England and Wales Lands Tribunal

[2000] EWLands ACQ_91_2000 (03 November 2000)

ACQ/91/2000

LANDS TRIBUNAL ACT 1949

COMPENSATION – Compulsory acquisition of house in poor repair – failure of owner to respond to notices and offers – comparable values – price to be paid for freehold – Housing Act 1985 s.290 and Acquisition of Land Act 1981 – compensation £30,000.

IN THE MATTER of A NOTICE OF REFERENCE

BETWEEN MRS FATIMA GHULAM Claimant

and

BRISTOL CITY COUNCIL Acquiring

Authority

Re: 53 Bloy Street, Easton, Bristol.

Before: P R Francis FRICS

Sitting at: Bristol County Court, The Guildhall,

Small Street, Bristol.

on

1 November 2000

The claimant did not appear and was not represented.

Penny Wilford, solicitor to Bristol City Council, for the acquiring authority.


 


DECISION

1. This is a reference to determine the amount of compensation payable by Bristol City Council ("the acquiring authority") to Mrs Fatima Ghulam ("the claimant") for the compulsory acquisition of the freehold interest in 53 Bloy Street, Easton, Bristol ("the subject property").
2. At the hearing, Miss Penny Wilford, solicitor to Bristol City Council explained that the subject property is the only one of a total of 48 properties compulsorily acquired in the Easton Renewal Area upon which compensation remains to be agreed. She said that the claimant had failed to respond to any correspondence or communications from the acquiring authority in respect of the compulsory acquisition of her property, hence the need for a reference to this Tribunal. She said that in her efforts to progress negotiations with the claimant, who was believed not to speak English, she had visited her new address but had not been able to meet her. She had also spoken to the claimant's son on the telephone, and explained the procedures, but this also failed to initiate a response. An offer of £26,000 was initially made to the claimant.
3. Miss Wilford called Peter Quantick ARICS, Principal Project Officer to Bristol City Council who produced a report outlining the background to the scheme, containing details of the negotiated and agreed settlements relating to a number of comparable properties located within the clearance area and giving his valuation of the subject property at the relevant date.
4. From this report, the papers provided by the acquiring authority, and the evidence at the hearing, I find the following facts:

4.1 The subject property comprised a Victorian 2 storey mid-terrace private dwelling house with rendered elevations, finished to a parapet at the front, under traditional roofs and with metal framed windows. The accommodation contained hall, two living rooms, kitchen and bathroom at ground floor, and three bedrooms to the first. There was a small yard to the front, and a garden to the rear, the site extending to 202 sq.m. or thereabouts.

4.2 The house was located in a heavily developed residential area about 2 miles east of Bristol city centre, and where the majority of houses had been built in the 1870's. The area as a whole was suffering from urban decay. In response to powers granted by the government in 1989, Bristol City Council declared the 'Easton Renewal Area' in 1991. The majority of the streets included within the area were programmed for renovation under a group repair scheme, but a number of properties were considered to be unfit for human habitation as many of the oldest (of which the subject property was one) had been suffering from structural movement causing distortion to walls, floors and roofs. This, together with the use of poor quality materials in construction had contributed to severe problems of damp and disrepair.

4.3 Following detailed surveys and investigations in 1994 and 1995 and recommendations to the Housing Committee, it was considered that demolition of the worst affected properties and redevelopment of the land with new homes and public open space was the most economic and beneficial route to take. As to the subject property, it had failed to meet the requirements of grounds b, c and f of s.604 of the Housing Act 1985 which required it to be free from serious damp, to be free from dampness prejudicial to the health of the occupants and to have satisfactory facilities for the preparation and cooking of food. It was, therefore, unfit for human habitation.

4.4 The Council resolved to declare a total of 10 clearance areas covering 57 properties (9 of which were already owned by the Council).

4.5 A Public Inquiry was held into the Council's application for confirmation of the City of Bristol (Nos 33,39,43-49 (odd) 53,55 and 65 Bloy Street, Easton Clearance) Compulsory Purchase Order 1996 ("the CPO") and following the inspector's recommendation, it was confirmed by the Secretary of State on 14 February 1997. Notice of that confirmation was delivered to the claimant on 28 February 1997.

