Reconnecting River Country: easements, deeds and compensation

The Reconnecting River Country Program proposes to secure a flow corridor along parts of the Murrumbidgee so environmental water can connect the river with wetlands and floodplains more often. A property’s appearance on an inundation map is only the starting point. The legal position depends on the instrument proposed, what it would permit, how the affected interest is valued and which obligations will continue after the property changes hands.

Those questions cannot be answered from program mapping alone. The property-specific mapping, the proposed instrument and the valuation assumptions must be read together.

The program continues outside the Basin Plan adjustment mechanism

On 7 July 2026, the program reported that its three constraints projects, including the Murrumbidgee Project, had been withdrawn from the Sustainable Diversion Limit Adjustment Mechanism (SDLAM). SDLAM is a Basin Plan mechanism whose measures are to be delivered by 31 December 2026, and the projects were not expected to be fully delivered by then. The program said the withdrawal does not alter its current funding agreement with the Australian Government, under which negotiations with Murrumbidgee landholders continue. The department’s SDLAM page, updated on 28 September 2026, adds that the NSW Government remains committed to delivering the projects in full, provided timely funding is made available.

The Murrumbidgee Project continues its Phase 1 negotiations for properties between Darlington Point and Balranald. Its recommended upper environmental flow limit is 40,000 megalitres (ML) a day at Wagga Wagga. A further 5,000 ML a day is used as a risk buffer to define the proposed corridor and inform compensation; it is not a delivery target.

The published program position is that:

• no higher environmental flows will occur before December 2026;
• flows above current water-sharing-plan limits cannot begin until the Minister declares that all Landholder Negotiation Scheme negotiations are complete, which the program says will not occur until after 2031; and
• negotiations with landholders outside the Phase 1 area are expected to begin after December 2026, and Phase 2 work from 2027 to 2031 is subject to further Australian Government funding and continuation of the Basin Plan.

Those dates and program settings may change. The instrument proposed for an individual property, and the current official program material, should be checked before a decision is made.

The instrument, not its label, determines the legal effect

Three pathways appear in the program material: a registered flow easement (the program’s fact sheets call it an inundation easement), a deed of release and, as a stated last resort, compulsory acquisition. They are not the only possible outcomes.

The Water Administration Ministerial Corporation (the Ministerial Corporation) negotiates under the Landholder Negotiation Scheme in Schedule 9 to the Water Management (General) Regulation 2025, and must do so consistently with the scheme’s statutory Negotiation Guidelines (sections 7(1) and 8). Since 4 September 2026, those guidelines have been the version published on the department’s website on 24 August 2026 (section 8(3)). That version of the Negotiation Guidelines contemplates other forms of agreement as well, including covenants, for example over mitigation works.

Flow easement

A flow easement is intended to be a registered interest over land. It does not transfer ownership, but its terms can bind later owners. Existing NSW law permits an easement without a dominant tenement (an easement “in gross”, not attached to neighbouring land) to be created in favour of a prescribed authority under section 88A of the Conveyancing Act 1919, including through the registration of a plan under section 88B. A prescribed authority includes the Crown and a public authority constituted by an Act. The program’s inundation easements fact sheet says the Ministerial Corporation acquires the easements and WaterNSW, as river operator, also benefits from them.

The same fact sheet describes a “whole-of-lot” easement: because inundation from environmental flows varies, the program says a fixed easement boundary cannot practicably be drawn. The easement applies to the whole lot, and the inundation it permits is limited by its terms, the Murrumbidgee Declaration Order, the purpose of the releases and the availability of environmental water. The program says the terms are standard across the project, include a release from liability that may arise from inundation, and may be requested during negotiations. The inundation map a landholder receives is important evidence, but it is not a substitute for those operative documents. If registration is not completed when the agreement is signed, the Negotiation Guidelines allow the Ministerial Corporation to lodge a caveat on the title in the meantime.

Deed of release

The program’s deed of release fact sheet says a deed of release may be offered, rather than an easement, where releases above the current operating limit are expected to inundate temporarily less than 40 hectares and less than 20 per cent of the total landholding, to restrict access temporarily to an area of less than 20 hectares, and to affect no major asset on the property. A deed of release is a contract with the current landholder, not a registered interest: the program says it is not registered on the property title. In return for a one-off payment, which the program says is calculated in accordance with the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (the Just Terms Act), the landholder acknowledges that the environmental water releases specified in the Murrumbidgee Declaration Order may inundate the land and releases the Ministerial Corporation and WaterNSW from liability for losses or claims arising from that inundation.

