Under the act, your property may be acquired by law if an agreement on the amount of compensation cannot be reached by either party. This type of acquisition will also involve working alongside the Valuer General, an officer appointed by the NSW Governor. They are independent of local/state governments and are in charge of the policies for working out compensation when land is being acquired.
Compulsory acquisition
The first official step in the process for compulsory acquisition involves the acquiring agency providing the owners of the property with a Proposed Acquisition Notice (PAN). This is provided after a negotiation period which is a minimum of 6 months from the Opening Letter’s date.
The Proposed Acquisition Notice outlines the intent to compulsorily acquire the property by the acquiring agency after a period of time, which is normally 90 days although it can be less if the appropriate minister agrees under specific circumstances, or if the owner accepts the shorter time frame.
Within sixty days of receiving the Proposed Acquisition Notice, you must complete a Section 39 Claim for Compensation form. The form must contain all information you require the Valuer General to consider in determining your compensation.
Even after you receive the Proposed Acquisition Notice, you are able to continue exchanging contracts and negotiating with the acquiring agency prior to the Acquisition Notice being published in the NSW Government Gazette.
What happens next?
If no contracts have been exchanged in the ninety days or less notice period, the property will be considered “gazetted,” where the acquiring agency organises the publication of an Acquisition Notice in the NSW Government Gazette.
An Acquisition Notice being published in the NSW Government Gazette normally happens within one hundred and twenty days after the Property Acquisition Notice has been issued. From then, the property is considered to be officially owned by the acquiring agency from the date that the Acquisition Notice has been published. Your legal ownership/interests of the property are also changed to an entitlement to compensation, where you will be paid the value of your property as determined by the Valuer General.
After the Acquisition Notice publication, you will have up to three months or potentially less by request of the acquiring agency to vacate the property. You will not be required to pay rent during this period.
Who determines the compensation payable?
The amount of compensation payable is decided by the Valuer General. As they are independent of state/local governments and are appointed by the NSW Governor, they do not act on behalf of the acquiring agency or the property owner when it comes to determining the amount of compensation payable.
The Valuer General
The actions taken by the Valuer General will involve:
- Carrying out their own valuation and providing a Preliminary Valuation Report detailing the compensation amount and how it was decided, all in line with the Act.
- Discussing the valuation with you or your representative while providing all information that will be used for the valuation report to all parties involved.
- Providing you and the acquiring agency with a determination of compensation, which includes their independent valuation of the property.
You will be provided a compensation notice from the acquiring agency, which contains the compensation amount decided by the Valuer General. More information on the Valuer General can be found at valuergeneral.nsw.gov.au
Accepting the compensation notice
If you are satisfied with the amount provided in the compensation notice, you must complete and return a Deed of Release to the acquiring agency, where you will receive the compensation within twenty-eight days after the acquiring agency has received the Deed of Release and Indemnity alongside all necessary documents.
If you don’t accept the determination
You can lodge an objection with the NSW Land and Environment court if you aren’t satisfied with the compensation notice within ninety days of the notice being issued. You are also obliged to provide notice to the acquiring agency that you have lodged an objection in the NSW Land and Environment Court.
Advance payments while the Court proceedings are underway
The compensation notice that you may receive from the acquiring agency will pay you ninety percent of the compensation amount in the notice within twenty-eight days following their awareness of proceedings within the NSW Land and Environment Court. It’s also worth noting that you haven’t accepted the offer of compensation if you accept the advance payment.
The acquiring agency will pay interest on the advance from the date the Acquisition Notice appears in the NSW Government Gazette, up until the date the advance is paid. If you refuse the advance, it will be placed with the interest into a trust account while the NSW Land and Environment Court makes a decision.
The NSW Land and Environment Court
The NSW Land and Environment Court will hear evidence from you and the acquiring agency regarding the claims for compensation. You will also be encouraged to resolve the matter with mediation in order to avoid the need for a complete hearing.
More information about the NSW Land and Environment Court can be found at lec.justice.nsw.gov.au