4.6 A letter enclosing the Statement of Effect on Parts II and III of the Compulsory Purchase (Vesting Declarations) Act 1981, and reminding the claimant of the District Valuer's preparedness to negotiate was delivered on 15 May 1997.

4.7 The General Vesting Declaration was made on 31 July 1997, and the claimant was advised on 1 August of that year. It came into effect on 30 August 1997 and this was the Date of Entry.

4.8 The valuation date is 30 August 1997 and the acquiring authority have valued the subject property at £30,000 as at that date.

4.9 The Notice of Reference to this Tribunal was submitted by the acquiring authority on 24 January 2000.

5. The sole issue for my determination is the value of the freehold interest in the subject property at the Date of Entry.
6. Mr. Quantick is a chartered surveyor with the acquiring authority, and has responsibility for the management of a portfolio of properties controlled by the Council's Housing committee. Having joined the Council in August 1999, much of the preparatory work in respect of his report and evidence was undertaken by one of his valuer colleagues, Elaine Scudamore.
7. The report detailed the background to, and reasons for the compulsory acquisition together with the basis of the valuation (assessed in accordance with rule 2 of section 5 of the Land Compensation Act 1961). He had selected six comparables from the complete list of Bloy Street settlements, those being the ones he considered to be within close proximity, and similar in terms of age. Adjustments were made to take account of differences relating to accommodation and condition. The comparables were:

No 49. Similar size, better condition with central heating. Agent appointed by owner, completed by agreement 11 September 1996. £37,000.

No 51. Slightly larger at ground floor, otherwise similar. Not declared unfit and considered good condition. Agent appointed. Completed by agreement 21 May 1996. £35,500.

No 54. Smaller property with two bedrooms. Whilst not declared unfit, was in poor condition with defective electrics, unmodernised kitchen and some damp. Agent appointed. Agreed following GVD (17 July 1997). £28,000.

No 55. Similar size but although generally updated was declared unfit (grounds b and c – dampness). Agent appointed. Completed by agreement 3 January 1997. £36,000.

No 56. Smaller property, with the third bedroom formed by dividing original second in two. Reasonable condition, not declared unfit. No agent appointed. Completed by agreement 29 March 1996. £28,000.

No 57. Smaller property and again, third bedroom formed by dividing one of the two original bedrooms. Declared unfit on ground c only, but well presented and mostly in good condition. No agent appointed. £33,000.

8. Mr. Quantick said that if the subject property had been in good condition, a figure of £36,000 would have been appropriate (as supported by No's 49, 51 and 55). However, its very poor condition warranted a deduction of £6,000 to allow for the cost of remedial works associated with severe dampness, cracks in walls, rusty window frames, rotten sills and uneven floors. No's 54 and 56 (settled at £28,000) support his lower figure, the extra £2,000 allowing for the fact that the subject property was slightly larger.
9. An analysis of the comparables, based on floor areas (where they were known) resulted in a range from £395 per sq.m. for the highest settlements, to £314 per sq.m. for the lowest . £395 per sq.m. gives £36,000 for the subject property, and £314 per sq.m. gives £28,500. Mr. Quantick said that for the reasons he had given, regarding the condition of the subject property, a figure at the highest end of the range would not be appropriate. He had taken the lower figure (giving £28,500) and added £1,500 for the fact that the property was slightly larger, and the valuation date was some 18 months later than the dates of those settlements. His opinion of value was, therefore, £30,000 as at the relevant date.
10. In response to a request from me, by a direction dated 11 July 2000, Mr. Quantick had tried to obtain evidence of true open market sales within the vicinity. He produced at the hearing a brief supplementary report which gave details of 4 open market transactions of non-Council properties. He said he was unable to verify the figures given, as the information had been extracted from valuation sheets prepared during investigations to establish values for council Right to Buy sales. The information on those sheets had been obtained from local estate agents. The 4 properties that were in the general vicinity of the subject property were:

70 Greenbank Avenue. 3 bed house in good condition with loft conversion, modern kitchen and bathroom. Completed May 1998. £39.000.

16 Graham Road. 2 bedroom mid-terrace house with 1^st floor bathroom. Some work needed. Completed July 1997. £33,500.

4 Walton Street. Much improved and extended 4 bedroom property. Completed November 1997 £42,000.

17 Woodborough Street. 3 bedroom mid-terrace house, well presented with uPVC double glazing and central heating. Completed 'late' 1997. £38,000.

