Anyone have any knowledge on government resumptions of property. I’m in Brisbane.
Situation… just about to lodge – D.A – 7 apartments on one of our properties. Plans everything ready to go etc etc.
Fortnight ago announcement made on Gov. infrastructure project and our property affected.
Obviously hand brake pulled on.
Question now is what compensation are we entitled to and how would this be calculated in our situation as value would obviously been added just for the DA alone and we were planning to commence construction in Jan/Feb 11.
Welcome any feedback
Knowing Council, especially the BCC, if the DA isn't actually lodged they 'could' argue it doesn't exist, thus the uplift in value on the property doesn't either. If you tried to lodge now, they could argue that you 'should' have known about the Cross River resumptions therefore its not 'their' fault.
Playing devils advocate here, but I'd suggest going them for anything above fair market value, given you havent' actually lodged the DA, is going to be difficult. I only say that a) as an opinion obtained from having watched people at work here to DAs all day and hearing their conversations, and b) based on media reporting on how sensitive the resumptions issue is with residents and home owners (rightfully so).
Best thing to do is seek legal advice now rather than later. You may be able to get part compensation for costs incurred prior to the media release as prior to that point you'd acted on information received from BCC in lodging the DA without objection etc…
again, just pulling rabbits out of a hat here..
Matt. thanks for your input…. and so starts the legal costs of about $500 a hour…….lol…..the joys…..
Good luck with it Beedie, I hope you have a win.
1 don’t go legal yet, they are useless unless used in conjunction with a valuer who is better positioned to give advice on the current situation.
2 if you have not yet been advised in writing by the authority acquiring your property see point 1, you may still be able to submit the da
3 the highest & best use of the property is that for which it is zoned at the time of gazettal of the proposed acquisition. So if the land is zoned medium density prior to CA , then it will be valued accordingly – you may lose out on some of your costs to date but discuss that with your valuer, see the heads of consideration.
4 await notification of CA,, read a copy of the relevant Act for ca, state or federal, they differ significantly.
Scott, have pretty much come to the same conclusions however time is of the essence as our business plan was to buy & develop the property.
At this stage only advise given is a state government letter indicating that "Cross River Rail" project has been endorsed by government and if approved mid next year that our property is directly impacted.
We have met with the government representatives and they inform us that the project is still not funded and any CA could be months away. Normally they resume just prior to commencement which could be 12 to 24 months. Who would know…….
Catch 22. Assumable outcome if we proceed to submit DA… council would refer it back to the project and get caught up in “never never land” so to speak. On the other hand we can’t afford to just be in limbo to meet their time frames as this aren’t a buy and hold business plan our intentions and finances were geared up to develop the property from the outset with construction ear marked for early next year.They have indicated that we can apply for early acquisition via their “Hardship Policy” which is fine but what mythology would a valuer use to ascertain highest & best use of the property considering the catch 22…. A raw site or DA approved site. We can clearly demonstrate all DA requirements were with our town planner ready for submission on the same week as their announcement….What is “just and fair” compensation here…..Obviously none of the profits of the development we would have realized over the next 12 months……. What “special value” can be applied in this situation? ……… Can’t avoid the legal side but admittedly useless unless used in conjunction with a valuer
You have good insight by the way…… what field are you in???
Qld Governments – “Acquisition Hardship Policy” link
http://www.derm.qld.gov.au/about/policy/documents/2594/glp_2006_2594.pdf
We applied and it has been accepted…. valuers to be called in both sides for the purpose of commencing negotiations
Will update this thread for others future reference
good to hear.
Valuers did their thing this week and verbally indicated for what its worth consideration be given to view it as a DA site under "best and highest use"
From their valuers experience government dealings on resumption/ acquisitions cases are very fair and reasonable … even saying he would consider buying property within areas knowing there may be a possibility of future resumption.. ….Go figure…… Maybe that should become another investment strategy………..
….. lolNever discount that idea Beadie – the unknown is a powerful tool in the negotiation process when buying. If the vendor & agent are not fully acquainted with a proposal (and you are prepared for a long term hold, until there is certainty and the infrastructure is declared or built), then you are in the driver's seat.
Eg: if the property is on a main road (depressed price anyway) and there is a new road tunnel to be built under/near the property which will remove traffic from the road (just like the M2 at Epping or houses affected by the Lane Cove Tunnel). They were resumed for a 'fair price' but have resold at very good prices due to the certainty that the infrastructure has delivered (and the visibility that they are near whatever road).
I have a block that sits adjoining a rail corridor – the proposal sits about 30-40 m below the street surface – who knows the impact? But negotiating the deal when I had more information than the vendor/agent made it a breeze to pick up an easy X0%.
Scott No Mates wrote:Never discount that idea Beadie – the unknown is a powerful tool in the negotiation process when buying. If the vendor & agent are not fully acquainted with a proposal (and you are prepared for a long term hold, until there is certainty and the infrastructure is declared or built), then you are in the driver's seat.Scott most definitely if the process of normal resumption is that fair (pricing wise) might be a good strategy for the right investor.
Scott, your right my friend……. the valuers are the key. ….. It all starts there before the legals and the negotiation.
I have to say that the process is being conducted professionally and sympathetically by the authorities. They are no inklings that they are trying to take advantage of the situation…..
Taking away all the anxiety /emotions associated with property owners facing resumption the process (at least here in Qld) appears fair and just.
We have now reached verbal agreement after their and our valuers submitted their reports and the process also allows the property owner to be compensated for reasonable costs of the valuation and legals…
We are trying to bed it down on contract by xmass……….. Keep you posted…..
"How we made over $500,000 in 27 month by being resumed"……….should be a headline……….lol …………
We settled Friday. …… would have obviously been better outcome if we had developed the property but considering the situation …. a good outcome ………… as my above post no issues with the handling and conduct of the government depts involved. credit to them actually…….
Scott No Mates…… you may be opinionated but very wise …..thanks for your input my friend and hope this thread helps others that may find themselves in a similar situation.Back to shopping for next couple of projects to put in the pipeline…………….
Congratulations Beside. Glad to hear that it has been resolved with all parties happy with the outcome. Just remember to put aside some of the windfall for your cgt bill when it falls due. This should be calculated on your payout less any ‘compensation’ paid.
Thanks Scott,
It gets better………There is Capital Gains Tax rollover option for resumptions cases where by if you repurchase another property within 12 months to replace the property that was resumed you rollover the GCT into that property etc. so my accountant tells me……Was hoping to roll it over as part of another development that is coming out of the ground as we speak but apparently cant do that………..Shopping around for a couple of sites now any way to move onto ………. so all good……………..
All good news. Just check if you need to put all of the payout ‘into’ the new property or if it can go into an offset a/c, then ‘redrawn’ for use on your other ventures.
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