The announcement by the Victorian State Government that they are proceeding with the East West Link project has caused great alarm and concern to hundreds of residents and business owners whose properties and businesses are affected by this project.
Having your property compulsorily acquired by the Government can be a traumatising event that can significantly affect one’s life and financial circumstances.
What is the East West Link project?
The East West Link is a cross-city road connection extending across Melbourne from the Eastern Freeway to the Western Ring Road.
What is Compulsory Acquisition?
The compulsory acquisition of land involves a Governmental Authority (“Acquiring Authority”), compulsorily acquiring land and all interests attached to such land i.e. leasehold interest, rights of way, etc.
The process under which land is compulsorily acquired is governed by the Land Acquisition and Compensation Act (Vic) 1986 (“Land Acquisition Act”) whilst various court decisions have significantly affected how the Land Acquisition Act is interpreted and compensation claims determined.
What Notification do I receive?
The Acquiring Authority must serve upon each person who has an interest in the land to be compulsory acquired with a Notice of the Authority’s Intention to Acquire such interest (“Notice of Intention”).
The Notice of Intention needs to be in a prescribed form and contain information and details which includes the purpose of which the interest is to be acquired, the reasons why the land is thought to be suitable for that purpose and the approximate date upon which the Authority proposes to take possession of the land.
Can I sell or otherwise deal with my property?
Whilst the service of a Notice of Intention does not constitute an offer or a binding agreement nor does it force the Acquiring Authority to proceed with the Acquisition you are nonetheless precluded from selling, entering into a new lease or otherwise dealing with the property without the written consent of the Acquiring Authority.
When will I know for sure that my property is being acquired?
The Acquiring Authority has 6 months after the service of the Notice of Intention to compulsory acquire an interest in land. If the Acquiring Authority fails to proceed with compulsory acquisition within the 6 month period then the Notice of Intention lapses and the owner may have a claim against the Acquiring Authority for any loss or damage they may have suffered as a result of the Notice of Intention.
When do I receive an Offer of Compensation?
Within 14 days after the date of acquisition has been published in the Government Gazette the Acquiring Authority must make an offer in writing to each person who has an interest in the land. The offer must contain the amount of compensation the Authority offers to pay plus a copy of a certificate of valuation to which the Acquiring Authority has relied on in making such offer.
What are my rights?
An owner of an interest in land which is acquired under the Land Acquisition Act is entitled to receive compensation assessed on the following grounds:
- the market value of the interest on the date of acquisition;
- any special value to you on the date of acquisition;
- any loss attributable to severance;
- any loss attributable to disturbance; and
- any legal, valuation or other professional expenses necessarily incurred by you by reason of the acquisition of the interest
The amount of compensation payable to an owner of an interest in land may be increased by up 10% of the market value of the land, by way of Solatium as is reasonable to compensate such owner for intangible and non-pecuniary disadvantages resulting from the acquisition such as the inconvenience suffered, the age of the owner, the amount of years one was in possession of the land etc.
Do I receive compensation for existing use of property or the highest and best use?
In regard to the market value of the interest the owner of the property is entitled to have such interest valued on a highest and best use as opposed to an existing use valuation.
For example, if a property that has been compulsory acquired is currently occupied as a single dwelling residence but the owner of the land could reasonably show that he could obtain planning and building permits to proceed with developing that land into a three (3) level residential apartments or subdivide it into lots then such owner would be entitled to seek compensation on the value of his property having regard to the ability to proceed with such development as opposed to the market value of the property in its current use.
What if the offer is lower than what I believe my property is worth?
A valuers conference is usually held in the presence of all parties and experts to try to resolve any difference. If the Acquiring Authority and the owner of an interest in land cannot agree to the compensation amount then the matter is deemed to be in dispute and any part may initiate proceedings to have the dispute determined either in VCAT or in the Supreme Court of Victoria.