Landowners – Know Your Rights

28th June 2013

Last week, the government set out plans to spend £100bn on new infrastructure projects, which include new road schemes, increasing rail capacity and the implementation of flood protection schemes. The package, of which £50bn will come in 2015-16, is also aimed at boosting new sources of energy like shale gas.

In the Commons, Danny Alexander announced the road building programme was the largest for 40 years. Within the north east, it is expected Ministers will give the green light for feasibility studies to be carried out at notorious congestion hotspots which include the construction of Testos junction flyover connecting the A19 to A184 south of Newcastle and the A19/A1058 coast road near Newcastle improving access to the Port of Tyne and surrounding employment sites. A1 upgrade works are also expected at Lobley Hill on the Newcastle western bypass.

Over time we will see the finer detail on how this money will be spent across the region, but whether this contributes towards simple improvements or new schemes, they will undoubtedly affect many land owners and occupiers through land take or via access requirements.

Nearly all property, one way or another is affected by some type of infrastructure and therefore as a land owner or occupier it is really important you understand what compensation you could be entitled too if new schemes or improvements are to be delivered across your property. The Treasury’s announcements will undoubtedly result in opportunities for many, however it’s important that those affected by the schemes are considered. Compensation arising from land take or access requirements can be a complicated, so here are a few pointers;

  1. Compensation will be payable for the loss of land physically taken by a scheme.

  2. In most cases, an acquiring authority may only require part of the property and therefore compensation will be payable for any diminution in value arising from the property being severed or otherwise affected by the execution and use of the works.

  3. Under Compulsory Purchase Powers, compensation is assessed upon the market value of the property assuming the scheme is not in place.

  4. There may be a potential to claim for any future development value which would be lost as a result of the scheme, however this approach needs to be carefully explored.

  5. Disturbance will undoubtedly be caused and the acquiring authority will have to address this. Compensation will be payable for inconvenience or any loss caused as a result of the works, such as the effect on business operations. One must be mindful however that any loss must have arisen as a direct consequence of the scheme and the claimant must have taken all reasonable steps to minimise the loss.

  6. Tenants are potentially able to claim for loss in respect of the value of their tenancy on top of a usual occupiers claim.

  7. There is a thing called “betterment” which arises when retained land increases in value as a direct result of the other land being taken for the scheme. Such examples may include a new road improving access to your retained land and as a result is now able to achieve residential development. Acquiring authorities will look to use any increase in value to reduce compensation payable, so this needs some careful attention.

  8. Before entry is taken, it is important to agree accommodation works. The loss of part of a property can cause huge problems as new boundaries will be created, underground private water supplies may be affected, or access routes closed off. Try and address these issues with the acquiring authority before entry is taken.

  9. Developers often need access before any compulsory rights are applied for in order to get planning consent. This may be for carrying out surveys or investigational work. Only permit access when you are fully up to speed with what the acquiring authority’s intentions are, ensure that you are not out of pocket as a result and put in place a robust licence agreement to address any entry requirements.

  10. Keep a diary of all correspondence, works, and disturbance etc that occurs before and during the scheme. Often these schemes go on for a long time and it is important that you are fully compensated for your time spent in dealing with the scheme. A diary will help address this.

  11. Once the acquiring authority has taken possession, you may be entitled to an advance payment so any claim should be carefully considered and planned ahead where possible.

  12. All professional costs will be covered, so don’t be afraid to ask for professional advice as it can prove to be invaluable.

It’s really important that you identify the key issues early on to ensure that all matters are addressed and any claim is fully explored. An understanding of the process and the acquiring authority’s rights can prove essential when preparing a claim. In most circumstances an authority will probably try and proceed via agreement rather than through compulsory purchase powers, and so it’s really important to be prepared. There are many projects going on at present, so make sure you consider all issues and you don’t become out of pocket.

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