England and Wales Lands Tribunal

[2002] EWLands ACQ_76_2001 (05 March 2002)

ACQ/76/2001

LANDS TRIBUNAL ACT 1949

COMPENSATION – Compulsory acquisition of two residential dwellings included within Clearance Area – untraceable owner – values – compensation £36,350

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN KEITH RHODES Claimant

and

DERBY CITY COUNCIL Respondent

Re: 64 and 66 Richmond Road, Derby

Before: P R Francis FRICS

Sitting at: 48/49 Chancery Lane, London, WC2A 1JR

on

28 February 2002

The claimant did not appear and was not represented

John Rourke, of Derby City Council Corporate Services, for the acquiring authority, with permission of the Tribunal


 


DECISION

1. This is a decision on a reference made by Derby City Council ("the acquiring authority") to determine the compensation payable in respect of the compulsory acquisition of the freehold interest in 64 and 66 Richmond Road, Derby ("the subject properties") under the Derby City Council (Richmond Road/Brecker Street) Compulsory Purchase Order 1996 ("the CPO"). The owner of the properties, Mr Keith Rhodes ("the claimant"), who had, through an agent, been negotiating for the acquiring authority to purchase the properties by agreement prior to the making of the CPO, has proved untraceable.
2. Mr John Rourke, who is employed in the acquiring authority's Corporate Services Department appeared with permission of the Tribunal, and called Mr Glyn Jenney MRICS, a valuer with Derby City Council, who gave evidence outlining the background to the claim, the procedures adopted by the acquiring authority, and his opinion of value. The claimant did not appear and was not represented.
3. From the evidence, I find the following facts:

3.1 The subject properties, which were located in mature residential area in Normanton, Derby about 1 mile from the City centre, comprised an adjoining pair of flush-fronted inner-terrace Victorian dwelling houses on two storeys. No 64, which was formerly occupied by the claimant as his principal residence, contained two reception rooms and kitchen at ground floor, and two bedrooms and a bathroom at first floor. No 66, which had been let by the claimant, contained two ground floor living rooms, kitchen and single storey extension with bathroom. On the first floor there were three bedrooms. Both properties had small, enclosed, rear gardens.

3.2 No 66 had been included within a Clearance Area under s290 of the Housing Act 1985 as it was declared unfit for human habitation. No 64, although not unfit was deemed to be in very poor condition. The acquiring authority resolved to include the properties in the CPO which was made on 20 December 1996, and confirmed with modifications by the Secretary of State on 16 October 1997. A General Vesting Declaration was made on 5 February 1998.

3.3 Although no formal claim for compensation was made by the claimant, initial negotiations took place, unsuccessfully, between the acquiring authority and his then appointed surveyor (Mr S Butler BSc (Hons) MRICS) from about 1994 in an attempt to reach agreement in advance of the CPO. Completed forms were however submitted by mortgagees in February 1998.

3.4 The properties were inspected for valuation purposes in April 1998 at which time brief schedules of condition were prepared. A final improved offer was made by the acquiring authority on 7 August 1998 in the sum of £18,500 for No 64 (together with a home loss payment of £1,850) and £16,000 for No 66. This was verbally accepted by the claimant's surveyor on 12 October 1999, and the authority instructed its solicitors to progress the matter to completion. The matter did not proceed, and all contact with the claimant was lost, it being established that he had abandoned the properties at some time between February and December 2000. His solicitors said they were no longer on record, and his surveyor was unable to obtain instructions.

3.5 Steps taken by the acquiring authority to trace the claimant included contact with his former solicitors, his surveyor, the mortgagees' solicitors and a neighbour, together with placing of notices upon both properties and within the local newspaper and a search of the electoral register. Possession was eventually taken on 8 December 2000, this being the valuation date for the purposes of this reference.

