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What Happens If The Government Or Local Authority Wants Your Land?

10 May 2012

Can the government or local authority take your land? The answer is yes, if the land is required for a ‘public work’. You will, of course, be paid compensation for the taking of your land, but understanding the process and getting advice on your entitlements can make the experience less distressing.

Under the Public Works Act, the government, local authority and other Crown entities have the power to compulsorily acquire your land, or any part of your land, for a public work. For example, acquisitions of land by the New Zealand Transport Agency for the extension and upgrading of the roading network throughout the country are made under the Public Works Act, as are acquisitions for other government or local infrastructure.

Payment for your land is made on the basis that you receive fair compensation, but not so much that you can take advantage of the situation; you cannot hold the acquiring authority to ransom.

Under the Act the compensation paid to you will be based on a number of factors. These include the market value of your land, loss of value or damage to any retained land, any disturbance resulting from the acquisition or the works themselves, mortgage break fees, business loss (where your business is located on the land concerned), costs of valuation and professional advice, and the reasonable costs of moving to another location.

It’s up to you to keep track of the costs and the losses that you experience due to the public work. Having your land taken under the Act, obligates you to minimise losses; you can only receive compensation for losses that occur as a direct consequence of the public work. Any losses that are the result of your actions or inactions won’t be compensated. Again you can’t hold the acquiring authority to ransom regarding the compensation amount.

To establish the amount of compensation, both you and the acquiring authority will each typically obtain a valuation from registered valuers. Those valuations will assess all losses you’ve incurred (including loss of land or development potential) and will take into account any improvement to your property resulting from the public work. An improvement would include better access or greater development opportunities. The two valuations will form the starting point for negotiation on the compensation amount.

If you can’t reach agreement on the final compensation figure, you will have to get a determination from the Land Valuation Tribunal. The Tribunal will hear evidence and decide the compensation the acquiring authority must pay. Usually, however, the landowner and the acquiring authority do agree on compensation before resorting to the Tribunal.

You can’t underestimate how upsetting and tortuously slow the acquisition process can be for a landowner. In my experience it always takes longer than first imagined and generally no one ends up entirely happy with the outcome. The small bright point in the process is that the acquiring authority must act reasonably, and in good faith attempt, to negotiate compensation. This means that landowners should receive the benefit of the doubt if an aspect of the valuation is uncertain.

Given the acquiring authority pays for your legal and valuation fees, there’s no excuse not to seek the right advice from the very start. This way you can be sure you’re fully and fairly compensated in each of the areas of loss you are entitled to. An experienced advisor on the Public Works Act can also help you set the right expectations from the beginning and make the process as painless as possible.

 

Dan Moore is a partner of Norris Ward McKinnon. Information in this article should not be a substitute for legal advice. With offices in Hamilton and Huntly, we have friendly, expert legal advisors ready to help you with your business and personal legal matters.