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 - acquiring authority can cancel if no longer needed. Compensation must be agreed in advance.
GVD - automatically acquire title - AA cannot change their mind. Allows the taking of the title without prior negotiation and within 28 days without prior negotiation of compensation.
Valuation date is the vesting date.
What are the 6 Rules for Compensation? Act and Section?
Land Compensation Act 1961 Section 5.
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 - McCarthy 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?
Harvey v Crawley or Feung Shing Ironwork
Causal connection between acquisition and loss.
Must not be too remote.
Claimant must behave reasonable.
What are the 7 statutory physical factors for a part 1 claim?
1) Artificial Light
2) Discharge of Substance
3) Fumes
4) Noise
5) Smoke
6) Smell
7) Vibration
When can a Part 1 claim be made?
When no land is taken.
To assess the diminution of value as a result of the worsening of one or more of the seven physical factors following the use of the completed public scheme.
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?
Town County and Planning Act (1990) - a diminution of value to the land as a result of the threat of a CPO. Online Properties
Claimant can serve notice if made reasonable endeavours to sell.
Must have six months ownership.
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
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
Case on no scheme world?
Pointe Gourde
Pointe Gourde
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 Severance and Injurious Affection - must be held with and value dependant - land split by railway line
Would you consider hope value for CPO?
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. s.14 of LCA Act 1961. Spirose v TFL.
Part 1 claims is based on Expected Use Value only.
What is the purpose of CPO?
Stat power for public body to acquire land and building for infrastructure projects. Ensures fair compensation.
What case law determined basis of value determined for Disturbance?
Lee v minister of Transport (1964).
Requirements for Severance and Injurious Affection?
Must be held with each other.
Not touching but has an impact on each others value.
What are the Critchel Down rules?
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.
Given back at market value.
What is the key difference between Blight notice and discretionary purchase?
Blight notice claimant will receive whole heads of claim whereas discretionary purchase only market value of land or property.
What is a discretionary purchase?
Highways Act 1980
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
Where can you find details of the no scheme world?
S.6A LCA 1961
originally pointe gourde principle
What sort of things can be claimed for disturbance?
- Removal costs
- Legal costs for new property including SDLT
- Post redirection
- Personal Time
What is the principle of equivalence?
- Principle of equivalence - compensation is paid to put the claimant in the same financial position as if the order had not happened. As set out in the Horn v Sunderland Corporation (1941)
What are the McCarthy Rules?
Compensation for construction of the public works - S.10 CPA 1965
Injurious affection - must meet the criteria set out in the ‘McCarthy Rules’:
- Works are carried out under stat authority
- Constitute physical interference with the rights of the owner over and above the rights enjoyed by the public at large
- Interference is of a nature and extent which, were the works not authorised by statute, would enable the owners to seek a common law remedy for damages
Damage must arise from execution of works.
What dates are involved with Part 1 claim dates?
Valuation date - One year and a day after the relevant date - First claim date.
Relevant date - Date open to the public. Condition of the property taken at the relevant date.
Tell me about the Thisk v Suffolk Council case?
Thisk v Suffolk Council which set out that compensation should be judged on the physical factors being there or not.
Is there any case law pertaining to Artificial Lighting?
Yes - Blower v Suffolk Council 1994
How do we value properties for Part 1 claims?
Switched on / Switched off value with the scheme there/not there.
Tell me about the Part 1 claim in Bean and Ebbsfleet?
Problem:
Compensation claims were made under Part 1 of the Land Compensation Act 1973 related to improvements at the Bean and Ebbsfleet A2 Junctions. Claimants reported a worsening of statutory physical factors, particularly fumes, noise, and artificial lighting, following the road scheme. However, National Highways’ Environmental Statement did not support their concerns regarding fumes and noise.
Action:
I inspected the claim properties alongside a senior colleague, interviewed claimants to understand their concerns, and reviewed supporting evidence, including photographic proof of artificial lighting. The claimants all also claimed that fumes and noise had worsened. Through the inspection, I confirmed that mature trees had been removed, leading to increased visibility of artificial lighting.
Result:
I determined that artificial lighting had worsened at two properties, warranting compensation. For the other claims, I concluded that no statutory physical factors had worsened and advised a Registered Valuer that compensation was not payable. I had regard to Thisk v Suffolk Council which set out that compensation should be judged on the physical factors being there or not, rather than valuing to a minute percental point.
Outcome:
Compensation was granted and agreed with two properties that were adversely affected by increased artificial lighting, ensuring a fair assessment.
The other claims were rejected as Environmental statements rejected that there was an increase in noise or fumes.
Tell me about the Part 1 claim for the M20?
Problem:
Compensation claims were submitted under Part 1 of the Land Compensation Act for the M20 J3-5 Smart Motorway scheme. A senior surveyor had previously negotiated and established the compensation zone, and it was agreed that compensation would only be payable for the worsening of artificial lighting, based on the Environmental Statement and comparable sales evidence.
Action:
I inspected the claim properties to confirm their location within the compensation zone. During the inspection, I observed the new position of lighting on the central reservation and discussed its impact with the claimants. Following this, I returned to the office to evaluate the appropriate level of compensation.
Result:
Using case law and precedent from other settled Part 1 claims on the same road scheme, I assessed the compensation amounts to be offered.
Outcome:
The compensation process was conducted fairly and consistently, ensuring claimants received appropriate payments while maintaining adherence to legal and negotiated precedents.
What is a Development Consent Order?
Set out in the Planning Act 2008. Allowed the fast tracking of planning permission / CPO’s for nationally significant infrastructure project.
