England and Wales Lands Tribunal

[2001] EWLands ACQ_240_2000 (28 June 2001)


 


ACQ/240/2000

LANDS TRIBUNAL ACT 1949

COMPENSATION – compulsory acquisition of house in poor repair – price to be paid for freehold – comparable values – Compulsory Purchase Act 1965 s.5(3) – compensation £32,000 plus £1,500 disturbance and surveyor's fees on Ryde's scale.

IN THE MATTER of A NOTICE OF REFERENCE

BETWEEN PRITAM SINGH NATAL Claimant

and

SANDWELL METROPOLITAN BOROUGH COUNCIL Respondent

Re: 118 St Pauls Road, Smethwick, West Midlands

Tribunal Member: P R Francis FRICS

Sitting at: Birmingham Rent Assessment Panel,

East Wing, Ladywood House, 45-46 Stephenson Street, Birmingham, B2 4DH

on

5 June 2001

The claimant did not appear and was not represented

Stephen O'Connor, solicitor, Sandwell District Council Legal and Democratic Services, for the acquiring authority

DECISION

1. This is a decision to determine the amount of compensation payable to Pritam Singh Nahal ("the claimant") by Sandwell Metropolitan Borough Council ("the acquiring authority") for the freehold interest in 118 St Pauls Road, Smethwick, West Midlands ("the subject property") in connection with the Sandwell (St Pauls Road) Compulsory Purchase Order 1990 ("the CPO").
2. The claimant did not appear and was not represented. Mr. Stephen O'Connor, solicitor, appeared for the acquiring authority and called Alan William Whiting, a legal assistant with the acquiring authority's Legal and Democratic Services Department who gave evidence as to the authority's procedures in respect of the CPO and the acquisition, and Susan Brookes MRICS, a valuation officer with the Valuation Office Agency, who gave valuation evidence.
3. From the written and oral evidence I find the following facts:

3.1 The subject property comprised a detached, two-storey turn of the century private dwelling house, constructed of brick with a slate roof and was located in a predominantly residential area comprising properties of varying sizes and ages. St Pauls Road is a through road linking Smethwick High Street with the district of Rood End.

3.2 It had a gross external area of 130 sq.m. and contained 2 living rooms, kitchen, scullery, wc and store at ground floor and 3 bedrooms and bathroom at first floor. There was a shallow front garden, and a long, narrow rear garden.

3.3 Following an inspection by an officer of the Council on 12 June 1989, the property was classified as unfit for human habitation under the provisions of s.604 of the Housing Act 1985. It was described as suffering from rising damp, sloping floors, perished plaster to walls and had unsatisfactory facilities for the preparation and cooking of food. Externally, there was settlement and perished pointing to the brickwork, the front chimney leaned and there was poor drainage to the rear yard.

3.4 In accordance with its powers under the Housing Act 1985 and the Acquisition of Land Act 1981, the Council declared clearance areas on 1 February 1990 which included the subject property, and subsequently made the Sandwell (St Pauls Road) Smethwick Compulsory Purchase Order 1990 on 11 February 1993. This was confirmed, with modification, by the Secretary of State on 22 February 1995.

3.5 Notice of Confirmation of the CPO was delivered to the subject property on 6 April 1995 together with advice that the Council intended to make a General Vesting Declaration ("GVD") under s.4 of the Compulsory Purchase (Vesting Declarations) Act 1981. The GVD was made on 22 August 1995 and served upon the claimant the next day. The property was vested in the Council on 20 September 1995, following a notice to the claimant to that effect dated 14 September 1995.

3.6 A claim for compensation was received by the Council on 22 September 1995.

3.7 Following negotiations with the District Valuer and Valuation Officer, compensation in the sum of £25,000 exclusive of disturbance and home loss payments was agreed with the claimant's then appointed agent on 26 September 1995. Due to a misunderstanding, whereby the claimant thought that figure related to site value only, the agreement was withdrawn.

3.8 Failure to agree upon a revised figure resulted in the Notice of Reference to this Tribunal being submitted by the acquiring authority on 18 December 2000.

3.9 The valuation date is 20 September 1995.

ISSUE

4. The issues for my determination are the price to be paid for the freehold interest in the subject property together with disturbance and surveyors fees.

