England and Wales Lands Tribunal

[2000] EWLands ACQ_132_2000 (30 November 2000)

ACQ/132/2000

LANDS TRIBUNAL ACT 1949

COMPULSORY PURCHASE – compensation – derelict dwellinghouse within clearance area – relevance of comparables – whether increase in price paid for one comparable significant – compensation awarded £12,000.

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN SHARIF KHAN Claimant

and

CITY OF BRADFORD Acquiring

METROPOLITAN DISTRICT COUNCIL Authority

Re: 2 Clifton Street,

Bradford, BD8 7DA

Before: N J Rose FRICS

Sitting in public at Huddersfied County Court

On 23 November 2000

Vincent Fraser, instructed by Peter Gardner, Department of Legal and Democratic Services, City of Bradford MBC, for the Acquiring Authority

The Claimant did not appear and was not represented.


 


DECISION

1. This is a reference to determine the compensation payable by the City of Bradford Metropolitan District Council ("the acquiring authority") for the freehold interest in a dwellinghouse known as 2 Clifton Street, Bradford, BD8 7DA ("the subject property"). The property is to be compulsorily acquired under the City of Bradford Metropolitan District Council (234-244 Manningham Lane and 2-4 Clifton Street, Bradford) Compulsory Purchase Order 1998 ("the CPO"), made on 23 April 1998 and confirmed by the Secretary of State for the Environment, Transport and the Regions on 18 November 1998. The area had previously been declared a clearance area on 17 June 1997. Notice to treat was served on 26 July 1999 and notice of entry on 14 December 1999. Possession had not been taken by the date of the hearing before the Tribunal and so the valuation date is the date of that hearing, 23 November 2000.
2. By Order of the Tribunal dated 24 July 2000, the claimant, Mr Sharif Khan, was required to serve the report of his expert witness by 4.00 pm on 29 September 2000, failing which he would be debarred from adducing such evidence in these proceedings. No such report was served by that dead-line or at all. In a letter dated 31 October 2000, Messrs Last Cawthra Feather of Bradford asked for their name to be removed from the record as solicitors acting for the claimant.
3. Mr Vincent Fraser of Counsel appeared for the acquiring authority at the hearing. He called Mr David Fisher, BSc, CEng, MICE, MIHT, the Senior Development Engineer in the Structural Engineering Unit of the acquiring authority, and Mr Ivor James, BSc (Hons), a Property Services Officer employed by the acquiring authority. The acquiring authority's valuation was £2,000. The claimant did not appear at the hearing. A friend of his, Mr Mohammed Javed, was present and made himself known to the Tribunal, but expressly stated that he was not representing the claimant in the proceedings.
4. From the evidence, principally that of Mr Fisher, I find the following facts:

(1) The subject property is an end of terrace dwelling on two storeys with part cellars under the front, erected about 100 years ago. The above ground accommodation originally comprised an entrance hall, living room and kitchen on the ground floor and three bedrooms plus bathroom on the first floor. It is situated on an old filled quarry which was active around 1847.

(2) The property is empty and the window and door openings have been blocked up. This blockwork was originally "tight" within the openings but there are now slight gaps along the side of the blockwork panels. Subsidence of the front wall is evident along the string course at first floor level and there are movement cracks at each side of the front door. The front, rear and gable walls lean outwards. There are a number of slight to moderate cracks in the rear wall and a more severe crack at eaves level between the window lintel and the gable corner. Lintels and sills have fractured. Pointing is old and in poor condition. The roof is slated and the slates on the rear slope are in some disarray; there is a substantial hole in this rear slope.

(3) Internally, the property is virtually derelict. All internal walls and ceilings have been stripped of their plaster and the staircase and first floor are inches thick in pigeon droppings and carcasses. First floor joists on the front wall have much reduced bearings, and the brick wall between the front living room and the hallway has been demolished. There is much debris in the back kitchen and on the stairs. The first floor landing is pulling away from the gable wall and has partially collapsed and it is unsafe to venture beyond the stairhead. There is a severe crack in the rear wall below the landing window. Access to the cellar is blocked by debris.

