Commercial Property Blog

Legal Tips and Traps

Update to Land Acquisition Laws in NSW

Posted by Dean Claughton on 27 Mar 2017

What is land acquisition?

Land acquisition is the means by which government bodies can acquire privately owned land. This land can be used for purposes such as road widening or the creation of new roads. 

How do government bodies buy private land?

  1. Through agreement between the land owner and the acquirer. This process involves the buyer approaching the land owner and arranging a registered valuer to act as an independent party in the process; or,
  2. Compulsory acquisition, a process that usually occurs if the agreement process was unsuccessful. 

What are the reforms that I need to know about?

The reforms to the Land Acquisition (Just Terms Compensation) Act 1991 ‘Just Terms Act’ came into force on 1 March, 2017. 

Major changes:

  • The term ‘solatium’ has been replaced by the term ‘disadvantage resulting from relocation’. The maximum amount of compensation payable for ‘disadvantage resulting from relocation’ has increased to $75,000. The previous maximum amount under was $27,235.
  • A mandatory six-month negotiation period must be performed before compulsory acquisition.
  • If the government buyer doesn’t use the land for the original purpose, they will be required to sell back the land to the former owner as long as no more than 10 years has passed.
  • A review process for the refusal of hardship applications will be available to landowners. 
  • Former owners of land which was bought under compulsory acquisition won’t be required to pay rent for the three-month period after acquisition if they choose to remain in the premises. However, the land must be their primary place of residence or business.
  • Compensation claims may be lodged directly to the Valuer-General.  
  • A list of relevant issues in regards to compensation must be provided to the Valuer-General by the government buyer within seven days of compulsory acquisition. 
  • The timeframe for a government buyer to provide a compensation notice to the former land owner has increased from 30 days to 40 days. 
  • Compensation for compulsory acquisition will be the equivalent market value in some circumstances.

Main takeaway 

The reforms will have a range of ramifications for both landowners and government bodies. The changes mean increased rights for landowners during the acquisition process through increased transparency between former landowners and the Valuer-General. There is also a significant increase in compensation for hardships due to relocating, along with a greater emphasis on negotiating agreements.

For more information on updates to the Land Acquisition Act, please contact: