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Project title Date Month 2014
Melbourne Metro Rail Project – EES Inquiry
4 October 2016
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The establishment of a scheme for the provision of low or interest-free loans to dispossessed home owners
The creation of a “secondary project area” or “impact area” beyond the compulsory acquisition zone that affords property owners in that area rights – including but not limited to the opportunity to sell their property to the MMRA
An effective and inclusive communication strategy between the MMRA, the contractor and affected occupiers and property owners including about owners’/occupiers’ rights
A dispute resolution process including an independent reviewer and independent ‘before’ and ‘after’ building condition reports at no cost to owners/occupiers
Our Proposals
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Property not acquired but adjacent to the project area may face problems such as:
Nuisance
Diminution to property value without statutory rights to compensation
Losses cased by damage to property and plant as a consequence of construction
For those acquired, the gap between compensation and true cost of purchasing an equivalent ‘replacement’ property is a key problem – ‘market value’ is not the same as ‘replacement value’
Common Legal Problems & Gaps in Legal Protection
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‘Market value’ is not the same as ‘replacement value’: Forced from the neighbourhood
23.1%
REGIONAL RAIL LINK & EAST·WEST LINK· AVERAGE OWNER RELOCATION DISTANCE
lOO+km 10.3%
10-19km
12.8"
1·2km 12.8%
3-4km 20.5%
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Hypothetical: The Melbourne Metro scenario
1-4km: 5-9km:
10-19km: 20-39km:
33.3% 10.3% 12.8% 23.1%
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Proposals
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Proposal 1: Secondary Project area or ‘Impact Area’ The Committee should recommend that any contractor adopt a secondary project area or ‘Impact Area’ immediately outside the project boundary within which owners will have rights under a voluntary scheme Property owners within the Impact Area may be given an opportunity to:
+ sell to the Authority; + make a claim for loss on sale similar to that type of claim pursuant to
the Planning and Environment Act 1987; or + make a claim for the loss of value to their property.
Each of these options should be open to the affected owners
Impact on owners/occupiers immediately adjacent to project area
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+ How can the cost of the project most fairly be spread to avoid leaving a
disproportionate burden on the unlucky few who are significantly affected but have no statutory rights to compensation?
+ Voluntary purchase schemes have pitfalls
Impact on owners/occupiers immediately adjacent to project area
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Key problems with leaving compensation in the voluntary sphere: + The criteria for inclusion in the scheme can be arbitrary – and may not be
open to challenge + Categories of compensation are invariably more limited than under the Land
Acquisition and Compensation Act 1986 + Voluntary schemes generally only provide for:
+ Market valuation + Limited disturbance costs (e.g. stamp duty and conveyancing costs) + Limited professional legal expenses
Impact on owners/occupiers immediately adjacent to project area
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Key problems with leaving compensation in the voluntary sphere: + Solatium is not paid - those selling under a VPS often feel a similar
experience of ruin to their home as those served with a notice of acquisition + Compensation for valuation is based on “unaffected market value” but
excludes other important valuation principles such as “highest and best use” + Compensation is not available for severance, special value, interest and
some disturbance losses
Impact on owners/occupiers immediately adjacent to project area
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Key problems with leaving compensation in the voluntary sphere: + No recourse to VCAT or another independent decision maker means that
the valuer retained by the Authority effectively plays the role of ‘judge & jury’ + Arbitrary limits are usually placed on the reimbursement of professional
expenses – together with the exclusion of legal rights other than to market value - inhibit some clients with complicated circumstances from appropriately exploring or maximising their claim
Impact on owners/occupiers immediately adjacent to project area
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Proposal 2: Effective communication
+ The Contractors’ performance criteria should include requirements for communication with affected property owners and residents which provide regular, up to date information about planned activities and progress and matters likely to affect the use and enjoyment of properties
+ A timetable of works should be provided well in advance and updated regularly including in real time, where possible
+ Multiple channels of communication, including via an internet portal, app, social media, text messages, email or phone should be readily available
+ Any communications plan must include information about owner/occupier rights
Impact on owners/occupiers immediately adjacent to project area
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Proposal 3: Dispute resolution scheme The Authority should be responsible for establishing and managing a dispute resolution scheme to receive and handle complaints and claims arising in relation to the project
Any Scheme should: + Receive complaints/claims in relation to property damage (including interruption
to services), breaches of performance standards, nuisance/disturbance to amenity claims including hardship applications for temporary relocation
+ Set time frames for response to all enquiries to the Scheme + Provide power to the decision maker to require the provision of further
information by claimants
Impact on owners/occupiers immediately adjacent to project area
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Any Scheme should:
+ Make the determinations of the decision maker binding on the Contractor/Authority in relation to certain types of Claims
+ Provide opportunity for internal review with an independent reviewer – the
cost to be borne by the Authority (or with caps on contribution required by Complainants)
+ Preserve common law and statutory rights of claimants – e.g. to sue for
nuisance or property damage, and for any rights under the LACA or PEA
Dispute Resolution Scheme…
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+ An element of any the dispute resolution scheme should be an entitlement
of property owners and occupiers to obtain reports of a independent, qualified building surveyor that record the condition of their property before and after the construction
+ Reports should be paid for by the contractor
+ Reports should be binding on the contractor as an accurate record of the
condition of the property prior to the commencement of work
Dispute Management - Property Condition Reports and Dilapidation Surveys
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Proposal 4: Low interest or interest-free loans The Authority should establish a scheme for low or interest free loans to assist dispossessed homeowners in circumstances where they are able to demonstrate their inability to purchase a replacement property in the local area.
Acquired properties
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(1) If- (a)the whole or any part of land in which an acquired interest subsists is, on the date of acquisition of
that land, occupied by the claimant as the claimant's principal place of residence; and (b) the market value of the claimant's interest in the land does not exceed the amount prescribed from time to time by the Governor in Council; and (c) the amount of compensation payable to the claimant under this Part is insufficient to enable the purchase of a similar interest in land to be used by the claimant as a principal place of residence providing accommodation reasonably comparable with the accommodation on the acquired land- the Authority may, and must if directed by the Tribunal or the Court on the application of the claimant, grant a loan (with or without interest) of such amount as the claimant may reasonably require, in addition to the compensation payable, to enable the claimant to purchase such reasonably comparable accommodation. (2) Any loan granted under subsection (1) must not exceed an amount equal to the difference between the market value of the interest of the claimant which is acquired, as assessed for compensation under this Part, and the amount prescribed under subsection (1). …
Section 45 of the Land Acquisition and Compensation Act 1986: Loans to dispossessed home owners
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With every project there are examples of the extreme hardship caused by forced relocation. Small distances can make a big difference to amenity and lifestyle – + proximity to childcare, schools, work, medical treatment centres, family
supports, shops + public transport or other non-car transport options, ability to walk rather than
drive to regular places of work/care/supplies + age as a factor of vulnerability + relationship breakdowns + neighbours and community who provide care and support + earnings and ability to secure commercial finance + other factors leading to inability to re-enter the housing market
Low interest / interest-free loans
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Questions
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Thank you
