LACA

Question 1

What are the heads of compensation?

Answer 1

Market Value of Land Taken
Special Value - any pecuniary advantage in addition to market value
Severance - reduction in value of other land - caused by the land being severed
Disturbance - pecuniary loss suffered from the acquisition (relocation)
Enhancement/Depreciation - change in value because of the project
Professional expenses
Solatium - intangible and non-pecuniary disadvantages

Question 2

What is the market value of land taken (head of claim)?

Answer 2

It is the market value of the land unaffected by any increment in value caused by the purpose of the acquisition (market value - point gourde principle)

Question 3

What is the Pointe Gourde Principle?

Answer 3

The value of the land against which compensation is paid is to have no regard to any increase/decrease in value arising from the proposal to carry out the public work for which the land is being acquired.

Question 4

What is severance (head of claim)?

Answer 4

Any reduction in the market value of the claimants interest in land, which is caused by its severance from the acquired land.

Question 5

What are disturbance (heads of claim)?

Answer 5

Any pecuniary loss suffered by the claimant as the natural, direct and reasonable consequence of the taking of the land, but not related to market value. (Stamp duty, removal expenses, disruption and reinstatement of business)
No assessed by valuers

Question 6

What is special value (head of claim)?

Answer 6

Any pecuniary advantage, in addition to market value, which is important to that owner’s occupation of the land

Question 7

What are the valuations methods for LACA?

Answer 7

Market value approach (used in total acquisition)
Before and after approach (used in partial acquisitions)
Piecemeal approach (each seperate portion consistituting a loss is identified - dont use)
Reinstatement approach (properties that dont have a market)

Question 8

What is the acquisition process?

Answer 8

Land is reserved - the land is reserved under the scheme with a PAO
Land is rezoned - this must be publicised in the government gazette and local papers. All parties with an interest in the land are notified that the authority may acquire land and the purpose
Compensation claim - compensation at this stage is limited to the Planning and Environment Act 1987 under the following:
- Loss on Sale
- Have to give 2 months notice, must be properly marketed and the compensation is unaffected value minus sale price
- Refusal of permits
- compensation is unaffected value minus affected value
(If the reservation is later lifted, compensation will need to be paid back at the exact amount, this also includes those who purchased the property at a discount)
Land is owned by authority once posted in the Government gazette and NOA is served

Question 9

When can someone claim compensation from the planning authority?

Answer 9

When land is reserved for public purposes (PAO) or land is rezoned
Proposed amendment gazetted in govt. gazette
Declaration of proposed reservation by Minister
Access to land restricted due to planning scheme

An owner occupier can also claim compensation for financial loss suffered as a result of refusal of permit on the grounds that the land is being used for public purpose

Question 10

What happens once compensation has been paid?

Answer 10

The amount is lodged on title

Question 11

When does a PAO not have to be in place?

Answer 11

When the land is for sale or if less than 10% of total property is being acquired, for ministerial purpose or under the MTPF Act

Question 12

Explain the Notice of Intention to Acquire (NOIA)? SECTION 6 LACA

Answer 12

This must be served to acquire property (its valid for six months)
Must contain title, description, details and reasons for acquisition, date authority wishes to take possession
The NOIA is not an offer of binding agreement (it is an invitation to commence negotiations)
If the authority hasnt accepted interest within this 6 months, then under s.17 the notice expires (this can be extended by notice of agreement of periods up to 3 months)
The authority can acquire land earlier than publication in Gazette by agreement

Question 13

Explain the Notice to Acquire (NOA)? SECTION 17 LACA

Answer 13

The authority acquired land by publishing NOA in the Govt Gazette
The NOA becomes the relevant date for valuation
Authority must acquire land after 2 months of NOA being served
Date of Acquisition = date of NOA, or by agreement
If PPOR the authority cannot possess the residence for 3 months, and give 7 days written notice, if not PPOR, only need 7 days written notice
Once NOA is served offer is made and negotiations start (14,3,3,2 months rule)

Question 14

What must an offer of compensation include?

Answer 14

Amount of compensation
certification of valuation
explanation of difference between compensation and value (if applicable)
statement of rights and obligations

Question 15

Once NOA is served how long does authoirty have to make offer?
How long does a claimant have to respond to initial offer?
How long after the claim does the authoirty have to respond?
How long does the claimant have for the 2nd response?

Answer 15

Within 14 Days for initial offer to be made
Within 3 Months - The claimant must respond to initial offer, either accepting or disputing
Within 3 Months - Authority has another to respond to claimant
Within 2 Months - Claimant will then have to respond to authority
If time lapses or cannot be agreed - go to VCAT

Question 16

Solatium?