(4) Although much of the movement now apparent at the property was in evidence in 1995, further cracking has occurred since then.

(5) There is a "soft spot" in the filled ground between the subject property and Nos.242 and 244 Manningham Lane immediately to the south west. The buildings immediately adjacent to this soft spot are tending to settle into it.

(6) The internal deterioration of the subject property has led to a reduced restraint of the enclosing walls and will, if left unremedied, lead to an eventual reduction in their stability to the extent that they will become dangerous. Structural works would be required to tie the walls and floors together and to tie the inner and outer skins of masonry together. The cost of doing this would be £3,500. The only satisfactory remedy to the problem of subsidence is to install piles and ground beams to support the walls off the quarry base. The cost of such works would be £21,400.

5. The only issue is the value of the freehold interest in the subject property, with vacant possession, to reflect its poor state of repair. In order to assess that value, Mr James relied upon three categories of comparable evidence. They led him to conclude that the value of the subject property was £2,000. One of his three comparables was the immediately adjoining house, 4 Clifton Street. An offer of £5,000 was made to the owner of that property by the acquiring authority in 1997, prior to the making of the CPO. In fact, that offer was not accepted and the compensation payable was subsequently referred to this Tribunal. Immediately prior to the commencement of the hearing of the present reference, the reference on No.4 was disposed of by way of a consent order. The agreed compensation was £15,000.
6. Mr James said that the change in the acquiring authority's valuation of No.4 did not lead him to alter his opinion of the value of the subject property. Firstly, the latter suffered from severe structural defects and was uninhabited, derelict and boarded up. Secondly, the remaining comparable evidence upon which his valuation had been based indicated that a purchaser would not pay more than £2,000 for the subject property. That comparable evidence related to 154 Salt Street, Bradford and eight houses in Iddesleigh Street, Bradford. I shall consider each in turn.
7. 154 Salt Street is a four bedroomed mid-terraced property which was built on an old quarry site and constructed approximately 100 years ago. It is located within a mile of the subject property. It suffered from severe structural problems. On 10 March 1994 the acquiring authority's Property Services Section wrote to the owner's representatives, indicating that it would be prepared to recommend the purchase of the freehold for £5,000. This letter was expressed to be without prejudice, subject to contract and subject to committee approval and to finance being available. In the event, the necessary finance was not forthcoming and the matter did not proceed. The property was subsequently sold by public auction for £3,500 on 4 September 1995.
8. I do not obtain any assistance from this information. The offer of £5,000 in 1994 – more than six years prior to the relevant valuation date – was merely an offer. It did not result in a transaction and there is no evidence that it would have been acceptable to the owner if the necessary funds had been available. As for the auction sale in 1995, Mr James explained that at the time there was an ongoing debate as to whether the structural defects suffered by properties in the locality were an insurance matter "or whether the local authority should be stepping in". The price of £3,500 realised at auction was therefore obtained against the background of a risk that the building might be compulsorily acquired. Accordingly, it does not provide reliable evidence of the unblighted value of that property.
9. Mr James' second set of comparables, in Iddesleigh Street, are located approximately 2.5 miles from the subject property. The houses in the street were constructed about 100 years ago and comprised 10 two bedroom through terraced houses and 4 back to back cottages. The acquiring authority declared the street a clearance area and subsequently decided to make a compulsory purchase order. Between May 1996 and November 1998 it purchased Nos.6,8,12,16,18,22,24 and 28 at a price of £2,000 each.
10. Mr James also referred to the sale by auction on 14 November 1994 of No.22 Iddesleigh Street for £5,000 and No.10 for £3,000. I asked him why the compensation paid by the acquiring authority was less than prices previously achieved at auction for neighbouring houses. It then emerged that the properties purchased by the acquiring authority were the subject of a serious fire on 16 April 1996. Prior to that date, terms had been provisionally agreed for the acquisition of No.16,18,24 and 28 for £13,000, £16,000, £12,000 and £11,000 respectively. These agreements were not binding and the acquiring authority reduced the prices to £2,000 each to reflect the deterioration in the properties resulting from the fire. It also agreed to pay the same figure for four other properties, in respect of which no agreement had previously been reached.
11. It is unfortunate that, in his report, Mr James made no reference to the fire damage when he referred to the houses purchased for £2,000 in the following terms:

