On 2 July 2020, the passing of the Land Acquisition (Miscellaneous) Amendment Bill 2019 (SA) brought in a series of changes to the Land Acquisition Act 1969 (SA) (“Act”) which will broadly benefit landowners, refining the acquisition process and providing additional compensation in the face of compulsory acquisition. However, not everyone will be happy with the changes regarding underground acquisitions.
The key changes include:
The availability of an upfront payment of $10,000 to compensate home owner occupiers for any professional costs arising out of the acquisition.
The introduction of a “solatium” payment of up to 10 per cent of the market value of the land (to a maximum of $50,000) to compensate home owner occupiers for the emotional burden and other intangible disadvantages arising from acquisition.
New statutory obligations for landowners to respond to an offer of compensation within six months of the acquisition date. A party who fails to respond will be at risk of losing the right to compensation.
New laws regarding the acquisition of underground land.
This update is particularly important for owners who may be affected by the final part of SA’s North-South Corridor upgrade on South Road (River Torrens to Anzac Highway and Darlington).
Upfront Allowance for Professional Costs
Prior to the recent amendments, the Act did allow landowners to seek compensation for legal costs; however, this was only available at the conclusion of the matter, leaving landowners vulnerable to out-of-pocket professional costs from the beginning of the acquisition.
Now, when a notice of acquisition is served, an allowance of $10,000 (payable in advance) will be made directly available to owners to help them cover professional fees incurred in taking advice and considering their position as to compensation. The balance of any further reasonably incurred fees would still be paid at the conclusion of the matter. This advance payment will work towards ensuring landowners are not wholly out of pocket until the end of the matter when compensation is finally agreed or determined.
Also, the definition of “professional costs” has been expanded to include non-legal fees, for example property valuers and accountants. Again, this will assist landowners with any up-front professional fees associated with the acquisition.
Payments for Emotional Distress
Previously, South Australians were not entitled to any financial compensation for the emotional costs associated with losing their home by acquisition. In a win for the underdog, South Australian landowners facing compulsory acquisition may now seek additional compensation by way of what is known as “solatium”.
A solatium payment includes compensation for the emotional stress and overarching non-financial disadvantages arising from the compulsory acquisition of land. This payment will work to recognise what is described in the industry as “emotional dislocation”. This payment will be made in addition to market-value payments.
The solatium payment will be made upon the conclusion of the matter for the amount of 10 per cent of the assessed market value of the property or $50,000 (whichever is the lesser amount).
However, it is worth noting compensation by way of solatium will only apply to residential owner-occupiers who have been displaced from their principal place of residence, commercial landowners will not receive additional compensation.
Additional requirements to be met by land owners
The introduction of a number of new requirements under the Act means landowners must now be more proactive in dealing with the acquiring Authority, including requirements to:
negotiate in “good faith”;
notify the acquiring Authority of any interests in the land no later than 14 days after receiving notice;
if requested, attend a valuers conference; and
respond to any offer of compensation within 6 months.
We recommend landowners obtain specific advice regarding their individual rights and obligations under the Act.
Acquisition of underground land
Traditionally, land ownership entitles the owner to the right to use a reasonable amount of space above and below the surface of the land.
There is no hard and fast rule as to the depth of the right of ownership to underground land, and therefore, an acquisition would technically have been required where an Authority wished to take and develop space underground.
However, the Act now provides that no compensation will be payable for underground acquisitions, on the basis that landowners do not suffer any detriment or loss of enjoyment of their land because of an underground acquisition. In addition, in relation to underground acquisitions, landowners will not be given any notice of intention to acquire. Instead, a notice of acquisition will simply be served at the time of acquisition.
Cowell Clarke can assist clients to understand and enforce their compensatory rights upon compulsory acquisition, as well as advising generally regarding the obligations of landowners under the Act and the proper amounts recoverable.
This publication has been prepared for general guidance on matters of interest only and does not constitute professional legal advice. You should not act upon the information contained in this publication without obtaining specific professional legal advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication and to the extent permitted by law, Cowell Clarke does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in relation on the information contained in this publication or for any decision based on it.