Answer 16

Compensation for the claimant for intangible and non-pecuniary disadvantages resulting from the acquisition. (investor vs 90 year old grandma)
Assessing:
1. The interest of the claimant in the acquired land
2. Length of time land has been occupied
3. Inconvenience suffered
4. Period of time after acquisition claimant is allowed to remain in possession of land
5. Period of time claimant would have occupied the land
6. Age of claimant/number, age and circumstances of others living with claimaint

Question 17

What are the two most important acts for LACA jobs?

Answer 17

Planning and Environment Act 1987
Land Acquisition and Compensation Act 1986

Question 18

A retail shop is compulsory acquired. How would value the compensation for a lessee?

Answer 18

Profit rent - lessor gets compensated for this - lessee does not
If rental shortfall (tenant has good deal) - they are entitled to compensation for the remaining term of the lease
Market Rent - No compensation
Compensation may also be payable under heads of claim (disturbance, professional fees, severance)

Question 19

What are the 3 most important legislation for LACA?

Answer 19

LAC Act 1986
Planning and Environment 1987
Major Transport Projects Facilitator Act 2009

Question 20

What is the prescribed formula?

Answer 20

A/B x C
A - Compensation going to paid today
B - Compensation that would have been paid
C - Compensation payable at date of acquisition

Establishes a percentage paid when refusal of permit or loss on sale occurs and leaves percentage that is still payable on property for when it is actually acquired.

Question 21

Under what section of the Planning and Environment Act is compensation paid listed on title?

Answer 21

Section 110

Question 22

What is the Major Transport Projects Facilitation Act 2009?

Answer 22

MTPF allows authority to acquire land without PAO through this act to speed things up without having to make a planning scheme amendment.
(As act suggests it is to do with roads and railways mainly)

Question 23

How do you know when compensation has been paid?

Answer 23

Listed on title or checking with the relevant acquiring authority

Question 24

Can you claim compensation when it has already been paid?

Answer 24

You cannot claim loss on sale or refusal of permit twice, but you can claim when the property is actually acquired - refer to prescribed formula

Question 25

When a tunnel is dug 18m below the ground can people claim compensation?

Answer 25

Owners of property own land roughly 15m into the earth. If it is below this amount then potentially not. Can potentially claim for things such as a development site that may need footings and base/slab to go into ground, may affect allowable use. Burnley tunnel - this was done on a have to claim basis, it wasnt offered to all properties.

Question 26

When does a PAO not have to be in place for acquisition?

Answer 26

Under the MTPF Act
If the property is up for sale
If less than 10% is being acquired
If a minister declares it, as it is going against public interest

Question 27

What is the carcass value in LACA?

Answer 27

It is the value given to the remaining use of a property when compensation is being assessed. Depending on the project timing and purpose, people will still have occupation of the property for some time and this may carry some value, giving it a carcass value. (Punt road case study, losing half, calculated to have use of half for 20 years therefore giving it some carcass value.)

Question 28

Ararat Windfarm Case

Answer 28

A case that was decided in 2020, where the point of contention was whether the windfarms that were placed there under the tenant leasing the property, form part of the CIV value, a case of chattels vs fixtures.
The supreme court of VIC in 2020 held that they were chattels. But this was contradicted by the NSW counterpart.
Specific attention was paid to the lease terms, with the lease stating the turbines must be removed at end of lease, and the planning permits also requiring the removal of the above-ground operation equipment when completed.

Question 29

What is the calculation for loss on sale?

Answer 29

Effected price - unaffected price (Price not value - its being sold)
Loss on sale is simply the loss on development rights - they have not lost the land yet, but it can no longer be used once it has been reserved.

Question 30

What is the calculation for refusal of permit?

Answer 30

Effected - unaffected value
Refusal of permit is once again the loss of development rights. What was it worth with the permits and what is it worth now without.
There is still use of land, it is not being taken yet.

Question 31

What is the relevant date for compensation with loss on sale?

Answer 31

Date of contract - the day it sold

Question 32

What is marriage value?

Answer 32

Marriage value is the difference between the unencumbered freehold value and the sum of the lessor and lessee interests.
For a marriage value to exist there needs to be a profit rental.

Question 33

What section of LACA 1986 is right to compensation?

Answer 33

Section 30

Question 34

What section is refusal of permit?

Answer 34

Section 65

Question 35

What section is loss on sale?

Answer 35

Section 106

Question 36

What are the 3 ways to claim compensation under the P&E Act?

Answer 36

Loss on Sale
Refusal of Permit
Hardship - cannot actually sell the property