Its effect still depends on its terms: the conduct and claims released, the releases and flow levels covered, the consideration, whether and how successors and other interest holders are bound, and any continuing notification or access obligations. Because it is not registered, a purchaser will not find it on the title. The Negotiation Guidelines allow an agreement to require the landholder to give certain information to lessees, licensees, others with an interest in the land and prospective purchasers or lessees. The vendor’s disclosure position and any warranty or notice obligation in the deed should be examined before signing.

A landholder should not assume that a deed is narrower or less significant than an easement without reading the proposed release and the property-specific mapping together. A landholder who considers the program’s assessment of impact is wrong can raise it with the program. The program says that accepting the invitation to negotiate is the first step in considering a reassessment, which may change the type of agreement offered.

Compulsory acquisition

The Phase 1 negotiation page describes compulsory acquisition as a last resort if no voluntary agreement is reached, requiring approval from the NSW Minister for Water. It also says no compulsory acquisition will be pursued before December 2026.

If that pathway were used, it would follow the Just Terms Act: the Ministerial Corporation may acquire land “by agreement, or by compulsory process in accordance with” that Act (section 375(1) of the Water Management Act 2000). An invitation to negotiate is not a notice of intention to acquire, though it must say in what circumstances the Minister may consider compulsory acquisition (Schedule 9, section 4(2)(b) and (3)).

Before any compulsory acquisition, the Just Terms Act generally requires a genuine attempt to acquire by agreement for at least six months (section 10A) and a proposed acquisition notice given at least 90 days ahead (sections 11 and 13). The six-month requirement has exceptions, such as where the owner says it is not prepared to negotiate, and it gives rise to no civil cause of action (section 10A(6)–(7)). The 90-day notice period can also be shortened if the authority and the owners agree in writing, or if the responsible Minister approves a shorter period because urgency or other circumstances make a longer one impracticable (section 13(2)–(3)).

If an interest is compulsorily acquired, compensation follows the Just Terms Act. Section 37 gives an owner whose interest is divested, extinguished or diminished by an acquisition notice a right to compensation under Part 3. Section 55 lists the matters to be considered in determining the amount, and section 59 defines loss attributable to disturbance, which includes legal costs and valuation fees reasonably incurred in connection with the acquisition. The evidence each of those matters requires is covered in our practical framework for just terms compensation.

An agreed acquisition of land not available for public sale follows a different rule. Section 38 requires the authority to “take into account” the same Part 3 matters as it would in fixing compensation for a compulsory acquisition. It does not turn each of those matters into a separate payment entitlement. Our article on acquisition by agreement under the Just Terms Act examines what the contract or deed should then address.

The agreement should state the price, professional costs and releases. The authority’s document should also identify whether the transaction is a voluntary grant, an acquisition by agreement or a compulsory acquisition.

The scheme sets a 28-day acceptance period and an adjustable 12-month negotiation period

The Murrumbidgee Phase 1 process operates under the Landholder Negotiation Scheme in Schedule 9 to the Water Management (General) Regulation 2025.

The program first issues an invitation to negotiate. Written acceptance starts the formal negotiation period, during which the program obtains an independent valuation and makes an offer. A landholder may retain separate legal and valuation advisers. Facilitation and mediation are available; compulsory acquisition remains the stated last-resort pathway if no agreement is reached.

Schedule 9, section 5 fixes the acceptance period and its adjustment:

“A person accepts an invitation to negotiate by notifying the Ministerial Corporation—

(a) within 28 days after the invitation is given to the person, or

(b) within a longer period agreed to by the Ministerial Corporation.”

Schedule 9, section 6(1)–(2) provides:

“(1) The Ministerial Corporation must negotiate with a person who accepts the invitation to negotiate for 12 months.

(2) Despite subsection (1), the Ministerial Corporation may—

(a) agree with the person to a shorter or longer period of negotiation, or

(b) end negotiations at any time, if satisfied—

(i) the negotiation has been successful and agreement has been reached, or

(ii) the negotiation is unlikely to succeed or is unproductive.”

