. Generally, the most feasible approach will be to ensure that the acquisition takes place fairly and compensation is in the most favourable terms possible.

If you have an interest in property, whether as an owner or tenant, and that interest is affected by compulsory acquisition, it is important to understand your rights and obtain fair compensation for what can be an unexpected interruption to your life or business.

The information in this article is of a general nature only. As noted, processes and laws vary between different states and territories, and it is important to obtain legal advice relevant to the property in question and your specific circumstances. If you or someone you know wants more information or needs help or advice, please contact us on (08) 8155 5322 or email [email protected].