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New Zealand law explained for everyone

Public Works Act 1981

Compensation - Entitlement

68: Compensation for business loss

You could also call this:

“Money for business owners when their land is needed for public projects”

If your land is taken or bought for a public work and you have a business on that land, you can get money to make up for your losses. This is called compensation. You can get this money in two ways:

  1. If you have to move your business because of the public work, you can get money for any losses caused by moving. You and the Minister or local authority will decide when to work out how much money you should get. Usually, this happens after you’ve moved and had some time to see how the move has affected your business.

  2. You can get money for losing the goodwill of your business. Goodwill means the value of your business’s good reputation and customer base. You can get this money if:

    • Your land is valued based on how it’s currently being used
    • You promise not to sell the goodwill or start a similar business elsewhere if the Minister or local authority asks you to

However, you can only get this compensation if:

  • You didn’t want your land to be taken or bought, or
  • You only agreed to your land being taken or bought because you were told it would happen anyway

This law is meant to help you if you lose your business because of a public work. It tries to make sure you don’t lose out financially when you have to move or close your business.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM46374.

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Part 5 Compensation
Entitlement

68Compensation for business loss

  1. The owner of any land taken or acquired under this Act for a public work who has a business located on that land shall be entitled to compensation for—

  2. business loss resulting from the relocation of the business made necessary by the taking or acquisition which loss, unless the owner and the Minister or local authority otherwise agree, shall not be determined until the business has moved and (if the circumstances so require) until sufficient time has elapsed since the relocation of the business to enable the extent of the loss to be quantified; or
    1. loss of the goodwill of any such business, if—
      1. the land is valued on the basis of its existing use; and
        1. the owner gives such assurances and undertakings not to dispose of the goodwill and not to engage in any similar trade or business as may be required by the Minister or local authority.

        2. No person shall be entitled to compensation under this section unless—

        3. he was not a willing party to the taking or acquisition; or
          1. he was a willing party to the taking or acquisition principally because the land had been notified.

            Notes
            • Section 68(1): amended, on , by section 2(7) of the Public Works Amendment Act (No 2) 1987 (1987 No 67).