On 18 October the NSW Government released its long awaited review of the State’s compulsory acquisition procedures.

David Russell QC was commissioned to examine the State’s Land Acquisition (Just Terms Compensation) Act 1991 in 2012. The report (Russell Review) was delivered to the NSW Government in 2014 but withheld from publication until two days ago.

Selective recommendations of the Russell Review have been adopted by the NSW Government as part of a major overhaul of the compulsory acquisition process in NSW.

Reforms

Significant reforms arising out of the Russell Review include:

Increased compensation for solatium

The Government has increased the maximum amount of compensation payable for non-financial impacts (known as ‘solatium’) to $75,000 (up from $27,235). The maximum amount payable is now $75,000, which will be indexed annually by CPI.

The increased payment will apply retrospectively to former land owners whose acquisitions were settled on or after 26 February 2014.

Land owners and tenants of properties acquired and settled on or after 26 February 2014 can apply for this backdated compensation by making an application on the Office of State Revenue’s website (www.osr.nsw.gov.au/solatium) or by calling 1300 303 581.

Rent free for three months after acquisition

Landowners remaining in their property following acquisition will not be required to pay rent for the 90 days they are entitled to remain in the property after acquisition.

Some acquiring authorities have adopted a policy of requiring full market rent to be paid during this period, although the current legislation provides that it may be on ‘reasonable terms’.

Authorities have also refused to compensate owners for this cost, although it is open to them to do so, and there is support for that approach in case law.

Other reforms include a fixed 6 month negotiation period before compulsory acquisition can commence unless otherwise agreed, merit based review of decisions on hardship applications and guaranteed market value assessments. It is unclear just how the NSW Government can ‘guarantee’ market value assessments.

Delay in the Russell Review

The Russell Review has been withheld by the Government for a significant period of time while authorities have undertaken a large number of compulsory acquisitions for the public purpose of major state infrastructure development. During this period a huge number of compensation claims have been processed.

You can find more information, including the Russell Review, on the new Land Acquisition website: https://landacquistionnsw.wordpress.com/what-you-need-to-know/more-information/