Tunnel Acquisition Information Paper - Part 1

June, 2020

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Overview

The prevalence of tunnels is increasing in modern society as advances in technology make tunnelling a more viable option when it comes to infrastructure projects. The acquisition of underground land is generally considered to be less obtrusive compared with the more traditional surface level acquisition, however, the process is seemingly less straightforward when it comes to compensation.

This White Paper aims to bring to light some of the key differences between the two types of acquisitions (that is, acquisition of underground land, versus surface level acquisitions), and the key considerations from the perspective of a valuer. Landowners impacted by the acquisition of sub-stratum land should seek legal advice as to their compensation entitlements.

Authors

Les Brown

Director

View Profile > VIC
Amita Mehra

National Director - Research, Marketing & Strategy

View Profile > VIC

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The paper is sectioned over two parts:

  • Part one provides an overview of how to identify impacted land and the acquisition process.
  • Part two looks at two case studies, one of a surface level acquisition, and one of a below ground acquisition for a tunnel.

Identifying Impacted Properties

There may be various ways to identify whether a property is impacted by a proposed tunnel. The following are some examples:

  • If a tunnel project (or other project) has been proposed by Local, State or Federal Government,  details may be available via a project specific website such as the North East Link Website, or Victoria’s ‘Big Build’ website which is a State Government website (see links below):
  • If a project is in planning phase, details may be available via the Environmental Effects Statement (EES) which would be on exhibition via the website of the project, or elsewhere online.
    • An EES will include several technical reports, outline key stakeholders, predicted impacts of the project, and proposals to minimise adverse environmental effects (such as the acquisition of properties).
  • If a tunnel project has been formally gazetted into the planning scheme, government and local council planning records should reflect the tunnel alignment and provide a “Project Area”. This might be implemented with a Design and Development Overlay (DDO).
  • The project area may be larger than the actual tunnel alignment to capture a project works area,  as has been seen with the Melbourne Metropolitan Rail project, and the West Gate Tunnel Project.

Considerations

  • Not all tunnels appear as a ‘Public Acquisition Overlay’
    (PAO) within a planning scheme.
  • Proposed Infrastructure projects such as tunnels are often depicted on street directory maps (such as https://online.melway.com.au/melway/) providing an indication of the alignment before they are formally implemented.
  • A Vendor Statement (Section 32) is required to be provided by the vendor of a property to potential purchasers. The document should disclose all known facts in relation to the property, including details of a proposed tunnel acquisition. Therefore, the Vendor Statement should comprise details of the project which may be in the form of correspondence from the government or project authority, Planning Maps, extracts of EES documents, copies of Notices of Intention to Acquire, and the like. We have found this not to be the case. Interestingly Vic Roads Statements do not make reference to underground road tunnel projects.
  • The title of a property impacted by a sub-stratum acquisition will be updated by the Titles Office of Victoria to reflect the acquisition. There may be a time lag for this to occur and we note the marking on title will vary with the Project.

Acquisition Process

The acquisition and compensation process can vary for acquisitions of below ground land, compared with standard “surface level” acquisitions. We highlight below some of the key differences:

  • Generally we are seeing authorities use the Major Transport Project Facilitation Act (MTPFA) to govern acquisitions of below ground land.
  • Major surface level acquisitions are governed by the Land Acquisition and Compensation Act (LACA) or other Acts.
  • The MTPFA sets out a process whereby the responsible Minister can declare sub-stratum land to be “Project Land” by Order in the Government Gazette. The effect of such an Order is that the Project Land vests in the acquiring authority on the date of Gazettal.
  • With an acquisition of underground land, a claim for compensation must be made by the owner of the ‘acquired land’ within two years of the acquisition, should there be a claim.
  • It is then the responsibility of the authority to provide a response to the claim.
  • This varies from a standard surface level acquisition whereby the authority is required to make an offer of compensation 14 days after the acquisition occurs.

Considerations

  • Was the title unlimited in depth, prior to the acquisition? (Titles created prior to 1891 were unlimited in depth. Titles created after this time are often limited in depth to 50 feet.)
  • If the property is the subject of a strata or stratum plan who owns the acquired land and who can make a claim?
  • Depth of acquisition – What will the title be depth limited to? How deep will the tunnel infrastructure be?
  • Known vs Unknown Facts – Unknown facts are likely to be high.
  • There will be a ‘blot’ or reference on title reflecting the acquisition.
  • In addition to the acquisition, there might be inconveniences during construction such as noise, vibration, road works.
  • There may be risk of damage to properties during construction, as exampled by WestConnex in Sydney.
  • Development potential may be reduced or restricted. Seeking planning approval may become more difficult, costly or lengthy.
  • Additional due diligence may be required for development Projects including obtaining expert engineering advice.
  • The landowner is only entitled to compensation if it can be proved that there has been an impact on value.
  • The tunnel (or other project) may result in a positive outcome for the area in the future (such as less cars on roads).

Property Acquisition Process

Our Services

Litigation and Acquisition

The Litigation and Acquisition team is recognised as one of Victoria’s leading independent experts in compulsory acquisition and litigation matters.

We have extensive experience in compulsory acquisition and litigation matters across all facets of real property throughout Victoria acting on behalf of private owners, corporations and government bodies.

  • Assisting with Compulsory Acquisition Claims
  • Assisting with Loss on Sale/Financial Loss Claims
  • Attending Compulsory Conferences
  • Giving Expert Evidence in VCAT and Supreme Court Proceedings

If you are impacted by land acquisition, please contact a member of our team.