"Although the properties were in a poor physical condition and had suffered vandalism, they were considered to be structurally sound".

12. In the absence of any evidence as to whether the fire damaged properties were capable of repair and, if so, at what cost, I can obtain no help from them. Nor are the prices paid for Nos.10 and 22 of assistance. Mr James said that the acquiring authority had expressed an interest in declaring a clearance area before the date of the auction. The auction therefore took place against the background of a risk of compulsory purchase. Consequently, the prices paid do not necessarily reflect values in the no scheme world.
13. As I have said, the remaining comparable evidence upon which Mr James originally relied was an offer of £5,000 made by the acquiring authority in 1997 for 4 Clifton Street. At first glance, this would appear to be a useful comparable. It immediately adjoins the subject property and forms part of the same terrace. It is a broadly similar dwellinghouse and both houses are situated above an old quarry. Unlike the subject property, it is occupied and displays no sign of recent movement. Movement has taken place in the past, however, as is shown by sloping sills and lintels, bulging of the rear walls and the presence of two steel tie plates. There is also some separation of the inner and outer skins of masonry to the front and back walls, which both lean.
14. Although Mr James originally relied upon the acquiring authority's 1997 offer for No.4 when making his valuation, he did not consider that its subsequent increase to £15,000 meant that he should revise his valuation of the subject property. At the hearing he sought to distinguish No.4, among other reasons, on the grounds that the subject property suffered from severe structural defects. This suggestion was surprising, in the light of Mr Fisher's evidence that the structural works required to be carried out to No.4 would be more expensive than those required at the subject property. Both buildings required piling and works to tie the walls and floors together and to tie the inner and outer skins of masonry together. However, Mr Fisher said that if he were consulted by a prospective purchaser of No.4 in the absence of the CPO, he would advise that the continuing movement of the subject property would be likely to affect No.4, since the front and back walls were continuous throughout both buildings. The demolition of the subject property only, as the more seriously affected of the two, whilst leaving No.4 in place, would entail weatherproofing the newly exposed party wall of No.4 at an estimated cost of £9,000. The same consideration would not apply to a purchaser of the subject property, since there was no clear evidence that recent movement had occurred in No.4.
15. In Mr Fisher's opinion, the total cost of the major structural works which would need to be carried out to No.4 was £35,650, compared with £24,900 in the case of the subject property. Mr Fisher is an experienced engineer who seemed to me to be an impartial expert witness and I accept his evidence in its entirety.
16. In addition to structural works, both buildings required substantial expenditure on general repairs. It is clear from Mr Fisher's description of the two properties that those works would be far more extensive in the case of the subject property than for No.4, but Mr Fisher fairly stated that he was not qualified to estimate the cost of such works. Mr James did not quantify those costs either and, as I indicated at the hearing, I do not consider that such limited inspection of the subject property as I might be able to make would be of further assistance to me in this connection.
17. In all the circumstances, I have come to the conclusion that the compensation agreed for No.4 is the best available evidence of the value of the subject property and that the most reliable guide to the difference between the values of the two houses is provided by Mr James' original valuations, which suggested that the subject property was worth £3,000 less than No.4. In the absence of any more cogent evidence I accept that approach and find that the compensation payable for the freehold interest in the subject property is £12,000. The proper legal costs of transfer, if any, are to be paid in addition.
18. I make no order as to costs.

Dated: 30 November 2000

(Signed): N J Rose