Compulsory Purchase and Compensation

Question 1

Principle of Equivalence?

Answer 1

determined in Horn v Sunderland Corp (1941) - the right for money payment not less but no greater than loss imposed

Question 2

Ways to acquire once CPO confirmed?

Answer 2

1. Notice to Treat - under S.5 CPA (1965) - formal invitation to offer and negotiate value - AA can cancel if no longer need
2. GVD - automatically acquire title - AA cannot change their mind

Question 3

6 Rules for Compensation? Act and Section?

Answer 3

LCA (1961) S5 -

1. no allowance for the fact the acquisition is compulsory
2. values to market value in no scheme world
3. special suitability of land not considered
4. illegal use ignored
5. where no demand can use ERC - equivalence principle
6. Rule 2 not applied to disturbance - also s.5

Question 4

What is Severance and Injurious Affection?

Answer 4

Set out in s.7 of CPA 1965 - damage caused by separation of land into 2 or more parcels and injurious affection is the diminution of value of retained land

Question 5

When can a claim be made where no land is taken?

Answer 5

S.10 CPA 1965 - Mcarthy Rules - injurious affection

Part 1 LCA 1973 - 7 physical factors - injurious affection

Question 6

What is Disturbance?

Answer 6

Cost incurred as a direct result of the land being compulsorily purchased.

Question 7

What are the 3 rules for disturbance?

Answer 7

Determined in Director of Buildings and land v Shun Fung Ironworks (1995)

• causal connection between acquisition and loss
• must not be too remote
• claimant must behave reasonable

Question 8

What is Betterment?

Answer 8

the enhancement in value of the claimant’s retained land as a result of the CPO.

Question 9

What are the 3 rules for Betterment?

Answer 9

Highways act (1980)

• Land taken and other lands must be in same ownership
• Land taken and other lands must be contiguous or adjacent
• Interest in other lands must have been held on the date of Notice to Treat

Question 10

What are the 7 physical factors?

Answer 10

Noise
Vibration
Smell
Smoke
Fumes
Artificial lighting
Discharge of substance

Question 11

When can a Part 1 claim be made?

Answer 11

When no land is taken

To assess the diminution of value as a result of 1 of more of the seven physical factors following the use of the completed scheme. Valuation date is the first claim day - 1 year after scheme opens - can claim up to 6 years after first claim day. To value using the switched on / switched off approach.

Question 12

Qualifying interests for a Part 1 claim?

Answer 12

Residential freehold if held before scheme opened
AST of no less than 3 years
Commercial if RV less than £36,000 and £44,300 London

Question 13

What will be included within a Heads of Claim?

Answer 13

• Value of land taken
• Disturbance payments
• Loss payments
• Severance and injurious affection

Question 14

What additional payments can be claimed?

Answer 14

Home loss payments – Land Compensation Act 1973
* 10% - reviewed annually. Minimum of £8,100 and maximum of £81,000
* Qualifying interest – owner occupier
Basic loss payment – Planning and Compulsory Purchase Act 2004
* Basic loss – 7.5% up to £75,000
* Qualifying interest – freehold or interest as tenant for longer than one year prior to displacement
Occupier’s loss payment – Planning and Compulsory Purchase Act 2004
* Occupier’s loss – 2.5% up to £25,000
* Qualifying interest – freehold or interest as tenant for longer than one year prior to displacement

Question 15

What do you understand as Statutory Blight?

Answer 15

TCPA (1990) - a diminution of value to the land as a result of the threat of a CPO.

Claimant can serve notice if made reasonable endeavours to sell. AA can serve counter notice. 2 months time limitations. If blight accepted must be transferred within 3 years. Must be freehold and Non domestic under RV £36,000.

Question 16

Where does RICS provide guidance for CPO valuations?

Answer 16

RICS Professional Statement: Surveyors Advising in Respect of Compulsory Purchase and Statutory Compensation:
- Must confirm terms of engagement and fees – and be able to demonstrate fees are reasonable
- Must discharge duties to required standards
- Must provide clients with balanced and professional advice on proper understanding of statute and case law

and

UK VPGA 16 – Valuations for Compulsory Purchase and Statutory Compensation:
* PS1 and PS2 are mandatory when undertaking CPO work
* VPS1 – 5 are advisory but best practice
* Advises CPO is very complex area and surveyors must keep up to date with legislation and case law
* Advises to provide preliminary advice regarding assessment of compensation

Question 17

When dealing with the properties in Newport Pagnell, what was the valuation date you adopted and what are the 7 physical factors you considered?

Answer 17

For Part 1 claims the valuation date is the first claim date, 1 year after the scheme opened, I adopted the switched off / switched on approach to value these properties.

