As this year’s General Election looms closer, the various political parties contesting the election are releasing their election policies. High on the priority list for the major parties are roading and infrastructure projects. Regardless of the outcome of the election, one thing is certain – a number of roading and other transport upgrades and projects will kick off as a result – and your property and business may be affected.
In this article, we summarise the process of compulsory acquisition – how the government acquires private land for public projects – and your rights if you are the subject of or affected by a proposed project. We have also summarised the key infrastructure policies from the major parties.
Any major infrastructure projects will require a designation and acquisition of land by the Crown or relevant authority. Prudent property owners and occupiers situated in or near the identified infrastructure project areas should understand their rights and their ability to have a say on how a project will affect them.
How is land acquired for a public work?
The Public Works Act 1981 (PWA) enables the required land to be taken by compulsory acquisition, if agreement cannot be reached with the landowner first. We summarise the main steps in the process below.
The land is identified as being required for a public work.
Initial informal negotiations between the landowner and the acquiring authority can occur.
A “notice of desire to acquire land” (Notice of Desire) is served on the landowner and registered on the record of title.
The landowner may agree to sell the land and enter into good faith negotiations with the acquiring authority for sale terms.
Acquisition by agreement
The acquiring authority provides an independent valuation of the land to the landowner.
The landowner obtains its own separate current market valuation of the land.
The two valuations form the basis for negotiation, and a sale price is agreed.
An acquisition agreement is executed by the parties, which must be accepted by the Minister for Land Information New Zealand.
Three months after the Notice of Desire is issued, if the landowner does not respond or refuses to negotiate, a “notice of intention to take land” (Notice of Intention) may be served on the landowner and published in the New Zealand Gazette.
A Proclamation is made and published in the New Zealand Gazette, and the land is vested in the Crown or the acquiring authority.
What rights do landowners have?
Once a Notice of Desire is served: the acquiring authority is required to negotiate with the landowner to see if acquisition can occur on a ‘willing buyer willing seller’ basis.
Once a Notice of Intention is served: the landowner can make a claim for compensation; or
the landowner may object to the notice in the Environment Court.
If the land is acquired by agreement:
the landowner will be paid the agreed sale price for the property; and
the landowner is entitled to be reimbursed for its reasonable valuation, legal or other professional advisor costs related to the sale.
If land is compulsorily acquired: the landowner is entitled to full compensation. A claim for full compensation can first be applied for to the requiring authority, and if not accepted, then a claim can be filed in the District Court.
If the land is no longer required for a public work: it must be offered back to the landowner to purchase.
What rights do tenants and other occupiers have?
An owner of land includes a person who occupies land under a lease, sublease or licence for the purposes of the Public Works Act. It does not include a residential tenancy or statutory tenancy.
Tenants and other occupiers of land being acquired have more limited rights under the PWA:
- If a Notice of Intention is issued, then any person with any interest in that land may object to the Environment Court to the land being taken. However, objections can only relate to the taking of land, not the amount of compensation payable.
- Limited compensation rights may be available for tenants and other occupiers where an eligible leasehold or licenced interest is acquired by the acquiring authority, but this will depend on the circumstances.
How else can a landowner or occupier have a say in how the project will affect them?
Early engagement: In anticipation of each infrastructure project, the acquiring authority must give a Notice of Requirement (NOR) to the relevant Council to include a designation for the public work in the District Plan (Designation). Typically, NOR’s are publicly notified, and enable affected landowners and occupiers to lodge submissions to be heard. Through this process, landowners and occupiers can seek changes to the planned project to avoid or mitigate the impact of the project on their property.
Forced acquisition: A landowner can apply to the Environment Court to order the requiring authority to acquire or lease the entire property. This would be beneficial to owners or occupiers of land that, due to the NOR or Designation, either:
- are unable to achieve a market value sale of the property; or
- are prevented from reasonably using the land.
Note that only the landowner or occupier at the time when the NOR or designation was created can apply to the Environment Court for such an order, and not subsequent landowners or occupiers.
If your property is potentially impacted by a major infrastructure project, we recommend you seek advice early to understand the potential impact on your property and/or business operating from the property, and what practical steps you can take to achieve the best outcome.
For further information on parties transport and infrastructure policies, please visit Policy.nz
This article was co-authored by Olivia Manning, Senior Solicitor in our Environment team.
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