Changing the landscape: The land acquisition process under the Public Works Act

Over the last few years the Waikato landscape has undergone some significant changes. The Wairere Drive Extension and the Waikato Expressway are just two examples of important projects helping to grow and connect the region. 

The Public Works Act 1981 provides for the land needed for these projects to be accumulated and set aside for a number of years. This allows local councils to plan for the future and helps to ensure that these new roads and developments are able to go ahead. 

It is important to consider the implications of the Act and stay informed about public works, in particular if you are purchasing or selling property. 

What is the Public Works Act 1981?

The Public Works Act gives power to the Crown to acquire land for public works, and sets out the payments that may be made to the former owners of the land. The Crown may take land for a wide variety of purposes, such as the building of new roads, schools or parks. The Act does not authorise these projects, rather it provides for the acquisition of land, and land can only be acquired through the process set out in the Act. Land acquired in this way is referred to as ‘designated’ land. 

Land Information New Zealand is responsible for administering the Act on behalf of the Crown. A number of organisations are able to apply for land under the Public Works Act. Usually these designating authorities will be State Owned Enterprises or territorial authorities such as your local or regional councils. 

When land is required for a public work, the Crown will engage a Land Information New Zealand accredited supplier to carry out the negotiations. 

Under the Public Works Act the Crown may choose to acquire the whole or just a specified part of the land. 

Land acquired by agreement

The accredited supplier will obtain a valuation from a registered valuer. The owner of the property may also obtain an independent valuation from a registered valuer. These valuations are used for negotiation and agreement on compensation between the parties. The reasonable cost of this advice may be reimbursed if the advice is necessary to quantify the loss of the owner. 

If parties cannot agree on the amount of compensation payable, the Land Valuation Tribunal may be used to decide the compensation. 

Once an agreement has been reached by the parties, the accredited supplier will prepare an agreement for sale and purchase. When this agreement is signed, it becomes a binding contract. The land will be transferred to the Crown by the normal conveyancing process, with the land owner acting as the vendor and the Crown as the purchaser. 

Compulsory acquisition

If a voluntary agreement between the parties cannot be reached, the Public Works Act provides for compulsory acquisition of land by the Crown. 

If the owner of the land in question objects to the acquisition of the land by the Crown, an objection may be made to the Environment Court. 

Compensation

Under s 60(1) of the Public Works Act affected land owners are entitled to full compensation for acquired land. The compensation provisions of the Act aim to ensure that land owners are left in a position that is no better or worse than their original position. Compensation is available to the owners of the land, as well as parties who have an interest in the land (such as a tenant), if that interest is acquired under the Act. 

Compensation will usually consist of the value of the land. This is determined by considering what the land would be expected to sell for on the open market by a willing seller to a willing purchaser. 

These include compensation for: 

• Any damage caused by the acquisition to any remaining property; 
• Any depreciation in the value of the land retained; and 
• Any disturbances caused by the acquisition process. 

Compensation for disturbance is inclusive of inconvenience, removal costs and contribution to valuation, legal and other professional costs incurred by the party. 

How do I know what is happening in my area?

Often land owners are aware of these projects many years before construction begins. Owners are not able to claim compensation under the Act and then sell their property to a third party. The process under the Public Works Act means that the Crown becomes the new owner of the land. 

If you are looking to purchase a property and are unsure about how these projects may affect your new property, it is advisable to do your research. 

Websites such as Land Information New Zealand and New Zealand Transport Agency both provide up to date information and plans for these projects. A Land Information Memorandum (LIM) may also list any proposed or existing transport network projects in the local area. 

The Public Works Act is a significant piece of legislation which helps to shape the local landscape. If you are considering purchasing or selling it is important to be aware of local developments and how these may affect your property. 

If you would like further information please contact Dale Thomas on 07 958 7428.