36530 — Injurious Affection & Severance
Overview
Node 36530 addresses compensation for the diminution in value of land retained by an owner following a partial compulsory acquisition, arising through severance of the original holding and injurious affection caused by the acquiring authority’s use of the land taken. These heads of compensation address loss suffered by the retained land itself, distinct from the value of the land actually acquired.
Severance compensation addresses loss arising from the physical division of a landholding, such as reduced practical utility where a partial acquisition splits a parcel into separated portions. Injurious affection compensation addresses diminution in the value of retained land caused by the acquiring authority’s use of the acquired land or the works constructed on it, such as noise, restricted access, or altered outlook. Some statutory regimes also recognise betterment — an offsetting reduction in compensation where the retained land derives an increase in value from the same public work.
This node is intended for valuers, 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 assessment of severance and injurious affection specifically.
Scope & Boundaries
This node addresses the assessment of severance and injurious affection to land retained following a partial compulsory acquisition. It does not address the valuation methodology applied to land actually taken, addressed in node 36520, or the broader statutory heads of just terms compensation, addressed in node 36510.
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.
This node describes the general principles applicable to severance and injurious affection as at the time of writing. The specific entitlement and assessment methodology applicable to a given acquisition should be confirmed against the applicable acquiring legislation and current case law.
Key Concepts
Regulatory & Legal Framework
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Land Acquisition (Just Terms Compensation) Act 1991 (NSW)State land acquisition authoritiesAnd equivalent legislation in other states sets out entitlement to compensation for severance and injurious affection.
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Roads ActState road & public works authorities(state-based, for example the Roads Act 1993 (NSW) and equivalent public works legislation in other states) is frequently the source of the works giving rise to injurious affection claims.
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ANZVGN guidance notes on compulsory acquisition valuationAustralian Property Institute & Property Institute of New ZealandProvide guidance on assessing severance and injurious affection.
Practical Application
Severance and injurious affection are assessed as distinct heads of loss to the retained land, separate from the value of the land actually taken.
| Scenario | Application | Outcome |
|---|---|---|
| A rural holding is bisected by a new highway corridor | The valuer applies before and after methodology assessing the reduced practical utility of the two separated portions | Compensation reflects severance loss additional to the value of the land taken |
| Retained land adjoins a newly constructed freight rail line built on acquired land | The valuer assesses injurious affection arising from the noise and amenity impact on the retained land | Compensation reflects the diminished value of the retained land |
| Retained land gains improved access from a new public road built on acquired land | The valuer considers whether betterment should offset any injurious affection claim | Compensation reflects the net effect of the works on the retained land’s value |
Cross-Series References
Findings are presented on the basis of data and evidence alone.