Negotiations generally do not end without notice. When a negotiation period ends, the Ministerial Corporation must tell the landholder in writing. Unless agreement was reached, it must first give written notice of the proposed end date and 28 days for submissions, and consider any it receives, although it is not bound to accept them (section 6(3)–(5)). Those steps do not apply where the Minister, by order in the Gazette, declares the end of all negotiations under a declaration (section 6(6)).

An invitation is therefore the start of a structured process, not a requirement to accept the first offer. Record the date it was received and obtain the property mapping, proposed instrument and valuation material early.

The easement terms and mapping must be tested together

The legal effect will turn on the terms, read with the mapping and the Murrumbidgee Declaration Order. A careful review should address:

• the land the easement burdens (on the program’s approach, the whole lot) and how the terms limit the inundation it permits: the authorised flow level, the buffer and the measurement point, tested against the hydraulic mapping and observed conditions;
• the anticipated frequency, timing and duration of inundation, without converting modelled averages into guarantees;
• notice before a managed release, the treatment of urgent or changed conditions, and any operator or contractor access. Schedule 9, section 9 requires WaterNSW to take reasonable steps to notify affected landholders before a declared release. The program’s flow-corridor brochure says the proposed easement does not itself authorise public or government access and that any required access would need a separate agreement;
• the treatment of crops, fences, pumps, roads, buildings, livestock movements, farm access and other improvements;
• mitigation, maintenance, clean-up, reinstatement, responsibility for later damage and access to monitoring data;
• the consideration, any adjustment mechanism, and the effect on finance, insurance, leasing and a later sale; and
• how the interest binds other interest holders, may be assigned or varied, and can be released or enforced.

Existing leases, licences, mortgages and other easements should also be checked. A landholder may not be the only person with a compensable or consenting interest.

Valuation must follow the legal interest being granted or acquired

The program says its independent valuer will consider market value, the extent of inundation and impacts on the property and its assets. A property-specific assessment may also require evidence of:

• the value of the interest granted or acquired and any effect on the retained land;
• changes to agricultural production, access, management and operating risk;
• impacts on improvements and infrastructure, including the cost and effectiveness of mitigation;
• business disturbance and additional recurring costs; and
• the effect of the proposed terms on finance, insurance, leasing and a later sale.

The measure and legal basis differ between a negotiated easement, a deed and a compulsory acquisition. A program offer should therefore identify the interest being valued, the valuation date, assumptions about flow behaviour, the heads of loss included and whether the payment is intended to settle future claims.

Adviser costs should be agreed before they are incurred

The program’s negotiation assistance fact sheet says that, once a landholder accepts the invitation to negotiate, the program will cover reasonable costs directly related to participation, regardless of whether agreement is reached. It identifies independent legal advice and property valuation as covered services. Valid invoices and copies of valuation and specialist reports must be provided. Specialist consulting services require prior written approval, and costs incurred before acceptance of the invitation are not reimbursed.

The Negotiation Guidelines leave reimbursement where no agreement is reached to each program, subject to ministerial approval, and require the invitation to negotiate to say in writing whether it will occur. The program’s material indicates that costs are recovered at the end of negotiations, so a landholder may need to meet fees in the meantime.

Confirm the scope and payment process before incurring substantial fees. Hydrology, surveying, agronomy, accounting and other expert work falls within the specialist category and should not be commissioned on an assumption that it will be reimbursed.

That published administrative reimbursement arrangement is distinct from the statutory pathways. In an agreed acquisition of land not available for public sale, section 38 requires the authority to take the Part 3 matters into account and the agreement should state which costs will be paid. If an interest is later acquired compulsorily, section 37 and section 59 apply according to their terms.

The 2026 amending Act is only partly in force

The Water Management Amendment (Easements for Inundation) Act 2026 was assented to on 18 May 2026. Section 2 provides:

“This Act commences as follows—

(a) for Schedule 1—on a day or days to be appointed by proclamation,

(b) otherwise—on the date of assent to this Act.”

Schedule 2, which amended the Water NSW Act 2014, therefore commenced on 18 May 2026, the day of assent. Schedule 1 needs a proclamation. It would insert section 399C into the Water Management Act 2000, allowing an easement in gross for inundation for an environmental purpose to be created in favour of a “river operator”: WaterNSW, or a water authority prescribed by the regulations. It would also let the Ministerial Corporation transfer inundation easements it holds to WaterNSW by order published in the Gazette. No compensation would be payable to a person in connection with a transfer order, except to the extent the order provides, and the transfer would not be treated as breaching a contractual restriction on assignment.

