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Government buying your ips due to road widening etc

Discussion in 'General Property Chat' started by TMNT, 12th Feb, 2016.

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  1. TMNT

    TMNT Well-Known Member

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    Ok im happy to admit i know absolutely nothing about this topic

    But

    How often does this happen.
    A few years ago they were talking or did decide to plan a highway through a suburb in melb and were buying properties


    A few questions.

    Can they do this
    What happens if nonna and pa say over my dead body
    Do they pay market rates
    Is it compulsory
    Can this be a investment strategy
    How often does this sort of thing happen
     
  2. Nemo30

    Nemo30 Well-Known Member

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    There was an elderly woman on the news last night in that predicament. I have no idea how much they bought her house for but she definitely didn't want to go.

    She was two weeks over the deadline to move out and the govt started charging her 'rent'. I'm sure there was more to the story, but on the surface seemed a bit mean.
     
  3. Esel

    Esel Well-Known Member

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    Yes, i think it is compulsory. I think they attempt to pay a fair price but you dont get to decide what that is.
     
  4. Chilliblue

    Chilliblue Well-Known Member

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    Yes it does happen and yes you can be made to move on. Essentially both sides try to come to an agreement but private land can be acquired for public services. It can be for the entire lot or part lot.

    At the end of the day the law over rides private ownership and the Government has bigger pockets for legal fees.

    Each State varies but if you have the time you may read more here
     
    Last edited: 12th Feb, 2016
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  5. Dazedmw

    Dazedmw Well-Known Member

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    Yes. Land Acquisition Act 1986 (In Victoria at least, from memory) gives the government the powers to compulsory acquire land.

    Unless you can kick up enough of a stink in the media that public opinion makes the government rework their plan you are out luck. It's the government after all.

    Yes. In fact usually a little more to compensate for the inconvenience. Usually both sides get valuers (paid for by the government) and a negotiation happens.

    The issue becomes the timing. Say the market value is $600k and the compensation is agreed at $620k on Jan 1. The whole process takes another 9 months (governments move slowly) and by that time the market has increases 10% then the owner is out of pocket.

    Yes.

    I doubt it. Just put your property on the market and get market value.

    It happens a bit. Although the government has the power its not often popular so they avoid it if they can. However, in a major infrastructure project it will happen.
     
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  6. JacM

    JacM VIC Buyer's Agent Business Member

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    Ah, this thread is reminiscent of one of my favourite movies. The Castle. :D:D:D

    Snippets for your enjoyment courtesy of YouTube



     
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  7. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    It's worth mentioning that when this occurs, the government also includes a number of other concessions to compensate for replacement of the property, such as stamp duty waivers, CGT concessions and I've even seen cases where they'd pay for a solicitor to challenge valuations.
     
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  8. JacM

    JacM VIC Buyer's Agent Business Member

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    Interesting. Good to know, thanks @Peter_Tersteeg . In that case in some cases a compulsory acquisition might be quite welcome !
     
  9. Scott No Mates

    Scott No Mates Well-Known Member

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    Each state has it's own Act but there is a federal Act as well - the Act applicable depends upon which authority is doing the acquiring.

    Acquisition by agreement is preferable ie prior negotiation however statutory powers may be used. If you are affected by a CA, if possible use the hardship provisions of the Act to achieve an outcome within 90 days.

    As to the old dear who has to pay rent.....she copped a payout from the RMS (most houses in the area are in the high $1m range), payout also includes an allowance for disturbance, stamp duty etc, the road reservation has been on the title since Noah was a lad, houses in the area were about $50k back in the early 1970's, she doesn't own the house any longer and must pay rent to occupy (you'd be pretty p!$$ed if the vendor stayed in your newly acquired IP rent free too), unfortunately for her like others who have been displaced by the project is that there are few units in the suburb/she doesn't want a unit/loss of amenity/neighbours/familiarity of the area etc.
     
  10. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Had a couple of clients had to turn over property due to the East-West project. I can't say if they were out of pocket or not, but time would definitely play a part in the equation in a rising market.

    Even when the project failed, the government still purchased the properties as the owners decided that eventually the project will likely to ahead. The properties are devalued regardless of success of the project.

    One guy continued to live in the property for another year rent free even after he had the money in his account.
     
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  11. JacM

    JacM VIC Buyer's Agent Business Member

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  12. Nemo30

    Nemo30 Well-Known Member

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    I realise she would have received adequate compensation, but when you're that age and you've lived there a long time, it's a massive thing to be told you have to leave.... Not only your house, but also possibly friends, support structures and familiarity. I know it's needed for progress, but I really felt for her.
     
  13. Scott No Mates

    Scott No Mates Well-Known Member

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    Agreed that no amount of compensation can offset emotional disturbance but it is the price of progress. I grew up in the area, mum knows several who have been displaced but hard as it is in the property which has been home for 50+ years (people don't move much in this area) - they will get over it but in the meantime it sells papers and advertising time on tv.
     
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  14. Joshwaaaa

    Joshwaaaa Well-Known Member

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    interesting, we actually looked at a 10acre property which had a 400m side boundary on a main road which is about 30 years overdue for widening. The agent gave warning that the gov is able to take back 30m of land on that boundary and said they compensate well for it but thats all he could tell us. It put us right off the place eitherway
     
  15. Cactus

    Cactus Well-Known Member

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    Also under compulsory acquisition if your valuation is higher you can sue the government for compensation. Can receive all legal and valuation costs and 10% interest backdated and solatium usually about 1-2%!of the value of the land for hardship.
     
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  16. datto

    datto Well-Known Member

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    This caper will occur at/near Badg Creek with the new airport.

    The M7 will have an attached motorway running to the new airport and it will cross many rural properties.

    Owners in the area have recently been notified that they may be affected.
     
  17. chindonly

    chindonly Well-Known Member

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    I've been through a fairly large one through work. Compulsory resumption, but the offer was nowhere near market value. It was an unusual point of law and it dragged out over 6 years.

    Went to court, we won. They appealed, we won that. Finally settled at a reasonable amount. If we didn't fight hard and have the cash to keep it going, would have been a different story.

    Have several friends that have had private dealings in a resumption, and believe they were screwed over on value.
     
  18. RetireRich101

    RetireRich101 Well-Known Member

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    There is a solatium payment of ~$25k, normally to the person reside at the premises ,in this case your tenant. I don't think the owner get's this payment. Your tenant may get a relocation cost reimbursed.

    Government compulsory acquired my parents property. It was a acreage property with development potential. We didn't like the price they offered. We took them Land and Environmental court. Start to finished took 3 years. We didn't gain and loss much, just few grey hairs.
     
  19. TMNT

    TMNT Well-Known Member

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    Thabks for your replies everyone
    Especially dazedmw

    Veyr helpful.

    Are there any ppl who seek out potential affected sites and buy there for increased returns in equity?

    Or is it luck of the draw?
     
  20. Azazel

    Azazel Well-Known Member

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    Not very often - but often enough if it happens to you.
    I remember it happening in Brisbane, moved some houses away, then a change of government and the houses are back. noggie.jpg