Compulsory Purchase and Compensation Flashcards
Principle of Equivalence?
determined in Horn v Sunderland Corp (1941) - the right for money payment not less but no greater than loss imposed
Ways to acquire once CPO confirmed?
- Notice to Treat - under S.5 CPA (1965) - formal invitation to offer and negotiate value - AA can cancel if no longer need
- GVD - automatically acquire title - AA cannot change their mind
6 Rules for Compensation? Act and Section?
LCA (1961) S5 -
- no allowance for the fact the acquisition is compulsory
- values to market value in no scheme world
- special suitability of land not considered
- illegal use ignored
- where no demand can use ERC - equivalence principle
- Rule 2 not applied to disturbance - also s.5
What is Severance and Injurious Affection?
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
When can a claim be made where no land is taken?
S.10 CPA 1965 - Mcarthy Rules - injurious affection
Part 1 LCA 1973 - 7 physical factors - injurious affection
What is Disturbance?
Cost incurred as a direct result of the land being compulsorily purchased.
What are the 3 rules for disturbance?
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
What is Betterment?
the enhancement in value of the claimant’s retained land as a result of the CPO.
What are the 3 rules for Betterment?
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
What are the 7 physical factors?
Noise
Vibration
Smell
Smoke
Fumes
Artificial lighting
Discharge of substance
When can a Part 1 claim be made?
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.
Qualifying interests for a Part 1 claim?
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
What will be included within a Heads of Claim?
- Value of land taken
- Disturbance payments
- Loss payments
- Severance and injurious affection
What additional payments can be claimed?
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
What do you understand as Statutory Blight?
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.
Where does RICS provide guidance for CPO valuations?
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
When dealing with the properties in Newport Pagnell, what was the valuation date you adopted and what are the 7 physical factors you considered?
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.
Tell me what you did with the properties in Newport Pagnell
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.
For a land cost estimate is there any other land take types that needs to be valued?
As well as temporary and permanent land takes I also considered land that may be blighted.
How are the claimant’s surveyor’s fees calculated for Part 1 Claims and CPO compensation?
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
Can you tell me what you did in the Land Cost Estimate.
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.
Case on no scheme world
Myers v Milton Keynes Dev Corp (1974)
Pointe Gourde
Pointe Gourde Principle
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
What does Cowper v Acton Local Board (1889) relate to?
tests for S+IA - must be held with and value dependant - land split by railway line
