Compulsory Acquisition: 15 September 2022
Public Acquisition Overlay (PAO) Compensation Entitlements
On 27 August 2021, the Minister for Planning approved Amendment GC92 to the Nillumbik and Whittlesea planning schemes which applied a Public Acquisition Overlay to land required for the Yan Yean Road - Stage 2 Project.
Before Head, Transport for Victoria can acquire land, it must reserve the affected land under a planning instrument. Like a Heritage Overlay, a Public Acquisition Overlay notifies the world that a parcel of land has been reserved for a public purpose.
Although there is no legal mechanism available to landowners to force Head, Transport for Victoria to compulsorily acquire your land earlier than when they require it, there are three potential options available to landowners which triggers compensation we refer to as 'planning compensation' pursuant to the Planning and Environment Act 1987.
Planning compensation is different to the types of compensation landowners would be entitled to claim under the Land Acquisition and Compensation Act 1986 if the land was compulsorily acquired by Head, Transport Victoria for the Yan Yean Road - Stage 2 Project.
To claim planning compensation, a landowner must have suffered a financial loss as a direct consequence of the Public Acquisition Overlay on your land, or as a direct consequence of the Council's (as a result of advice from Head, Transport for Victoria that the permit ought to be refused) refusal to grant a permit to develop your land.
The three options that are potentially available to landowners (before the compulsory acquisition process commences) are:
Loss on Sale Compensation
Loss on sale compensation is available to a landowner who suffers a loss on the sale of their property as a direct result of the Public Acquisition Overlay, and they have met the notice requirements under the Planning and Environment Act 1987.
For a landowner to claim loss on sale compensation under the Planning and Environment Act, there must have been an 'arm's length' sale of your property. Full and proper property marketing must occur, and the sale must be transparent. To ensure that the Authority accepts a loss on sale claim, we recommend that the property be listed on the open market with a vigorous marketing campaign, and a public auction should be held.
Subject to the above, loss on sale compensation will be available to a landowner if there has been a satisfactory sale of your property and if your property sold for less than it would normally have (if the Public Acquisition Overlay did not reserve it).
If a landowner's property sells and they are entitled to make a claim for loss on sale compensation Head, Transport for Victoria will pay and/or reimburse a landowner for the following:
Therefore, if your property does not sell, or if your property sells for the same value or a higher value than the valuer considers it would have if it were not reserved by way of a Public Acquisition Overlay, then you will not be entitled to make a claim for the payment and/or reimbursement of your reasonable legal, valuation or other fees and you will be responsible for payment of those fees.
All other expenses that you would expect to incur if you put your property up for sale -such as marketing expenses, agents fees, conveyancing fees, the preparation of the Section 32, etc - will not form part of your claim and, as such, are expenses that you will incur and be responsible for the payment of regardless of whether or not you are entitled to make a claim.
If you are considering selling your property and seeking compensation for a loss on sale claim, we recommend you contact the Aitken Partners Compulsory Acquisition Team to discuss the process before you commence.
Financial Loss Compensation Costs
If a landowner applies for a planning permit to develop their land and it is refused on the sole basis that the land is reserved by way of a Public Acquisition Overlay, a landowner is entitled to make a claim for financial loss compensation.
Head, Transport for Victoria will pay and/or reimburse a landowner for the following:
Given that a landowner is only entitled to claim financial loss compensation if a planning permit has been refused based on the Public Acquisition Overlay, a landowner will only be entitled to claim the payment and/or reimbursement of reasonable legal fees incurred (as described above) if they are entitled to make a claim.
All other expenses a landowner would expect to incur if they were to apply for a planning permit to develop their land - such as town planning expenses, council fees, engineering costings, etc - will not form part of any claim and as such are expenses that a landowner will incur and be responsible for the payment of regardless of whether they are entitled to make a claim.
If you are considering applying for a planning permit and seeking compensation for financial loss we would recommend you contact the Aitken Partners Compulsory Acquisition Team to discuss the process before you commence your application.
Early Purchase on Hardship Grounds
If, after embarking upon a vigorous marketing campaign and a public auction, there has been no interest in the property or a permit was refused as a result of the Public Acquisition Overlay it is open to a landowner to request Head, Transport for Victoria to purchase your property at its market value (ignoring the impact the Public Acquisition Overlay has on the value of your property) as long as it can be demonstrated that a landowner's inability to sell will cause them significant hardship.
Each hardship request is considered individually, and it is at the Head, Transport for Victoria's discretion as to whether they will consider an early purchase of a property. We cannot force Head, Transport for Victoria to purchase your property.
The above is a summary of the 3 potential options that are available to landowners where all or part of their property has now been reserved by way of a Public Acquisition Overlay prior to the compulsory acquisition process commencing.
If you would like a greater understanding of the compulsory acquisition process in relation to the Project or would like to discuss entitlements to compensation relating to the Public Acquisition Overlay affecting your property, please feel free to contact us to arrange a mutually convenient time to discuss your queries.
About Our Compulsory Acquisition Team
Aitken Partners Compulsory Acquisition Team has more than two decades of combined experience in representing landowners, tenants and business owners in compulsory acquisition claims in most (if not all) of Victoria's major infrastructure projects.
If you are impacted (or believe you may be impacted) by the Yan Yean Road - Stage 2 Project, it is important you engage lawyers experienced in compulsory acquisition to assist you in obtaining advice on appropriate compensation that may be payable to you.
If you are affected (or believe you may be affected) by the Yan Yean Road - Stage 2 Project, please contact us on 03 8600 6000 to arrange a time to speak with our Compulsory Acquisition Team regarding the Project and/or the compulsory acquisition process and your potential rights to compensation as a result of the Project.