Public Works / Land Compensation - Processes

Posted by Aidan Tattley on November 11 2019 in News

In most cases where an entity intends to exercise powers conferred on it under the Act, one of the early steps will be to consult with the relevant landowners, or at the least give notice. However, it is critical as a landowner to know your rights in such circumstances and seek professional advice (from our experience, this will usually include involvement from legal advisers, valuers, planners and depending on the circumstances other specific advisers, i.e. architects or landscape designers).

Some of the key factors/rights to remember and take note of as a landowner are:

1. Property Rights are Paramount

The New Zealand property ownership system (Torrens System) places great and indefeasible importance on property rights and the basic principle of a crown guaranteed title which can be relied on, except in very limited circumstances.

2. Agreement to Take / Negotiations in Good Faith

In most cases, the acquiring authority / entity has an obligation to attempt to reach agreement by way of negotiations, in good faith, with the landowner. This would normally include an element of compensation, but it also provides an opportunity for the landowner to negotiate other conditions and investigation of alternative options. This may happen well in advance of the actual need for the property, however, it is advisable that professional advice is sought at this early stage to ensure the most satisfactory outcome.

3. Compulsory Acquisition / When Agreement Can’t be Reached

In some instances, the parties may not be able to reach an agreement for the land to be taken, or agree on satisfactory terms for the taking of land. In these cases, the acquiring authority / entity may proceed with the compulsory acquisition process. Which, although this process has specific requirements, the landowner has much less control or ability to negotiate under this process. Although, generally, the same compensation principles apply as if an agreement to take the land was reached.

4. Compensation for Loss / Impact on Value from Land Taken

Of course, in these situations one of the significant, and often central, rights is the right to compensation. The Act sets out some key principles for calculating the quantum of compensation, with arguably one of the most important principles being that of ‘injurious affection’. In the most simplistic terms this can be described as the broader affect in use or value of the property as a whole, rather than simply looking at the value of the land / right being taken, although, of course, this also forms an element of the overall compensation figure.

A simplistic example of this principle would be that if 20 metres of land was taken from the front yard of your property to construct a new road and the value of the land taken was $100. However, as a result of proximity of the new road, there was a loss of quiet use and enjoyment/amenity of the property and it was assessed that this causes a further reduction in value of the property of $50. The overall compensation includes both elements and accordingly, the compensation figure would be $150.

Again, taking professional advice early can ensure a satisfactory outcome.

If you would like more information regarding the above, or have any questions, please contact us.

Author: Aidan Tattley