GENERAL ENQUIRIES13 535 57
WOLLONGONG(02) 4221 9311
SHELLHARBOUR(02) 4295 8400

Insights

Scenario

This seems like a fair process; land needs to be acquired by government agencies on occasion in order to initiate public works like roads. Consider this scenario though. You run a business and you’ve fallen into debt. In order to service the debt and maintain the business you decide to downsize and move into a smaller home, a tough decision for any family to make. You come to arrangements with your creditors at great expense and effort and then move to have your property listed. However the next day you receive a call from your real estate agent advising that your property has been marked for compulsory acquisition in the future. You don’t know when your property will be acquired or how much compensation you’ll be receiving. What you do know is that nobody wants to purchase property that has been marked for compulsory acquisition. Your plans to pay your business debt have suddenly taken a turn for the worse.

Response

Division 3 of part 2 of the Act provides that owners of land, earmarked for acquisition in the future, can initiate acquisitions of land by government agencies in cases of hardship.  In order to qualify you need to have been notified by the relevant agency that your property is marked for acquisition some time in the future.The owner may then apply to the authority to force them to acquire the land early provided that the owner considers they will suffer hardship if there is delay in the acquisition of the property. If the application is successful, the agency must acquire the land within 90 days of the hardship application.

The Catch

The agency is not required to acquire the land at the request of the owner unless it is of the opinion that the owner will suffer hardship. Under the Act, the owner suffers hardship if:• The owner cannot sell the land at market value due to the designation of the land for a  public purpose; or It has become necessary for the owner to sell the land without delay for ‘pressing personal, domestic or social reasons; or in order to avoid the loss of (or a substantial reduction in) the owner’s income.

This means that it is up to the agency to determine whether or not your circumstances attract the benefit of the hardship provisions. If they disagree then you are faced with a lengthy, costly appeal process that may not be successful.

Conclusion

The hardship provisions were introduced in 2006 and have been the subject of review as early as last year. The challenges associated with your property being ‘blighted’ by an agency when it’s marked for acquisition are difficult and appropriate provisions must be put in place to compensate land owners.