Compulsory purchase and compensation - lvl 3

Question 1

Talk me through your reasoned advice in relation to the validity and level of a claim for compensation.

Answer 1

I was instructed to carry out a valuation and negotiate on behalf of the owner occupier at 103 Lensbury Way.

Further to calculating the MV of the residential accommodation I advised on the additional disturbance and home loss compensation which my client was to claim.

Question 2

How have you used a variety of valuation methodologies appropriate for the circumstances of the claim?

Answer 2

For the land on the south east of London Road, Ashford I carried out a residual valuation, which I cross checked with the comparable method to produce a figure for market value.

This was in accordance with the RICS PS Valuation of Development Property eff. 2020.

Question 3

How have you taken an active role in the negotiation of claims, using a variety of bases of statutory and other valuation methodologies?

Answer 3

For the land on the south east of London Road, Ashford I carried out a valuation using the residual method. I cross checked this with the comparable method to produce a figure for market value.

I valued the land where there was development potential. This was according to the Horn Principle, Horn v Sunderland Corporation 1941.

I reported on development value in accordance with the RICS PS Valuation of Development Property eff. 2020.

Question 4

How have you supplied and justified evidence for a statement of claim using both valuation and logical techniques to back up the quantum of the claim?

Answer 4

For 103 Lensbury Way I was instructed on negotiation. I valued the residential accommodation and found the market value. I claimed for the market value of the land in addition to disturbance and home loss payment.

Question 5

Talk to me through the fee basis for chartered surveyors dealing with CPOs.

Answer 5

A fixed fee for the valuation (£1,000) and an hourly rate for the negotiations (£250 per hour).

Question 6

London Road, Ashford - what was the market value of the land?

Answer 6

I advised the MV of the land was at £4,000,000.

Question 7

London Road, Ashford - where did you find your comparable evidence?

Answer 7

I compiled, verified and analysed comparables I found online for new build residential accommodation. I analysed to find the relevant price per sq ft GIA to apply to the subject property to determine the GDV.

Question 8

London Road, Ashford - what is the compensation code?

Answer 8

The compensation code is applied when there is a compulsory purchase of land. It refers to the amount of compensation payable to owner for the acquisition of their land. It is based on various Acts of Parliament and Caselaw.

Question 9

London Road, Ashford - did the matter complete and did the oil pipeline get installed?

Answer 9

When I was instructed on the valuation of the land with development potential the client had granted the acquiring authority access to their site to carry out investigations and surveys. It has subsequently been granted access to the site and is preparing the site for the pipe installation.

Question 10

London Road, Ashford - was your client compensated?

Answer 10

I had carried out the valuation of the land with development potential and handed the report to my client for preparation for negotiation.

Question 11

London Road, Ashford - how would your advice differ if the land was not able to be developed?

Answer 11

I would had carried out a valuation using the comparable method of valuation for and analysed evidence for farmland. I would had considered disturbance, basic loss and occupier’s payment compensation.

Question 12

103 Lensbury Way - what were the grounds of the CPO?

Answer 12

The proposal was part of a scheme for South Thamesmead. The proposals were to make South Thamesmead a better place to live, work and visit. The proposal was to demolish six towers and surrounding homes and replace them with hundreds of quality, well designed and safe modern homes.

Question 13

103 Lensbury Way - was the client an owner occupier.

Answer 13

Yes my client was an owner occupier.

Question 14

103 Lensbury Way - tell me about home loss payment compensation.

Answer 14

Home loss compensation is part of the compensation code. This relates to the Home Loss Payments Regulations 2023. It is at 10% of the market value of the residential accommodation, and the amount payable is a minimum of £8,100 and a maximum of £81,000.

Question 15

103 Lensbury Way - did the surveyor acting on behalf of the housing association push back on your compensation?

Answer 15

The surveyor pushed back on my valuation during negotiations. They used a sliding scale to justify their opinion of market value supported by evidence including settled claims on similar property.

Question 16

103 Lensbury Way - what are the consequences of delaying the compensation past 3 months?

Answer 16

My client could would had been displaced and the title of their land would had vested in the AA (or legal interest would had passed to the AA). There could be further delays and my client would had ended up displaced for a longer time period.

Question 17

103 Lensbury Way - did you advise your client on their legal standing if compensation was delayed?

Answer 17

I advised that my client could challenge the decision of the local authority by judicial review.

The tenant could be liable to receive penalty interest payments. This is in accordance with the Housing and Planning Act 2016 (HPA).