Quick answer
When an authority acquires an easement, such as for a pipeline or power line, the owner is generally entitled to compensation. A valuer commonly compares the value of the land before the easement with its value afterwards, and considers other losses the law allows. The rules differ between states.
An easement acquisition, also described as the acquisition of an easement, happens when an authority takes a right over part of your land, for example to run a pipeline, a power line or an access road, while you keep the title. The law generally requires compensation, and a compensation valuation is how the amount is tested.
We are certified registered valuers, not lawyers, so this guide sticks to how the valuation side works. A solicitor advises on your legal rights and on the process. Our property valuers give you and your solicitor an independent view of the figure.
In this guide
What is an easement acquisition?
An easement is a right for someone else to use part of your land for a stated purpose. When an authority acquires one under legislation, it does not take the land itself, but it limits what you can do on the strip affected. Compulsory acquisition of a whole property, or of part of it, is dealt with under the same legislation in most states.
What can compensation cover?
The details depend on the legislation that applies to your matter. In general, compensation looks at:
- The rights taken: the value of the easement itself, such as the loss of use of the strip
- The land you keep: any fall in the value of the rest of the property because of the easement (often called injurious affection or severance)
- Other losses the law allows: which can include disturbance and certain costs, depending on the state
How an easement is valued
A common method is the before-and-after approach. The valuer values the land as it was before the acquisition, values it again as it is after the easement, and treats the difference as the starting point for compensation. Another approach adds up the separate parts of the loss. Which method suits depends on the property, the easement and the law, and the report states which one was used and why.
The evidence behind the figure matters as much as the figure. Good reports show the sales or rental evidence relied on, the extent of the easement and how it affects the use of the land that is left.
Received a notice about an easement?
Send us the notice and the property details. We will confirm what a valuation involves and the fee before any work begins.
Why the state matters
Compensation rules are state law. In New South Wales they sit mainly in the Land Acquisition (Just Terms Compensation) Act 1991, and the Valuer General plays a role in determining compensation. In Victoria the Land Acquisition and Compensation Act 1986 applies, and Valuer-General Victoria provides valuations for government land. Other states and territories have their own Acts.
Because the law differs, the valuer works within the legislation that applies to your matter, and your solicitor confirms the legal position.
What to do if you receive a notice
A few practical steps help, whichever state you are in:
- Keep the notice and note any dates and time limits, and ask your solicitor how they apply
- Gather the title, plans, past valuations and details of how the land is used
- Get an independent valuation to understand how any offer was worked out
- Speak to a solicitor before you agree to anything
Mistakes to avoid
Common mistakes:
- Accepting an offer without knowing how it was worked out. An independent valuation helps you understand it.
- Looking only at the strip. The effect on the land you keep can be a significant part of the claim.
- Missing time limits. Notices and claims have deadlines. Ask your solicitor early.
- Assuming the same rules apply everywhere. The legislation differs between states.
Key terms explained
- Easement
- A right for someone other than the owner to use part of land for a stated purpose, such as a pipeline, power line or access.
- Compulsory acquisition
- When a government authority acquires land or an interest in land under legislation, usually for a public purpose.
- Before-and-after method
- Valuing the land before and after the acquisition and treating the difference as the starting point for compensation.
- Injurious affection
- The loss in value of land you keep because of the acquisition or the works.
- Severance
- A loss that arises when part of a property is taken and the remaining part is worth less than it was as part of the whole.
Need a Easement and compulsory acquisition valuation? Talk to a valuer.
Tell us the property, the date you need the value for and what it is for. We will tell you what is needed and what it involves.
Free first call. Fee confirmed before work starts. Certified Practising Valuer. Australia-wide.
Sources and further reading
- Holding Redlich: Four steps for valuing easement acquisitions in NSW
- Land and Environment Court of NSW: Compensation for compulsory acquisition of land
- Land Victoria: Valuations for government land
This is general information, not tax advice. Speak to your accountant or tax adviser about your own position. A valuation sets out market value at a stated date. It does not work out your tax.