We understand that some residents in the southeast area of Melbourne have recently received a letter from the government about the railway infrastructure project of the Victoria government. Commencing in 2022, a metro loop will be built through the suburbs of Melbourne. The first phase of construction includes sites in Box Hill, Burwood, Glen Waverley, Monash, Clayton and Cheltenham. However, due to the vast scale of the project, approximately 300 residential and commercial properties will need to be demolished to complete the first phase of the rail construction. Achieving so, the government must first acquire the properties. When it comes to land acquisitions, there are always disputes and controversies. In this article, we will discuss the legal issues arising from land acquisitions in Australia, particularly the most concerned one – whether the Australian government has the power to compulsorily acquire properties.
Are compulsory acquisitions legal in Australia?
The answer to that is yes. Under the Land Acquisition and Compensation Act of 1986, the government can acquire private land for public purposes. Government’s acquisitions can be completed through negotiation or a compulsory act.
However, there must be a valid reason for the government to acquire. Generally speaking, the accepted reasons for acquisition are for the purposes of public interest, such as building roads, railways and other infrastructures. Indeed, the construction of the metro loop in Melbourne falls within a public purpose. The common government departments involved in the act of acquisition include VicRoads, Local Council, Water Corporation, etc.
In Victoria, compulsory acquisitions are often triggered by the government’s Public Acquisition Overlay (PAO) scheme, in which certain land is retained and may be taken for public use in the future. In general, if the government has any infrastructure plans, the affected properties in the designated area will be subject in the local government’s PAO scheme. If your property is subject to the PAO scheme, it may be compulsorily acquired by the government.
This certainly places private land owners in a very passive state when it comes to compulsory acquisition, as it is often difficult for the owner to successfully object to the acquisition. However, they can seek to maximise their interests on the issue of compensation.
The Acquisition Procedure – the government may acquire the property before paying compensation
First of all, if your property is considered to be acquired by the government, you will receive a Notice of Intention to Acquire, which will inform you the reason for the acquisition and the approximate time in which it will be acquired. After receiving such notice, you can no longer sell the property or enter into a new lease.
Within six months after the Notice of Intention of Acquire has been served, you will be sent a Notice of Acquisition (‘the Notice’) which enables the government to acquire your property. Meanwhile, the Notice will be published in the Government Gazette. As of the date of publication, you will cease to own title to the property, even if you have not received any compensation from the government at this point in time.
Note that losing ownership does not mean that you must leave the property immediately. Generally speaking, if the property is your principal place of residence, you have the right to continue to live in the property for three months after the government takes ownership of your property.
Subsequently, within 14 days after the publication of the Notice, you will receive an offer of compensation for the acquisition of your property. The government generally considers the following factors when measuring a compensation for an acquired land:
- – The market value of the acquired land
- – The special value to the claimant
- – Any appreciation or depreciation of the property
- – Any losses resulting from the acquisition
- – Any reasonable legal fees, property appraisal fees and other relevant professional fees
- – Other factors including how long you have lived in the property and the inconvenience of moving
- – Any stamp duty and conveyancing fees arising from the claimant’s purchased of a replacement property
It is your call to accept the government’s compensation offer, or refuse the offer and make a counter-offer to the government. As the Government will reimburse you for reasonable legal fees and appraisal fees incurred in the process of consulting with lawyers and other professionals, we strongly recommend that you obtain a valuation report of the property and seek professional legal advice to support your counter-offer.
If you and the government cannot agree on a compensation amount, your case will be referred to the VCAT or the Supreme Court of Victoria for a final decision. Fumens Lawyers is a multicultural legal team. If you are facing similar problems, please contact us, and our professional lawyer team will try our best to solve your problems.