As at 30 September 2026, Schedule 1 had not commenced. The current version of the Water Management Act 2000, in force from 1 July 2026, records that it does not include the amendments made by the 2026 Act, which are marked “not commenced”, and it does not contain section 399C. Until Schedule 1 commences, the proposed section and the transfer provisions have no effect. Check the commencement position on the NSW legislation website before relying on them. For a landholder granting an easement now, the practical point is that, if they commence, the body holding the easement could change without the landholder’s agreement.

Schedule 2 inserted section 37(4) into the Water NSW Act 2014:

“No compensation is payable under this section for damage resulting from the inundation of land as a consequence of anything done, or omitted to be done, by Water NSW.”

Schedule 2 also expanded WaterNSW’s functions. Since 18 May 2026 they have expressly included releasing or supplying water, and operating works, to inundate land for an environmental purpose, and inundating land in the exercise of any function (section 7(1)(l)–(n)). That matters for section 398 of the Water Management Act 2000 (below), whose protection depends on something being done in good faith in the exercise of a function under that Act or the Water NSW Act 2014. After Schedule 2, a landholder can no longer readily argue that inundation from a release was outside WaterNSW’s functions.

Those functions still have limits: they may be exercised only under the authority of, and in accordance with, an operating licence, and are subject to any applicable requirements of the Water Management Act 2000 or the Water Act 1912 (section 7(3)). A transitional clause treats the operating licence in force immediately before 18 May 2026 as authorising the new functions until it expires (Schedule 2, Part 4). The department’s questions and answers on the amending Bill say that licence is due to expire in 2028, and state the department’s intent: compensation for routine releases should not be payable under section 37, and civil claims should lie only where the function is not performed in good faith.

The section 37(4) exclusion contains two causal steps: the damage must result from inundation of land, and the inundation must be a consequence of something done or omitted by Water NSW. “Inundate” is broadly defined: it includes inundating private land and moving water to or across land, including private land (section 3(1)). The words “under this section” confine the exclusion to the compensation pathway in section 37. Section 37(4) does not, by itself:

• determine the consideration payable for a voluntarily granted easement or deed;
• remove compensation available under the Just Terms Act for an acquisition; or
• decide rights created by the terms of a particular instrument.

Those questions require the correct pathway and document to be identified first.

The existing liability exclusions remain confined by their terms

Section 398(1) of the Water Management Act 2000 also needs close attention. It provides that neither the Crown nor any other person is subject to any action, liability, claim or demand arising “from the release of water for environmental purposes”, among other things. The protection applies where that is a consequence of something done or omitted in good faith by the Minister, a prescribed authority or a person acting on behalf of either, in the exercise of functions under the Water Management Act 2000 or the Water NSW Act 2014. Since 18 May 2026, WaterNSW’s functions under the Water NSW Act 2014 have expressly included releases that inundate land.

The definition in section 398(3) expressly includes Water NSW as a prescribed authority. The exclusion is not an unqualified statement that every inundation consequence attracts no liability: its operation depends on the identified actor, the exercise of functions under one of the specified Acts, the causal link it requires and good faith. Section 398(2) separately addresses good-faith use of, and releases from, water management works.

Section 398 does not itself fix the consideration for a negotiated easement or deed, construe a contractual promise, or determine compensation under the Just Terms Act. Those questions remain dependent on the instrument and statutory pathway engaged.

The final file should show the bargain actually made

Keep the invitation and proof of receipt; current title material; every version of the mapping and instrument; hydraulic and historic-inundation material; the farm, business and infrastructure records supporting the valuation; and correspondence recording offers, cost approvals and agreed actions.

Before signing, compare the final mapping and instrument against the version valued. A small drafting or mapping change can alter both the practical burden and the compensation analysis.

The landholder should be able to identify, from the final documents, the land burdened, the flow authorised, the consideration paid, the claims released and the obligations that will survive a sale. If those matters cannot be answered from the instrument and mapping together, the transaction is not ready to conclude.

For the wider issues that arise when a public project affects farming land, see rural and agricultural land.