3.6 Notice of reference was made to the Tribunal on 29 May 2001.

4. Mr Jenney is a chartered surveyor and has been a valuer with the acquiring authority for 12 years, principally undertaking the valuation and management of Derby City Council's property portfolio. He had inspected the subject properties in April 1998, at which time, he said, they were both in very poor condition. He produced a series of photographs of No 66 taken at the time, although the claimant had refused permission for him to photograph the interior of No 64. He also produced photographs of both properties taken following possession in December 2000.
5. The claimant, Mr Jenney said, had objected to his properties being included in a clearance area, and to the CPO, for financial reasons. He had accrued substantial mortgage arrears (hence the claims from mortgagees) and because of the fact he had negative equity, purchase of the properties at open market value would leave him in considerable debt to his mortgage providers. Throughout the whole process, the claimant had refused to accept that the CPO had taken place and even continued to maintain that the property was his when the General Vesting Declaration took effect.
6. Mr Jenney said that despite the acquiring authority's best efforts, it had not been possible to complete the acquisition by agreement. Following the claimant's abandonment of the properties all possible steps had been taken to trace his whereabouts, but to no avail.
7. As to the value of the properties, Mr Jenney said that when he inspected them in April 1998, he considered Nos 64 and 66 Richmond Road to be worth £17,000 and £15,000 respectively. However, following negotiations, revised figures were offered at £18,500 and £16,000. Whilst it was acknowledged that property values generally had risen between August 1998 when the revised offer was made, and December 2000 when possession was taken, the properties had deteriorated substantially over that period. Also, the area in which they were located was particularly run down, and inflation in property values there certainly did not follow the national trend.
8. In his professional opinion, any inflationary increase there may have been was outweighed by the deterioration in the properties' condition, and thus the appropriate values at 8 December 2000 were £18,500 for No 64 and £16,000 for No 66. No 66 had been in particularly poor condition, and suffered from severe dampness and an extensive outbreak of rot. This was the reason for the difference in value between the two, despite the fact that No 66 was slightly larger. Mr Jenney said that the fact that Mr Butler had written to the Lands Tribunal in January 2001 indicating continuing agreement to those figures supported his views that the values were static.
9. In arriving at his opinion, Mr Jenney said he had taken into consideration the settlements agreed on a number of other very similar properties purchased in connection with the scheme. There was, he said in response to a question from me, no open market transactional evidence in the area at or about the relevant date. Enquiries had been made of local agents in that regard.
10. 72 Havelock Road had been acquired on 31 March 1998 at £16,500. This was a 3 bedroom Victorian mid terrace house with single storey bathroom extension to the rear, and was in similar but slightly better condition than either of the subject properties. 64 Havelock Road was an end terrace unit acquired on the same date at £16,000. 62 Richmond Road was acquired for £20,000 on 29 August 1997. Being in the same terrace as the subject properties it was broadly similar but in much better condition and had the benefit of replacement windows. Similar but marginally larger than both of the subject properties, No 60 was acquired in May 1995 for £22,500.
11. 58 Richmond Road was acquired in September 1996 at £19,000. It was in better condition with replacement windows. Finally, 56 Richmond Road was a larger end-terrace house in very much better condition than either of the subject properties, having been extensively modernised. This was acquired in October 1996 at £24,000.

DECISION

12. Firstly, I am satisfied from the evidence that the acquiring authority has taken all reasonable steps to trace the claimant following his abandonment of the properties at some time between February and December 2000. It is strange that in January 2001, following the claimant's disappearance, his surveyor wrote to this Tribunal stating that he was acting for him. That might suggest that his whereabouts were still known, however the letter indicated that its purpose was to obtain the compensation (and Mr Butler's fees) by giving an undertaking to make the payments due to the mortgagees. Thus, it may be that Mr Butler was not still in touch with the claimant at that time. Certainly, from the evidence before me, it is apparent that the acquiring authority's searches continued right through 2001 (including enquiries of Mr Butler), but to no avail.
13. I accept Mr Jenney's valuation evidence, and his assertions that any inflationary increase in value to the properties between August 1998 and December 2000 was outweighed by their continuing deterioration. Whilst this Tribunal will normally give less weight to evidence of settlements in connection with a scheme than evidence of open market transactions, it is inevitable that in many instances where properties are located in run don or deprived areas, such evidence will be difficult if not impossible to come by.
14. Mr Jenney provided a good cross-section of settlements in respect of very similar nearby properties, and in the absence of any other evidence, I am satisfied that the figures he proposes reflect the open market value of the subject properties at the valuation date.
15. I therefore determine that the compensation payable for the compulsory acquisition of the freehold interest in the subject properties shall be:

64 Richmond Road, Derby £18,500 (plus £1,850 home loss payment)

66 Richmond Road, Derby £16,000

together with interest at the standard rate.

16. I make no award as to costs.

DATED: 5 March 2002

(Signed) P R Francis FRICS