Bypasses, ring roads, new railway lines, airport extensions, flood defence works and the installation of electricity pylons can all result in a compulsory purchase notice, which can be both worrying and confusing for rural business owners.
Walter’s Rural has considerable experience in helping farmers and rural businesses navigate compulsory purchases and achieve the best possible outcome for themselves.
No two cases are the same. However, when some or all of a client’s land is taken, they may be able to claim compensation under one of the following categories or ‘heads of claim’:
- value of the land taken
- disturbance payments
- loss payments
- severance and injurious affection
The value of the land taken depends on several factors and must be assessed on the ‘valuation date’. The valuation date is the earliest of:
- the date of entry and taking possession if the acquiring authority has served a notice to treat and notice of entry; or
- the vesting date if the acquiring authority has executed a general vesting declaration; or
- the date when compensation is agreed is before either of the above
Market Value
The law says that compensation is based on the market value of the land which is being acquired.
The organisation acquiring the land will usually appoint a chartered surveyor to value the land. However, you can also appoint a surveyor to value the land and negotiate on your behalf.
When calculating the value of the land, several factors are taken into account:
- Its existing use and its development potential
- Does it currently have planning permission, or could it have planning permission granted in the future?
- Could the land unlock the development potential of adjacent land?
- Could the land be combined with one or more land interests to make the area worth more than the sum of the individual values?
Disturbance Payments compensate you for losses caused by the land being taken away from you and are not based on the value of the land. It is down to you to prove the value of the impact of the compulsory purchase, and you have to act reasonably to reduce or eliminate your loss. Professional advice is undoubtedly needed in this area.
Loss Payments are the additional amount paid to eligible claimants to compensate them for the inconvenience and disruption caused by the compulsory purchase. Again, this is a complex area, and your eligibility for home loss payment, basic loss payment or occupier’s loss payment will require professional assistance.
Severance and injurious affection
If you only lose part of your land through the compulsory purchase, this clause will compensate you for any adverse effect on the land you retain. Again, you will need a professional adviser to calculate how much the retained land has fallen in value due to the adjacent land being sold.
The legislation relating to compulsory purchases and the compensation received by the affected landowner is both lengthy and complicated. We’ve only touched the surface here.
If you need help with a compulsory purchase, as members of the Royal Institution of Chartered Surveyors, we offer compulsory purchase surveying as a service and 30 minutes of free advice, which you can access by giving us a call on 01522 696, email ray@walters-rural.com
