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Compulsory purchase – dilapidations |
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Compulsory purchase compensation is assessed on the basis of the value
of the land on the open market by a willing seller. The principle behind the
legislation is that the dispossessed owner should receive full and fair
compensation, but only so that he is put in the same position as if the land
had not been taken. Thus, the landowner should not make a profit.
What is the effect of dilapidations, when the interest in land is
leasehold? That arose in a recent case, where T held a 20-year lease,
with only six months expiring. However, had the compulsory purchase
not occurred, T would have been able to apply for a new lease under LTA
1954. It was held that compensation was payable, but the real dispute
was over the extent to which that compensation should be reduced by
dilapidations. The LA argued that the full cost of dilapidations should be
deducted from the compensation due to T, whereas the Lands Tribunal
held that the scope of the dilapidations was a matter that affected the
overall value of the property. Thus, you do not simply take the market
value and then deduct the cost of the dilapidations, but instead you take
the dilapidations into account in assessing the overall market value. In
practical terms, many Ts with short leases of run-down premises may
well find that compensation is minimal. Richard Parsons v Bristol City
[2007] EWLands ACQ/190/2006. Source: www.practicallaw.com. © Practical Lawyer
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November 2007 |
