Frankston Factsheet: Land acquisition and compensation
13 Oct 2016
General information for landowners and tenants
The Level Crossing Removal Project will deliver many benefits to the community, including more reliable roads and rail, improved safety for pedestrians and motorists, and better connected communities. However, construction of these projects sometimes requires government to purchase or acquire privately-owned land, particularly when projects are being built in established urban areas.
This information booklet provides a brief overview of the processes that would apply. Where land is compulsorily acquired, the Land Acquisition and Compensation Act 1986 guides how compensation is assessed.
Project planning process
For each level crossing removal an extensive design process of multiple options is undertaken to fully understand how the local area will be impacted, this includes a range of technical investigations and consultation with the community and stakeholders to help us understand which options will be the best solution at each site. Generally, no one factor is decisive in selecting a design, rather there is a combination of factors and an assessment of how each option benefits or impacts the local area. The Level Crossing Removal Authority is committed to finding the solution that best meets the current and future needs of the community and stakeholders at each site. Our intention is to avoid acquiring properties where possible, but sometimes design options make it unavoidable.
In most cases, the compulsory acquisition of property may only happen after the land is reserved for a public purpose in the relevant Municipal Planning Scheme or included in a project area under the Major Transport Projects Facilitation Act 2009.
Before your land is reserved for a public purpose, you will be notified by LXRA of the proposal and have an opportunity to express your views.
When the time comes to acquire land, our officers will contact landowners to discuss the proposal and provide any information required.
Compulsory acquisition of your property
If your land is to be acquired for a Level Crossing Removal Project, the process generally proceeds in the stages outlined below.
1. Initial contact
LXRA will contact you to discuss the proposal and provide you with information well before the formal acquisition process starts.
2. You will receive a Notice of Intention to Acquire
Following required planning approvals, a Notice of Intention to Acquire is issued to formally let you know that LXRA intends to compulsorily acquire your property. The notice provides you with time to seek professional advice prior to the acquisition.
If you want to sell your property to LXRA at this time, rather than wait for us to take the next step in the acquisition process, you will be paid the same compensation allowances as would apply under the compulsory acquisition process. If agreement is reached at this point, there is no need to proceed to the next stage.
3. You may receive a Notice of Acquisition
If agreement is not reached earlier, legislation enables progression to the next stage, which is a Notice of Acquisition. The Notice of Acquisition protects your rights to receive compensation while enabling LXRA to obtain possession of the land within a certain timeframe (sometimes before negotiations about the value of the land are finalised). The publishing of the Notice of Acquisition formalises the acquisition of the land, meaning that you are no longer the legal owner of the land.
In most cases, LXRA must wait two months after serving a Notice of Intention to Acquire before publishing a Notice of Acquisition. We will then work with you to reach agreement on the terms by which we will enter into possession of the land.
If the land is your principal place of residence or business, LXRA will not take possession for at least three months after publishing the Notice of Acquisition without your prior agreement. To reduce the impact on you, LXRA will give you the maximum possible notice of the date your land will be required.
4. Compensation offer
If your land needs to be acquired, you will be compensated under the Land Acquisition and Compensation Act 1986. This means that:
Compensation will be assessed on the basis of the market value of your land, plus any additional amounts and allowances which may apply, such as stamp duty and reasonable conveyancing costs of buying a replacement property.
Market value will be assessed by an independent property valuer based on the unaffected value of your land (that is, it won't take into account any effect of the project on the value of the land).
A compensation offer is required to be made to you within 14 days of the Notice of Acquisition being published. The compensation offer is based on valuations undertaken, reviewed and approved by the Valuer-General Victoria and signed off by the Government Land Monitor if required.
If you wish to obtain advice in relation to acquisition and compensation negotiations after you receive a Notice of Intention to Acquire, LXRA will reimburse the reasonable costs of professional advice, such as a legal and/or valuation advice, you incur after receiving the Notice of Intention to Acquire. To ensure that LXRA agrees that these fees are reasonable, you may wish to arrange for your advisors to submit fee proposals to LXRA prior to undertaking work for you.
Depending on individual circumstances, additional compensation, known as solatium, may be paid. Solatium is assessed as a dollar amount but is capped at 10 per cent of the market value and is to compensate you for non-financial disadvantage caused by the acquisition. Although assessed on a case by case basis, the Land Acquisition and Compensation Act 1986 sets out the criteria that must be considered. This may include the length of time you have occupied the land, the inconvenience likely to be suffered, and your age.
If you operate a business on your land, compensation may be payable for financial loss suffered to the business as a result of the acquisition of your land.
You may wish to discuss this with LXRA at an early stage.
Once you have received an offer of compensation, you can request that LXRA pay an advance of the offer. The advance payment will be made within one month of receiving the request and will not affect your entitlement to continue negotiating a final settlement. Once agreement is reached on the amount of compensation payable, the balance of the compensation payment will be paid as soon as possible.
