Agents Eye Column – February

4th February 2013

Do you know what Compensation you can claim from compulsory purchase schemes such as HS2?

This week has seen the announcement of HS2 and the route planned. They’ll be many land and property owners that will be affected by the development in Yorkshire both from a perspective of physical loss or devaluing of their property. Compensation from access from water companies or compulsory purchase for HS2 or the Humber carbon capture scheme is a complicated route, so here are a few pointers:

  1. Compensation is payable for loss of land/property physically taken; diminution in value arising from your property being severed or otherwise affected; disturbance (such as noise, dust, extra time taken for field operations, damage to drainage), occupiers loss (relocation/acquisitions costs) and home loss.
  2. Compensation is based upon the market value of the property without the scheme in place. Many assume that they will get more than what the property is worth, but legally, the developers are only obligated to pay the market value. There is no additional value because it is compulsory.
  3. There is potential to claim for any future development value which would be lost as a result of the scheme, but you need to be careful and particularly with the recent review of local development plans, you need to be able to prove there is potential.
  4. Tenants are potentially able to claim for loss in respect of the value of the tenancy on top of the usual loss of crops etc.
  5. There is a thing called “betterment” i.e. is your land able to achieve residential development now that the scheme has gone ahead. It’s something that many acquirers like to use to reduce the claim and amounts payable – be careful of this.
  6. I’m aware that HS1 is already paying out some compensation to homeowners who are struggling to sell their property because of the announcement of the scheme. This is something worth bearing in mind given that the HS2 route is now announced.
  7. Agree accommodation works and ensure they cover off every eventuality e.g. new water pipes/troughs, new access roads to fields; access over the works to other land etc.
  8. Developers often need access before any compulsory rights are applied for in order to get planning consent. Ensure that you are not out of pocket as a result; put in place a robust licence agreement.
  9. Keep a diary of all correspondence, works, disturbance that occurs before and during the scheme. Often these schemes go on for a long time and you’ll forget and not be properly compensated for your time.
  10. All professional costs will be covered, so don’t be afraid to ask a professional for advice, it won’t cost you anything.

It’s really important that you identify the issues arising early on and seek to maximise the claim. Understanding what potential for other losses incurred is really important. The developers will probably try and seek agreement for service of notice, and so it’s important you are well prepared. Yorkshire has many compulsory acquisitions or pipeline schemes occurring at present, make sure you’re not out of pocket.

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