Eminent Domain – What This Means in Australia

Eminent Domain – What This Means in Australia

Eminent Domain

Eminent domain is the power of the government to acquire private property for public use, but with proper compensation to the owner. In Australia, this power is known as “compulsory acquisition” and is governed by state and territory laws.

Most of us dream of becoming property owners, of purchasing our own little piece of Australia, and we tend to work hard to achieve that dream. So to learn that the Australian government can take what we have worked so hard to obtain is something of a slap in the face. The Australian Constitution allows for the government to acquire the property for any reason, given that Parliament has the authority to make laws. Eminent domain is the government’s authority for the acquisition of private property, provided that the landowner is afforded just compensation. 

What Does Eminent Domain Mean?

The government can acquire private property so long as they provide appropriate compensation. Property is not limited to real estate but can relate to all forms of physical property, except money. Just compensation as determined by the court may not be restricted to cash. The government can’t simply decide it wants the private land. There must be some benefit from the property.

You may hear the phrase ‘resumption of land’ or ‘resuming’ possession. This phrase goes back to the Australian law, which reflects that the Crown originally owned all land before its private sale or lease. So, when the government takes steps to acquire the subject property, they resume possession for the Crown. 

What Is Compulsory Acquisition?

Compulsory acquisition is another term for eminent domain. It can be enacted by all levels of government, from federal right through to local. Public works like widening roads, infrastructure projects, and improving public safety are typical reasons behind these government land acquisitions. Compulsory acquisitions are relatively common in rural areas, mainly because there is less infrastructure. 

Can I Refuse To Hand Over My Property?

Not really. What you can do is get some good legal advice. You may not be able to stop the acquisition, but you can negotiate for a better deal for compensation. There may even be times when the government authority fails to follow correct procedures. 

What Are My Rights?

As a property owner, you are entitled to be treated justly. However, the following conditions must be met for the eminent domain case to be valid. 

  • The property will be used for a purpose beneficial to the public once acquired. 
  • The landowner will be offered just compensation for the property.
  • Negotiations have been allowed, and the property owner has representation. 

Can I Refuse An Eminent Domain Action?

It isn’t usually possible to refuse an eminent domain action because the government has a legal right to use its power of eminent domain. So long as they meet the conditions mentioned above, there isn’t much you can do once they have identified your property as one they need. If they haven’t acted justly, though, and they haven’t met those conditions, you can oppose their requests. You can also refuse to accept their financial offers to ensure you receive just compensation. You have a right to just compensation, so you don’t have to take the initial offer for your property. Instead, take this time to negotiate for at least fair market value. Completely stopping an eminent domain action rarely happens, only when the property owners can prove their rights have been violated. 

Should I Seek Help From An Attorney?

It certainly can’t hurt to consult a professional. You don’t stand to lose out because reasonably incurred legal costs are paid for by the government agency acquiring your property. 

They can take steps to protect your rights and evaluate whether the government’s offers meet all the necessary conditions and that you receive just compensation. Being hit by compulsory land acquisitions can strike an emotional blow for those affected. Negotiations are usually completed before reaching court. A lawyer with local knowledge can be beneficial. 

How Can I Be Sure A Property I Want To Purchase Might Be Acquired?

The Central Register of Restrictions is a centralised database listing actual and potential land use by utilities and government agencies. Once a proposed acquisition notice is issued, it will be recorded on the land title, so those looking for a house can log onto the Land Registry Services and do a title search. As mentioned earlier, there is very little to be done if a government agency wants to acquire your property, and it doesn’t matter whether you’ve just purchased or renovated it. Likewise, it doesn’t matter if you only have a short time to live; that agency will acquire that property.

How Is My Home’s Value Calculated?

The major part of the offer of purchase is the land’s market value. This amount should be equal to what you would receive on the open market. You’re looking for a fair market value here. Sometimes when only a portion of your land is purchased, it can devalue the rest of your land. This is known as severance and is more common within rural communities. A valuator might look at how the property might be used with the new infrastructure or other changes. The government typically pays relocation costs, including mortgage discharge fees, valuation fees and legal fees. The government will also take care of the stamp duty on new premises so long as it has a similar value to what they’re acquiring from you. Investment properties are a bit different. Acquiring authorities are not liable to pay stamp duty costs incurred to purchase a new investment property. However, property owners are not expected to pay the usual capital gains tax on the sale of the investment property because it wasn’t an ordinary transaction. An amount for intangibles will also be factored into the purchase offer, considering how long you’ve had the home, your circumstances and age and the inconvenience of having to move. This amount is currently capped at $75,000 in NSW. 

What If I Think The Valuation Isn’t Right?

There are at least six months to negotiate the value of the purchase price and for both parties to agree on it. Then, the land owner and the acquiring authority agree on the compensation amount. The majority of acquisitions are generally negotiated and agreed upon within the given six months. If an agreement hasn’t been reached, it will proceed to a proposed acquisition notice presented to the Valuer-General.

An acquisition notice will be published in the NSW Government Gazette if negotiations don’t result in an agreement, and the government takes the land. The amount of compensation is then determined by the Valuer-General. The landholder can lodge an objection with the Land and Environment Court if they aren’t happy with the offer. 

The government wants to provide just compensation even though whatever figure is negotiated; the landholder will never consider the transaction fair. 

FAQs About Eminent Domain

1. Is there Any way to Stop the Government from Taking My Land?

Answer: Unfortunately, eminent domain is a power that the government can wield legally. The only way eminent domain can be refused is if the government doesn’t fulfil its responsibilities to you, the property owner. If they fail to act according to the proper criteria, especially concerning fair compensation, the acquisition is made invalid. 

2. What is Eminent Domain?

Answer: It is a governmental authority allowing them to seize property from a private owner for public purposes. 

3. What does the Word Eminent Mean?

It means noticeable or noteworthy, worth remarking on. It can also mean a famous or respected person within a specific sphere—for example, eminent scholars.

Simon Fletcher is the Principal Solicitor at FletchLaw. He has been admitted as a solicitor to the High Court of Australia and the Supreme Court of New South Wales. His academic qualifications include of a Bachelor of Laws, a Graduate Certificate in Professional Legal Practice and a Master of Applied Laws (Mediation and Family Law Dispute Resolution). He can offer assistance in a wide variety of legal areas.

Do you have a problem with Eminent Domain or any other legal issue? Call us on 02 9159 9026 to find out how we can help.

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