11. Details of 4 Council properties that proceeded to completion under the Right to Buy scheme were also given. These were similar type properties with valuation dates ranging from September 1996 to September 2000. The valuations ranged from £32,000 to £37,000.
12. In conclusion, Mr. Quantick said that the evidence proved that houses similar to the subject property, in good condition with modern facilities and central heating, were selling for figures between £35,000 and £40,000. Those in poor condition, but still classed as fit for human habitation were selling for closer to £30,000, which confirmed his overall view of the value of the subject property.

Decision.

13. Mr. Quantick (with the assistance of his colleague) had produced a comprehensive report and a well reasoned analysis of the comparable settlements relating to the scheme. It was evident that the condition of the subject property was somewhat poorer than the six examples he had given. It was also apparent, from the copy meeting notes relating to the 55 Bloy Street negotiations that, due to the blight that the Renewal Area proposals had caused to the area in general, open market sales evidence was very difficult to find. It had been agreed that a value per square foot analysis was an appropriate method of establishing values for settlement purposes, and Mr. Quantick had also used this method to back up his assessment for the value of the subject property.
14. I accept that in circumstances such as the instant case, true open market evidence might be hard to establish, but resulting from his further efforts, Mr. Quantick was able to turn up 4 properties in the general area. Whilst I note that the details are not directly authenticated, having been extracted from file notes prepared by other valuers in connection with other matters, I am satisfied that, on the balance of probabilities, the information is likely to be correct. Those comparables serve to lend support to the conclusions that had been reached in Mr. Quanticks first report.
15. Having satisfied myself that the acquiring authority has taken all reasonable steps to establish the value, and in the absence of an appearance by, or any evidence from the claimant, I accept the Council's valuation. The amount of compensation payable for the freehold interest in 53 Bloy Street, Easton, Bristol, is determined at £30,000. The claimant's proper legal costs of transfer, if any, are to be paid in addition.
16. This decision determines the substantive issue in this reference, and my award is final. The acquiring authority made submissions seeking the costs of the reference on the grounds that were it not for the refusal of the claimant to acknowledge correspondence or negotiate settlement terms, the reference might not have been necessary.
17. Representations on costs are invited from the claimant and a letter accompanying this decision sets out the procedure for submissions in writing. Following receipt, or expiry of the time limit for their submission, the question of costs will be decided. At that point, and not before, the decision will take effect, and the provisions relating to the right of appeal in section 3(4) of the Lands Tribunal Act 1949 and Part 52 of the Civil Procedure Rules will then come into operation.

Dated: 3 November 2000

(Signed) P R Francis FRICS

Addendum as to Costs

18. No submissions having been received from the claimant within the prescribed timescale, I have now considered the acquiring authority's claim. That claim was for £6,240 representing its officers' time spent in preparing the case, including the expert valuer's report, the court fee and time spent at the hearing. In addition, but unquantified in its submissions, the authority also sought the Lands Tribunal hearing fee following the determination.
19. I sympathise with the acquiring authority in that, due to the claimant's failure to negotiate or to respond to communications, it was put to additional expenditure. Nevertheless, there could be no guarantee that even if negotiations had taken place, agreement that would have resulted in a reference to this Tribunal being avoided, would have been reached. Whilst it is appreciated that the reference and the need to attend the hearing did create additional work for the authority, much of the requisite information would have been readily to hand, and I consider a claim for a total of approaching 130 hours of officers' time to be excessive. The sum claimed is also out of proportion to the award.
20. I opened a sealed offer made to the claimant by the acquiring authority on 24 August 2000 which amounted to £30,000 plus interest – precisely the same as my award. The normal practice of this Tribunal is for costs to follow the event, and as my award matched the authority's offer it is right for a costs award to be made in its favour.
21. However, for the reasons I have given, I do not intend to burden the claimant with costs which amount to in excess of 20 per cent of the value of her former home. I determine that the claimant shall pay an arbitrary sum of £2,000 towards the acquiring authority's costs, such sum to be deducted from the final award and following the calculation of interest on the £30,000.

Dated: 8 December 2000

(Signed) P R Francis FRICS