Property with a Public Acquisition Overlay attached

First time here so please excuse the newbieness.

Are there any people here who own a property on a main road that has a 'Public Acquisition Overlay' over the title? Dunno if I've gotten the wording right but have seen some vendor statements with an overlay cutting through the land of interest indicating potential future planning i.e: road widening. Even more confusing is one property even advertised it had plans and permits for townhouses on a block of 440m2 despite a portion of the land being designated for future road works. How could they build if in the future a portion of the land could be used for road plans?

Someone described it to me like the movie The Castle where if they want it they can take it. Just wondering how much of a deal breaker it would be as an investment property. Hope it makes sense

Cheers

 

If the road ever gets built then the roads authority will resume the portion of affected land paying the owner compensation (have a read of the appropriate Act in your state - may be a Federal road which different rules apply).

Your effective compensation is significantly reduced as the declaration of the road has already been gazetted and marked on title ie you're buying with the knowledge that you will lose the utility of part of the land at some time in the future.

The effect of the road widening order (RWO) is that if the owner undertakes major works to the land, then they're unable to build on the affected portion of land. Plans building over this land are useless as they can't be utilised however you may still count the land in your calculations when designing ie if you have an fsr of 1.8 and 1000m2 you can still build 1800m2 however it will be over a smaller section of the land (so you might need to build 3 storeys not 2).

 

Just to add to the above, as the block is only 440m2 there possibly won't be much land left after the RWO is enacted.

Are there plans to build the road? When? Can the RWO be removed?

 

Thanks heaps for the detailed input Scott. Much appreciated! Think I dodged a bullet here big time. For a while was wondering why the vendor was selling after only buying it 18 months ago. They must have found out about the overlay after buying. The last time it was sold it was advertised as having plans and permits and this time not one word about it so maybe another warning sign. Vic Roads said the RWO can't be removed as they have plans in near future to widen road.

 

Although there may be plans to build the road, there may not be budget - that could be decades away.

I recently dealt with a site where as we didn't have budget or plans to undertake the RWO we removed it from the owner's title (otherwise we would have committed >$2m for a property which we had no foreseeable requirements. The property was still subject to other RWOfrom other authorities (so it became their problem).

That outcome caused extended delays and pain for a family seeking to release funds for personal issues.

 

Maybe not, people sell for many reasons.

They would have been aware when going in.

There are lot of houses along main roads and minor roads, all of these places could, one day, be effected.

From many decades ago, there is a section of road around Hurstville that was supposed to be widened, I will be dead before it is done, so has had nil effect on anyone there and it should have been done in the 70's !

So you just have to make informed decisions, as it could go through one day. But it will already be cheaper because of this as well.

 

Just like most of what is now Westconnex through Haberfield to Concord - earmarked in the 1950's and they have the hide to complain that they only managed 60 years extra in the house.

 

As an investment, would probably be fine, would have made no diff to rental but would have been cheaper buy in, with decades of good growth, would be happy for them to take a portion and get compo.

Actually, I cannot remember exactly, but I think they did take part of the properties along part of the road & have done exactly zip with it, road is still 2 lanes.

On a different note, people wonder why our traffic has such an effect, bit of a scam really.

 

Thanks heaps for the input. Apologies for the late reply. Can't seem to find out how much smaller the land would be once/if they take the designated land so will probably just veer away from anything with an overlay on it. Guess if it was a bigger block like 600m2 I could cop some land being taken off. To be honest I'd never heard of these overlays til I encountered this property but now makes sense with road widening.