Technical Reference

36510  —  Just Terms & Statutory Compensation

Compulsory Acquisition & Compensation Valuation (36500)
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Overview

Node 36510 addresses the statutory framework requiring an acquiring authority to compensate a landowner on just terms when property is compulsorily acquired. The just terms principle is constitutional in origin for Commonwealth acquisitions and given effect through statutory compensation schemes at state level, with the valuer playing a central role in quantifying the compensation properly payable.

Just terms compensation regimes typically recognise several distinct heads of claim beyond the market value of the land itself, including disturbance costs reasonably incurred as a consequence of the acquisition, special value attributable to the property’s particular suitability for the owner’s purposes, and injurious affection to any retained land. A valuer engaged in a compensation assessment must consider each applicable head of claim, not market value alone.

This node is intended for valuers, government acquiring authorities, affected landowners, and legal practitioners engaged in compulsory acquisition matters, applying the general methodology addressed in node 36100 and the professional standards addressed in node 36200 to the just terms compensation context specifically.

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Scope & Boundaries

This node addresses the just terms compensation framework and its constituent heads of claim. It does not address the specific methodology applied to value land actually taken, addressed in node 36520, or the assessment of severance and injurious affection to retained land in detail, addressed in node 36530.

It does not address general valuation methodology in the abstract, addressed in the 36100 sub-series, or the professional standards and reporting framework applicable to all sectors, addressed in the 36200 sub-series.

Scope Note

This node describes the general just terms compensation framework as at the time of writing. The specific heads of compensation available and their assessment should be confirmed against the applicable acquiring legislation and current case law.

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Key Concepts

Just Terms Principle
The requirement, constitutional for Commonwealth acquisitions and statutory for state acquisitions, that a landowner be fairly compensated when property is compulsorily acquired.
Heads of Compensation
The distinct categories of loss for which compensation may be claimed, typically comprising market value, disturbance costs, special value, and injurious affection to retained land.
Disturbance Costs
Costs reasonably incurred by a landowner as a direct consequence of the acquisition, such as relocation costs and legal or valuation fees, forming a distinct head of compensation from market value.
Special Value
Additional value attributable to a property’s particular suitability for the owner’s specific purposes, beyond its general market value, recoverable in defined circumstances under just terms compensation regimes.
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Regulatory & Legal Framework

  • Land Acquisition (Just Terms Compensation) Act 1991 (NSW)
    State land acquisition authorities
    And equivalent legislation in other states sets out the statutory heads of compensation and assessment process.
  • Section 51(xxxi) of the Commonwealth Constitution
    High Court of Australia
    Establishes the constitutional requirement that Commonwealth acquisitions of property be on just terms.
  • Lands Acquisition Act 1989 (Cth)
    Commonwealth acquiring authorities
    Implements the just terms requirement for Commonwealth acquisitions.
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Practical Application

Compensation assessment considers every applicable head of claim, not market value in isolation.

ScenarioApplicationOutcome
A business owner’s premises are compulsorily acquired for public infrastructureThe valuer assesses market value together with disturbance costs and relocation expensesCompensation reflects the full statutory heads of loss, not market value alone
A landowner claims their land held special value for a specific existing useThe valuer assesses whether special value is separately recoverable under the applicable just terms legislationCompensation may include an amount beyond general market value where justified
A landowner disputes an acquiring authority’s compensation offerThe valuer prepares an independent assessment addressing each statutory head of compensationThe assessment supports negotiation or tribunal determination of just terms compensation

Findings are presented on the basis of data and evidence alone.