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Article – Advantages and Disadvantages of a quick settlement

Advantages and Disadvantages of a quick settlement

When your land is being compulsorily acquisitioned what are the advantages and disadvantages of a quick settlement?

Article – Adina Thorn

Building new infrastructure is currently a high priority for local and central Government. This includes new, wider and straighter roads, inner city rail links, new transmission lines, transport depots and drains, all of which require land to implement, land that is predominantly privately owned.

So what happens when the Government or Local Body or Public Authority comes along and wants to buy your property using the powers conferred on them by the Public Works Act?

Is it better to stand your ground, or seek a quick settlement? Do you want to lie in front of the bulldozers, tie yourself to the chimney, or bank the compensation settlement as soon as possible?

As with all these things there is no set answer, apart from the common sense one, which is to get some good advice.

One of the main issues people face is of course the deep personal attachment they may have for a property. Perhaps it’s a place where your family has been brought up, one where there are deep historical ties or one where years of work and personal effort have been expended.

The factors supporting a quick settlement approach include:

  • Moving on quickly – an approach that may reduce the personal stress that the whole exercise might involve. Hanging in there may be satisfying for some people, but for many it can just mean uncertainty and worry.
  • Avoiding a situation where you might end up living in a depleted environment, where neighbours and friends have moved on and buildings are falling into disrepair, or have perhaps even disappeared on the back of truck.
  • Benefiting from the fact that good faith negotiations are usually quicker and easier on the parties involved.
  • Gaining control as such an approach also usually provide the vendor with a greater say over the timeframes involved, and perhaps being able to arrange a settlement date to suit. This option can mean avoiding the buyer’s use of a “notice to take” which means the property owner only has three months to vacate.
  • Enjoying a more controlled environment in terms of finding a new property, thanks to knowing when the settlement will be finalised and payment received.

But there can been benefits from taking negotiations to the wire. The obvious one is the possibility that in a rising market the settlement price may be higher, although it’s worth noting that it’s likely that you will also be buying in a rising market, particularly if you are looking to relocate in Auckland or Christchurch.

And where the seller has a strong emotional attachment to a property there is of course the fact that occupation time will likely be extended.

This slower and more deliberate approach also provides a longer time for the owner to become to terms with the enforced change.

Finally, it’s worth noting that longer negotiations can be beneficial for the seller as the acquiring authority can be motivated to complete any standouts from what might be a significant stepping stone for a major project.

But most of all, dealing with an acquiring authority backed by the Public Works Act can be daunting, so legal representation can ensure you gain maximum benefit from the situation, be that be in the form of peace of mind, or securing a satisfactory deal.

 
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