The 7 physical factors are NVSSFAD, for this particular group of claims the relevant factors were noise and vibration.

Question 18

Tell me what you did with the properties in Newport Pagnell

Answer 18

I assessed compensation for Part 1 claims in respect to the M1 J15 road scheme.
After inspection of claim properties and enquiries with the claimants, valuations were completed by analysing comparable property transactions at the day the scheme opened and at the first claim date, this would indicate a change in value between the two dates to help to determine if compensation was due.
With support from the environmental report provided by National Highways and analysis of evidence provided by agents, it was determined that a worsening of the 7 physical factors did not cause a diminution of market value following the scheme. Therefore, no compensation was due.

Question 19

For a land cost estimate is there any other land take types that needs to be valued?

Answer 19

As well as temporary and permanent land takes I also considered land that may be blighted.

Question 20

How are the claimant’s surveyor’s fees calculated for Part 1 Claims and CPO compensation?

Answer 20

For Part 1 claims Highways schemes it is for successful claims only in line with Highways Agency Fee table. For blight and CPO it is a fixed hourly rate using time sheet. Rule 6

Question 21

Can you tell me what you did in the Land Cost Estimate.

Answer 21

I identified the land to be acquired and the potential costs involved for the client. This included land acquired, severance and injurious affection, disturbance, and fees. I researched planning consents and allocations for the areas concerned to identify and advise on any risks, and associated costs. I collated the data onto a spreadsheet for ease of management and advised my colleague of the valuations to be included in the report to the client.

Question 22

Case on no scheme world

Answer 22

Myers v Milton Keynes Dev Corp (1974)
Pointe Gourde

Question 23

Pointe Gourde Principle

Answer 23

compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition

no scheme world

Question 24

What does Cowper v Acton Local Board (1889) relate to?

Answer 24

tests for S+IA - must be held with and value dependant - land split by railway line

Question 25

Can you name some case law when assessing part 1 claims?

Answer 25

Barb v Secretary of State for Transport [1978] - switched on / switched off approach

Question 26

What’s your basis of value for Part 1 claims?

Answer 26

The diminution of value as a result of the worsing of one or more of the 7 SPF

Question 27

Would you consider hope value for CPO?

Answer 27

For CPOs and blight notices you can serve a section 17 notice (CAAD) to determine what PP would have been approved if not for the scheme, this can then be considered in the valuation. Part 1 claims is based on EUV only.

Question 28

What is the purpose of CPO?

Answer 28

allows public bodies acting in public interest to acquire land and property to facilitate works, enures fair compensation

Question 29

What case law determined basis of value for Disturbance?

Answer 29

Lee v minister of Transport (1964)

Question 30

Rule 3 case law?

Answer 30

Myers v Milton Keynes Dev
Pointe Guarde

Question 31

Rule 4 case law?

Answer 31

Hughes v Doncaster (1991) - development that may be subject to enforcement action

Question 32

What valuation dates are adopted for CPO?

Answer 32

NTT - date of entry or asst date
GVD - vesting date or asst date
UT - last hearing date

Question 33

Planning assumptions for CPO?

Answer 33

LCA 1961 - S.14 - 18
For valuations post 6 April 2012 the following can be considered
- actual PP in force
- proposals of the AA
- CAAD

Question 34

Requirements for Severance and IA

Answer 34

must be held with each other
not touching but has an impact on each others value

Question 35

Additional payments?

Answer 35

Home loss - residential
Basic loss - non-resi owner
Occupers loss - non-resi occupier
Non resi owner occ - 10% up to £100,000

Question 36

What are the Critchel Down rules?

Answer 36

Where a department wishes to dispose of land to which the Rules apply, former owners will, as a general rule, be given a first opportunity to repurchase the land previously in their ownership, provided that its character has not materially changed since acquisition.

Offered to former freeholder then leaseholder

Question 37

What is the key difference between Blight notice and discretionary purchase?

Answer 37

Blight notice claimant will receive whole heads of claim whereas discretionary purchase only market value of land or property

Question 38

Key case law relating to rules of S+IA?

Answer 38

Cowper v Acton Board - must be held with and have an impact of eachothers value

Question 39

K

What do you understand as material detriment?

Answer 39

Retained land so poorly impacted that cannot be enjoyed and therefore AA must acquire whole land

Question 40

What is a discretionary purchase?

Answer 40

For off-line properties where enjoyment of property is impacted
Conditions:
- unable to sell unless at much lower price
- visual impact
- health reason
- financial reason
- pressing need to sell

Question 41

Where would you find details on mitigation measures?

Answer 41

Part 2 of the Land Compensation Act (1973)

Question 42

Where can you find details of the no scheme world?

Answer 42

s.6A LCA 1961
originally pointe gourde principle