From time to time State and Local Body agencies need to acquire privately owned land. The process for doing this is set out in the Public Works Act 1981 and is a complex, step by step procedure.
Who Can Take Land
A number of agencies are authorised to acquire land under the Public Works Act, whether by agreement or by compulsion, for a wide range of purposes. These include State agencies such as LTSA for stage highways, Ministry of Education for schools, Public Utilities for electricity, telecommunications and gas services, and Local Bodies for a wider range of purposes including roads, sewage and stormwater disposal and water supplies.
How Does it Start
Often an agency that needs to acquire land (called a “Requiring Authority”) makes a formal request to a City or District Council to designate the land required under its District Plan. That process is set out in the Resource Management Act. The Council would then ensure that appropriate plans defining the land are available and would serve notice on affected property owners and publicly advertise the proposed designation. An objections period is provided and the Resource Management Act sets out a procedure for dealing with those objections through to a hearing and ultimately a decision to designate or otherwise.
In other cases, such as re-routing the path of a sewer pipe, formal designation is not necessary and land making up the new route is acquired by negotiated agreement or compulsorily if agreement cannot be reached.
What is the Acquisition Process?
Initially, the agency requiring land will try and negotiate an agreement with the property owner. Agreement commonly includes payment of the owner’s legal and valuation costs, payment of compensation for the land taken, and some remedial work (such as replacing fences on the new boundary, relocating driveways and so on).
The Compulsory Process
Where agreement cannot be reached, the compulsory acquisition process under the Public Works Act is initiated. The first step is service of a Notice of Desire by the Requiring Authority on the land owner plus any mortgagees or owners of other interests in the land that the land is required. The Notice of Desire must also be registered against the title to the property.
The Act then provides a three month period during which the Requiring Authority must use its best endeavours to negotiate an agreement. If agreement still cannot be reached after that time, the Requiring Authority then has nine further months during which to serve a Notice of Intent to take the land. The Notice of Intent must be served on land owners and owners of interests in the land, published in the New Zealand Gazette, and advertised in the local newspaper.
Any party served with a Notice of Intent has a right of objection to the proposed taking. Any objections lodged must be referred by the Requiring Authority to the Environment Court which will make the ultimate decision on them.
If no objections are received, or if any objections lodged are not upheld by the Environment Court, the Requiring Authority can then compulsorily acquire the land. The formal part of the process to acquire the land is publication of a Proclamation that has been approved by the Governor General in the New Zealand Gazette, declaring the land to be taken. Once that has been done, any compensation is then payable to the land owner.
What Can be Taken
Land also includes any interest in land. This means that a Requiring Authority can take the whole of the land, a defined part, or even just an easement over part of the land.
Any compensation payable is calculated on the basis of the value of the land before the taking, and the value of the land afterwards. The difference is the amount of compensation. Those figures are set by a registered valuer engaged for the purpose.
Often land owners do not object to the taking of the land, but disagree as to the amount of compensation. In those cases, the land owner will obtain their own valuation and if there is a disparity there is a process within the Public Works Act for the amount of compensation to be determined by the Land Valuation Tribunal.
Sometimes the proposed public work that the land is needed for will enhance the value of the remaining land rather than reduce its value. That is called betterment, and has a value. There are cases where not only is land taken for a public work, but the land owner is required to pay the Requiring Authority the value of betterment.
From a Requiring Authority’s point of view, the process is very costly, even where agreement is reached. Where agreement cannot be reached, objections are lodged or valuations are disputed, significant cost is incurred by both the Requiring Authority and the land owner. That is why Requiring Authorities may be less generous in terms of agreeing to pay a land owner’s legal and valuation costs, less likely to agree to remedial works, and more likely to require payment of betterment or more likely to strictly enforce compensation amounts where it has incurred significant cost in going through disputes or compulsory acquisition processes.
Because of the complexity of the process, the amounts at stake and the number of steps that are involved, it is crucial that a property owner gets early advice on any proposed designation, and on any proposed acquisition/taking by any Requiring Authority. There are strict time limits involved, so any delay for example in getting advice regarding a proposed designation, could mean that any right to object has expired. This in turn could mean the level of compensation a land owner receives may not be satisfactory to the land owner.
Similarly, as often accepting a compensation and other costs packaged at an early stage will be the best and least expensive option for a land owner, it is important that proper advice is sought at that stage.
Willis Legal has experienced Public Works Act professionals available to consult on any matters associated with a proposed Public Works action, or a designation under the Resource Management Act.