Property owners flex people-power

ROB STOCK
Last updated 05:00 11/11/2012

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Auckland Transport has written a "cease and desist" letter to west Auckland ratepayer-activist Garry Osborne asking him to stop sharing details of offers and settlements with fellow residents involved in negotiations over compulsory land acquisitions.

Auckland Transport's Michael Riley last week accused Osborne - who has permission from members of his Te Atatu Peninsula Owners Group to circulate the information - of confusing one property owner and leading her to believe that Auckland Transport's offer of compensation was "less than fair".

Riley wrote that such details were "commercially sensitive" to the owners.

Osborne, who reckons he's learned a thing or two about getting the fairest deal possible when a local council uses the Public Works Act to acquire a portion of your land, isn't likely to be fazed by the demand.

He is one of just over 100 property-owners who will be required to sell Auckland Transport some of the land on which their houses or shops stand to allow road-widening work at the State Highway 16 exit to the West Auckland suburb of Te Atatu.

The area is probably not the nicest in New Zealand, with 38,000 vehicles passing by each and every day. If successful, the road-widening, scheduled to be completed in 2013/14, may bring even more traffic.

Osborne, who is notorious among local body staff for his forceful questioning of local authorities and service providers, says when councils come knocking, people need strategies to ensure they do not get steamrollered into accepting inadequate compensation.

Under the Public Works Act there is a process which acquiring authorities (this can include the Government and also certain utility companies) must follow.

But Osborne says the experience of the Te Atatu property-owners shows that there is power in property owners banding together, and in taking things slowly.

Osborne heads the Te Atatu Peninsula Owners Group, which was formed to make sure owners had as much information as possible. That's because, while the acquirer knows who is getting what offers of compensation for their land, property owners can only find out by networking.

It is an effective way for communities to also insure that its most trusting and vulnerable members do not accept low offers.

But Osborne says first offers, even when backed with a registered valuation, should be taken as nothing more than a starting point for the free negotiation the Public Works Act envisages, even if backed up by a "registered valuation", he said.

Osborne cites the examples of two property owners who had been offered $12,000 in July for their land, who have now had their offers upped to $20,000.

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The new offer, which a new starting point in negotiations, is again backed by a registered valuation by the same valuer.

"That's a 66 per cent increase in the value of the land in just six months," Osborne says, citing it as evidence that nobody should accept the valuations prepared for acquirers.

A complaint about the valuer has been made to the Valuers Registration Board, but Osborne said a second lesson he sees in the case was that property owners should not move too quickly.

Under the Public Works Act an acquirer may pay for people to get their own valuations to establish their starting place for negotiations. However, Osborne says that if the acquisition process is a long one, in a rising market such as Auckland, there is value to property-owners in waiting until as late as possible in the process to seek a valuation and strike a deal. "They can't do any harm by waiting," he said.

That is particularly true where the acquirer has signalled the length of the negotiation period that will apply before it moves to compulsory acquisition.

Again, Auckland Transport is not happy. It has asked Osborne to "desist from advising property owners not to reach agreement".

The 66 per cent rise in the compensation offer is valuable knowledge for all 109 property owners affected in Te Atatu, but Osborne warned people starting groups like his to expect "free-riders" who gain the benefit but don't join the group.

Many, particularly if they come from countries where authority can be powerful, are wary about joining a group, even when there is no cost to do so.

People should accept the offer of reasonable legal funding by the acquirer, where available, Osborne says, but ultimately, people have to have strategies to get the best deal they can.

This may involve restricting, or delaying access to your property, but it also means sticking to your guns. Each property is unique. Just because a neighbour is paid a certain dollar amount per square foot does not mean your land is worth the same. Land at the front of a house needed to turn cars around, or for parking, is worth more, for example, than land at the back of a property.

COMPULSORY ACQUISITION

Is governed by Section 18 of the Public Works Act. Before forced acquisition, the local authority must serve notice of its desire to acquire the land on every person having a registered interest in the land and lodge a notice of desire to acquire the land with the District Land Registrar who shall register it, without fee, against the certificate of title affected.

The owner will then be invited to sell the land, and, following a valuation carried out by a registered valuer, advise the owner of the compensation they'd get.

The local authority may pay reasonable costs for a person to get their own valuation and legal advice. The onus at this stage is for the local authority to make every endeavour to negotiate in good faith with the owner in an attempt to reach an agreement for the acquisition of the land. If an agreement is made in principle, but the price is the sticking point, the Land Valuation Tribunal may be used to decide the compensation.

But, if, after a period of three months, no progress has been made, then the local authority may simply take the land.

An objection to this can be heard by the Environment Court, but not over the amount of compensation the owner will be paid. The Land Valuation Tribunal can at this point be used to determine a fair outcome. Its cases are searchable online, so people can get insights into how the process will work.

- Sunday Star Times

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