Frequently asked questions
When will I know if my property will be acquired?
If your property may be required for a Level Crossing Removal Project, LXRA will be in contact with you prior to commencement of any planning scheme amendment process for the Project. Formal commencement of the process to compulsorily acquire land typically happens after the planning approval has been obtained.
Where a property is directly affected, LXRA will make direct contact with you to formally discuss the process and provide information on next steps.
Are there different types of property acquisition?
Property acquisition can be full or partial, meaning either all or just part of a property may be required.
How is the value of my property assessed?
Compensation is based on the market value of your property at the date of acquisition. It ignores the effect the Level Crossing Removal Project may have on the value of your land. The assessment of market value takes into account the value of existing improvements and renovations that add value to your property. Similarly, the value of a well-maintained property is recognised in the market value assessment. Please contact LXRA if you have any concerns or proposals that you would like to discuss.
I have been planning to renovate/ redevelop – should I go ahead?
If you receive a Notice of Intention to Acquire and are planning on renovating or redeveloping your property, please contact LXRA. Once you have been issued with a Notice of Intention to Acquire, you cannot make any permanent improvements to your property without first obtaining our approval.
Can I keep my property?
If your property is identified as being required for the delivery of a Level Crossing Removal Project and the project receives planning and other approvals, your property will be compulsorily acquired. This is not an optional or discretionary process.
How can I be sure I'm getting a fair deal?
LXRA will reimburse the reasonable costs that you incur for engaging your own legal advisor and any other relevant professional advisors (such as your own valuer), so that when you receive a compensation offer you have independent advice to help you understand it and respond. To ensure that LXRA agrees that these fees are reasonable, you may wish to arrange for your advisors to submit fee proposals to LXRA prior to undertaking work for you.
Offers of compensation are based on valuations prepared by accredited and independent valuers experienced in the acquisition process. If there are differences between valuations, a valuers' conference will be held to seek to negotiate and agree on the value of your property.
What happens if we cannot agree on a valuation?
The matter may be referred (by either you or LXRA) to the Victorian Civil and Administrative Tribunal or the Supreme Court for resolution. Please note that your costs associated with any Tribunal or Court hearings will not be reimbursed by LXRA under the Act. Instead, the Tribunal or Court will make a decision as to payment of costs once it has handed down its decision.
I am a residential tenant – what are my rights?
Tenants may be eligible to receive compensation. The amount likely to be paid, if any, depends on the nature of your occupancy. For example, a tenant with a long-term lease may be able to demonstrate a more significant impact than one with a month to month arrangement. Generally compensation may include removalist fees and fees incurred in changing residences, such as utility connection fees.
I operate a business – what are my rights?
LXRA recognises that every business is unique, and compensation for businesses is determined on an individual basis. Business disturbance losses, removalist costs and costs such as stamp duty and the conveyancing costs of purchasing a replacement property may be paid (if you own the property on which you operate your business and it is acquired by LXRA), but circumstances vary and it is important that you discuss options with LXRA and your advisors.
Once the acquisition process begins, how long does it take?
This often depends on the type of property (commercial or residential) as well as LXRA's timeframes for staging of construction. You are encouraged to discuss your individual circumstances with LXRA's Land Team.
Will anyone need to enter my property prior to commencement of acquisition?
In some circumstances a licensed surveyor may need to enter your land to establish accurate survey boundaries.
In order to provide landowners with an offer of compensation, a valuer will be required to inspect your property. If this is necessary, you will be notified in advance.
When will I need to vacate my property?
LXRA will aim to let you know as early as possible in the process when you will need to vacate. If your property is your principle place of residence or business, LXRA is required to allow you to remain on your property for a minimum three-month period after the Notice of Acquisition unless you agree to a shorter timeframe.
When will I receive a compensation offer?
LXRA will engage with valuation consultants to provide independent advice enabling compensation offers to be prepared. Offers are made within 14 days after Notices of Acquisition are published, although if owners choose to negotiate compensation following receipt of a Notice of Intention to Acquire, a compensation offer may be made earlier.
Do I have to accept the compensation offer?
No, an owner can obtain their own valuation advice to help decide whether or not to accept an offer made by LXRA. The reasonable cost of obtaining this advice will be reimbursed by LXRA.
Voluntary Purchase Scheme
In certain very specific circumstances, LXRA may consider introduction of a Voluntary Purchase Scheme (VPS) for some properties. This process is entirely separate from the compulsory acquisition process and is not addressed in this Fact Sheet.
We recognise that the compulsory acquisition of land, in particular residential properties, can be complex and may cause concern. If you would like to discuss any of the information in this Fact Sheet with us in more detail, please contact us on the details below.
We also offer independent counselling to individuals who may be feeling under stress. This is a free and confidential service, which can be accessed by calling 1300 830 687.
For a printable version, download the Land Acquisition and Compensation fact sheet PDF, 1.3 MB