Am I entitled to compensation if a tunnel runs under my property?

Compulsory Acquisition: 20 July 2022

A question we frequently receive from landowners potentially affected by the current tunnel plans for the Suburban Rail Loop - East Project (the SRL Project) is whether they will be entitled to compensation for any loss of the market value to their property suffered as a result of the potential tunnel running underneath their property for the SRL Project.

Any underground land the Authority requires for the SRL Project and the rail tunnel is known as a stratum land acquisition.

On 1 July 2022, the Victorian Government released a revised version of the Suburban Rail Loop Act 2009 (the Act) which makes changes to the Major Transport Projects Facilitation Act 2009 for the purposes of the SRL Project.

Along with other amendments, the Act replaces section 163 and 164 of the Major Transport Projects Facilitation Act 2009, which entitles any affected person to claim compensation for the loss of market value to their property if an Order for the acquisition of stratum land is published in the Victoria Government Gazette. The entitlement to claim compensation is subject to conditions relating to the depth of the landowner's certificate of title.

A landowner is entitled to receive compensation for a stratum land acquisition if there is no depth limitation to their property's certificate of title.

Pursuant to section 339(3) of the Land Act 1958, if land was subject of a Crown Grant before 29 December 1891, there is no depth limitation and a certificate of title is essentially for the land to the 'centre of the earth'.

Alternatively, if the land was not subject of a Crown Grant, then a property's certificate of title will effectively have a depth limitation of 15 metres and a landowner would not be entitled to receive any compensation for a stratum land acquisition below 15 metres. We note that the SRL Project earmark stratum land's current plans are approximately 20 metres underground.

Various searches are required to be undertaken to determine whether your certificate of title has a depth limitation.

If it is found that there is no depth limitation to a property's certificate of title, the loss of market value as a result of a stratum land acquisition will be determined by an expert valuer who will value your land on a 'before' and 'after' scenario, i.e. before the Order is published and after the Order is published.

This is a valuation method regularly used in compulsory acquisition matters and essentially means that a valuer will value the land prior to the stratum land acquisition and value the land after the stratum land acquisition, with the difference between the two valuations being the compensation payable.

For example, a valuer may determine the land was valued at $1,000,000 prior to the stratum acquisition and is now valued at $800,000 as a result of the stratum acquisition. Therefore, a claim for compensation for the market value of the property would be $200,000.

If you would like to discuss your individual circumstances or find out whether you would be entitled to market value compensation if any stratum land of your property is acquired, please contact Natalie O'Flynn on 03 8600 6046 or noflynn@aitken.com.au to arrange a suitable time to discuss. We are happy to discuss via telephone or, alternatively, meet with you at a location convenient to you on a free, no-obligation basis.

Additionally, Aitken Partners is able to assist you in obtaining the required searches to determine whether there is a depth limitation to your certificate of title. Please contact Natalie O'Flynn, who will be able to assist in this regard.

About our Compulsory Acquisition Team

Aitken Partners Compulsory Acquisition Team has more than two decades of combined experience in representing landowners, tenants and business owners in compulsory acquisition claims in most (if not all) of Victoria's major infrastructure projects.

If you are impacted (or believe you may be impacted) by the Suburban Rail Loop, it is imperative you engage lawyers experienced in compulsory acquisition and voluntary negotiation matters to assist you in obtaining advice on appropriate compensation.