As part of the process for acquiring your property, the organisation in charge of the process will utilise the services of an independent valuer in order to inspect and value your property.
How your property is valued
Your property will be inspected by an independent valuer, in order to determine the amount of compensation that will be given via the market value of your property, which is how much it would have been sold for without a public project taking place.
This valuation takes into account various factors including the size, location, zoning, and improvements of your property, while also looking at sales in your area, plus building/pest inspections.
The valuation report
After your property has been inspected by an independent valuer, they will need to provide a valuation report which covers the date of valuation and inspection. Your property’s dimensions and areas will also be covered in the report, especially if there are any legal limitations that would hinder development, plus a record of any improvements you have made to the property, such as a pool, etc.
The valuation report will also include plans such as a floor and site plan, with a list of inclusions, while outlining all permissible land uses under your local government codes. The report details the class of the land being valued alongside how it may be used in the future, with information on rental or sales details/values taken into account as part of the valuation. Occupants of the property and proof of property sales are also included in the report.
Getting your own valuation
Utilising your own independent valuer is also important, as you can ensure that your property has been independently assessed in line with the current market value. Changes and fluctuations in the market may also affect your property’s value, a factor that will be taken into account when both your valuer and the acquiring agency’s valuer negotiate compensation.
Valuer qualifications
Any valuer part of a compulsory acquisition process needs the necessary qualifications, including being a full member of the Australian Valuers Institute, Australian Property Institute, and the Royal Institution of Chartered Surveyors.
Compensation
There are various types of compensation you may be entitled to, which can include the market value of your property, Special Value Compensation which applies if your property has financial value apart from its market value such as if you have property on land that may directly affect your business if acquired, such as a farm, park, etc which are integral to your business’s operations, and Severance Compensation, for when an acquisition removes part of a property leading to a lower overall value.
Other forms of compensation also include Disturbance Compensation, which can cover legal, valuation, relocation, stamp duty, and mortgage discharge costs. There’s also Disadvantage Resulting From Relocation Compensation, which takes into account factors such as how long you’ve lived in the property, as well as compensation for increases/decreases in the value of other parts of the property that aren’t being acquired, which may be affected if only part of your property needs to be acquired.
Negotiation and agreement on your compensation
If you have your own valuation report, it can be exchanged and compared with the report from the acquiring agency’s valuer. This can be organised by your Acquisition Manager, who will arrange a meeting with you and your valuer to negotiate the amount of compensation you will receive.
After the acquisition of your property has been completed, the organisation acquiring it will pay the valuation fees that have been negotiated and agreed upon. Before this can happen though, the valuer needs to be qualified, and the valuation report needs to be complete. The valuer must also have discussed and signed the report with the agency in charge of the acquisition.
Your Letter of Offer
Once all valuations on both sides have been completed, you can expect to receive a letter of offer from the organisation acquiring your property. The details outlined in this letter include your property’s market value and the compensation you will receive, decided from the information in the valuation reports plus negotiations.
Once an agreement has been reached
Much like a property sale, once you’ve accepted the offer, the acquiring agency will ready all necessary contracts via its lawyers, while making an advance payment of the compensation you will receive.
Relocation support
Similar to the sale of a property you’ll need to discuss the settlement date once you’ve reached an agreement. Also on the settlement date itself, the acquiring agency will inspect the property to ensure it has been left in an adequate condition and that it has been completely vacated.