ACQUIRING AUTHORITY'S CASE

5. Mr. Whiting is a legal assistant with the Legal and Democratic Services Department of the acquiring authority, and has had conduct of this acquisition throughout the CPO process. He set out the steps that the acquiring authority had taken throughout the compulsory acquisition process, the facts being set out in para 3 above. He said that following the claimant's failure to agree terms, the District Valuer and Valuation Officer had increased his offer of compensation to £31,500 in settlement of all heads of claim, including a disturbance payment but the claimant had not indicated his agreement to the revised offer. A Home Loss Payment in the sum of £2,500 has been paid.
6. As to this Reference, Mr. Whiting said that all relevant documentation and a Statement of Facts had been posted to the claimant at his last known address in Leeds, and in order to ensure that the documentation had been received he arranged for an officer of Leeds City Council to hand deliver copies to that address. The documents were all returned by the claimant unanswered. In response to a question from me, Mr. Whiting confirmed that he was satisfied the writing on the returned packets was that of the claimant, and that the address to which they had been sent was, indeed, the one at which he was living.
7. Mrs Brookes is a valuation officer with the Valuation Office Agency in Birmingham, having transferred there in 1995 when the Sandwell office closed. She has 13 years valuation experience, all of which has been spent in the Sandwell area and has dealt with over 300 compulsory acquisition cases for the acquiring authority. She inspected the subject property both internally and externally on 28 July 1995.
8. Describing the property as being in a residential road that comprised dwellings of a wide range of style and age, she said she had considered the Council's schedule concerning matters relating to the unfitness for human habitation referred to in the s 604 Notice served in 1989, and confirmed that, at the date of her inspection, it continued to be in poor repair. Mrs Brookes set out a list of defects that she had noted, and said that she estimated between £15,000 and £20,000 would have been needed to put the property back into an acceptable state of repair. She said that the overall condition of the property had been taken into account in her valuation of £30,000 at the relevant date, but if it had been in good order it would have been worth between £47,000 and £48,000.
9. In formulating her opinion of value, Mrs Brookes had considered a number of other compensation settlements in St Pauls Road at and around the valuation date, together with the results of auction sales of a number of similar properties in Smethwick, and produced schedules relating to these comparables.
10. As to the settlements, she said number 115 St Pauls Road, next door to the subject property, had been agreed at £48,000 in July 1990 – some 5 years before the valuation date. it was substantially larger at 238 sq.m., had 5 bedrooms and a garage and was reported to be in good condition. In her opinion, property values had fallen considerably during the intervening period.
11. Number 119 St Pauls Road, next door to the subject property on the other side, was also slightly larger, at 136 sq.m. and had similar accommodation, but was end-terraced. Although in poor decorative order it was understood to be in better overall condition and had been agreed at £41,500 in November 1996. Number 120 St Pauls Road was inner terrace but very similar in size and accommodation. It was in much better condition with central heating and compensation was agreed in January 1997 at £44,000. By then, property values had marginally improved.
12. Number 270, also inner terrace and in reasonable condition but with a propped up cellar, was settled at £32,000 in December 1996. Similarly, number 277, which was slightly smaller than the subject property, inner terrace, and in better condition was settled in September 1995 at £32,000. Number 284 was much larger (213 sq.m.) but semi-detached and in much worse condition than the subject property. That property was agreed at £36,500 at February 1997.
13. There were a number of other settlements in St Pauls Road on properties of similar size in excess of £40,000, but these were all in better condition than the subject. They were, however, all end or inner terrace. There were also many settlements at between £28,000 and £29,000 but these were all in poor order, smaller and again end or middle terrace.
14. In regard to the collective auction sales that had been held around the valuation date, Mrs Brookes said the results indicated that typical Victorian houses in need of modernisation and improvement were selling at figures in the region of £20,000 depending upon their location. The best price achieved (£30,000) was for a house in St Albans Road which is a better location, and the property had been double-glazed.
15. In response to questions from me, Mrs Brookes said that, regarding her opinion of rises and falls in the market between 1990 and 1997, she did not have any indices upon which to base her views, but was commenting from her knowledge and experience. She had not viewed any of the comparables internally, although had seen them from the outside, and had relied to a large extent on the officers' file notes on the properties. As to the prices achieved at auction, she did not think that prices were necessarily less because of the method of sale, or due the state of the market at the time and the number of repossessions that were being sold.

DECISION

16. I am satisfied from Mr. Whiting's evidence that the acquiring authority has adequately discharged its duties to the claimant under the relevant legislation.
17. Mrs Brookes produced a well presented and fully reasoned report, and had taken into consideration a large number of settlements in St Pauls Road which showed a very broad range of values over what was said to be a varied neighbourhood in terms of property types, ages and styles. Whilst she had come to the conclusion that the value of the subject property, based principally on those settlements, was £30,000 in my view the disparity between this figure and those settled on the immediately adjacent properties (Numbers 115 and 119) was a little too great.
18. Although the market was undoubtedly showing some signs of improvement between 1995 and the latter part of 1996 and early 1997, following significant falls from 1990, and the subject property needed, in Mrs Brookes' submission, about £15-20,000 spent on it, in my judgment a prospective purchaser would not have discounted his bid by the full amount.
19. Doing the best that I can from all the evidence presented, I consider that, on balance, the subject property was worth slightly more than the suggested figure. I therefore determine that the price to be paid for the freehold interest in 118 St Pauls Road, Smethwick, West Midlands shall be £32,000. I am satisfied that the disturbance figure of £1,500 offered by the acquiring authority, based upon the general level of disturbance payments agreed in the vicinity is reasonable, and thus determine that that figure shall be paid.
20. The claimant, in the early stages of the compulsory acquisition process had a firm of surveyors acting on his behalf, and I determine that fees in accordance with Ryde's Scale shall be payable, these to be assessed upon the determined compensation for the freehold in the sum of £32,000.
21. This decision determines the substantive issue in this reference, and my award is final. Mrs Brookes sought the acquiring authority's costs which had been calculated in the sum of £3,734.10 exclusive of VAT although no detailed breakdown was produced.
22. Whilst I have no doubt that the acquiring authority has been put to increased expense in bringing this reference to a hearing, there was, of course, no guarantee that negotiations with the claimant, had they taken place, would have resulted in agreement on compensation. My award was also higher than the acquiring authority's valuation. Had the claimant participated in these proceedings this would have constituted the starting point for an award of costs in his favour.
23. However, I do have discretion on costs under Rule 52(1) and take account of the difficulties encountered by the acquiring authority in having a claimant who was not prepared to enter into negotiations and who, also, failed to materialise at either the pre-trial review or the substantive hearing. In all the circumstances I have decided to award the acquiring authority a lump sum payment of £2,000 towards its costs, such sum to be deducted from the final award following the calculation of interest thereon.

Dated: 28 June 2001

(Signed) P R Francis FRICS