NSW Government agencies will need to review and change their compulsory land acquisition processes - and get ready for longer time-frames - with the NSW Government adopting reforms recommended by the Russell Review of the NSW Land Acquisition (Just Terms) Compensation Act 1991 and the Pratt Housing Acquisition Review. The introduction into Parliament of Bills to implement the changes is expected this week.
Why NSW reviewed its compulsory land acquisition process
In 2012, David Russell SC was commissioned to review the current legislation regarding compulsory land acquisitions in NSW; the Russell Review made 20 recommendations in 2014 for reform of the land acquisition system.
This year, Premier Mike Baird also asked the Customer Service Commissioner, Michael Pratt AM, to review the process, with a focus on landowners and residents. The Pratt Review made 20 reform recommendations based on a citizen-centric approach.
On 18 October 2016, the Government released its response to the Russell Review and Pratt Review and agreed that changes are necessary to ensure that landowners are supported through the difficult situation of compulsory land acquisition. The Government has proposed legislative and administrative changes which seek to make the system fair, transparent and provide landowners with more time, support and clear information.
Key legislative and administrative changes to NSW land acquisition
- a fixed six-month negotiation period before compulsory acquisition can commence; and
- acquiring authorities must provide the Valuer General with information regarding issues of compensation no later than 7 days after compulsory acquisition.
- a new plain English Land Acquisition Information Guide; and
- changes to the collection of data about land acquisitions and the publication of land acquisition data.
Managing the acquisition:
- the Valuer General must contact the landowner to discuss the valuation and then provide a preliminary valuation report to the land owner before final determination is made;
- acquiring authorities must now hold at least one face-to-face meeting with the landowner and provide the landowner with the Land Acquisition Information Guide; and
- landowners to be allocated case managers throughout the land acquisition process.
- amendments to the compensation form to make it easier to understand;
- the landowner will provide the claim for compensation form to the Valuer General (rather than the acquiring authority);
- the Valuer General gives the landowner the compensation determination and report directly (at the same time as to the acquiring authority);
- the Valuer General will have more time to provide the compensation notice (up to 45 days, but can be extended to 90 days with the agreement of the Minister for Finance, Services and Property) to ensure that all issues are adequately addressed; and
- a new maximum amount for solatium (to be renamed "disadvantage resulting from relocation") of $75,000 (rather than $27,235) backdated to 26 February 2014.
After the acquisition:
- a new process of merits review of hardship decisions made by acquiring authorities, to be undertaken by non-government professionals;
- reinstatement for the purchase of a comparable property will be available in limited and specific circumstances;
- former land owners will no longer have to pay rent to the acquiring authority for up to three months after compulsory acquisition; and
- if the land is no longer required by the agency, the former landowner will have first right to repurchase the property.
The legislative amendments are expected to be introduced into Parliament this week.
The reforms will not only mean agencies must overhaul their processes. They will also need to re-evaluate timeframes for infrastructure delivery, given the new minimum consultation and assessment periods proposed to be implemented.
Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.