Home ownership is generally regarded as providing safety and long-term security, but this is not always the case. Michael Perrin, Solicitor in our residential property department looks at how properties can be compulsorily purchased by public authorities to make way for socially beneficial developments. Any householders affected are entitled to be compensated at the full market rate, although in a recent case it took a court appearance to ensure this.
Compulsory purchase orders and property valuation
The case concerned a maisonette that was on the ground and first floors of a tower block that was built in the so-called ‘brutalist’ style in the 1970s. The block and others on the city housing estate had been compulsorily acquired by the local authority to enable a wholesale redevelopment of the area. The council and the maisonette’s owner could not agree on the appropriate level of compensation payable and the matter was therefore referred to the Upper Tribunal (UT) for determination.
The owner argued that at the date of the compulsory purchase the property had an open market value of £300,000. The council contended for a figure of £235,000. After considering prices fetched by comparable properties, the UT assessed the value of the maisonette at the relevant time at £286,000.
The council had already agreed to pay the owner compensation in respect of the loss of his iPhone in the course of possession being taken of the maisonette. However, no award was made in respect of other items of his property that had been disposed of by the council. He had been aware of the date on which he was required to move out and had taken no steps to salvage those items.
He was, however, entitled to compensation for the loss of his home equivalent to 10 per cent of the open market value. In addition, he was awarded a £7,470 disturbance payment to reflect the costs of acquiring an alternative home. The owner’s total award therefore came to £322,070.
Contest a compulsory purchase order valuation
If your property is subject to a compulsory purchase order and the council’s valuation for compensation purposes is too low (as is often the case if uncontested), we can assist you to obtain an appropriate settlement. Please contact Michael Perrin, Solicitor in our residential property department on 01254 88 44 22 or complete our online enquiry form to discuss your concerns with one of our team of expert advisors.