Unravelling the compulsory purchase compensation opportunities
Improvements to roads and rail services are usually welcomed by regular users, but for the owners, occupiers or neighbours of the land absorbed into the infrastructure the news of a by-pass, road widening, junction improvement or new rail link can have a major, far from positive impact on their business and property interests.
“When an authority decides to undertake large infrastructure works, they can use Compulsory Purchase powers to acquire land, or rights over land, that they require,” says Peter Series of Savills Perth.
Compensation is available to certain parties who are affected by the compulsory acquisition of land and it is essential to understand the scope of the compensation due, which should leave them in no worse position, as far as money can provide, than they were before the scheme took place.
Sam Kirkness of Savills Exeter explains, “A landowner or tenant farmer who loses land under a Compulsory Purchase Order (CPO) might be surprised to know that the compensation due is likely to extend further than simply the value of the land taken. They are entitled to claim for losses incurred during the construction of the scheme and also the on-going use of the infrastructure. Nearby property or business owners should also be aware that they may also have a right to claim compensation if the physical factors of the scheme are found to impact on them.”
Where agricultural land is compulsorily acquired, there are five main categories for which compensation may be payable:
- The value of the land taken must be compensated at its open market value
- There may also be a claim for compensation for severance where only part of the land is acquired, leaving a remaining part severed from the remainder of the holding. The value of the retained may be affected by reductions in efficiency and workability.
- Injurious Affection is payable where the value of the retained land is depreciated by the physical factors caused by the passing motor vehicles or trains.
- Disturbance payments cover all other losses that occur as a reasonable consequence (and are not too remote) of the scheme, for example crop losses, a claimant’s time in dealing with the Acquiring Authority and contractors and professional fees.
- Basic Loss and Occupiers Loss payments are due to cover the costs incurred during the re-organisation of a claimant’s affairs
In order to mitigate the losses incurred by a Compulsory Purchase scheme, the Acquiring Authority will propose Accommodation Works which should be negotiated in the early stages of the process. These can include hedge and tree screening, boundary fencing, alternative access provisions, noise reduction measures and the construction of embankments.
“The route to compensation is long and at times complex,” says Sam, “and a proper understanding of the potential compensation and compulsory purchase law is vital.”