England and Wales Lands Tribunal

Hussain v London Borough of Newham [2006] EWLands ACQ_14_2005 (15 February 2006)

ACQ/14/2005

LANDS TRIBUNAL ACT 1949

COMPENSATION - compulsory purchase – house in dilapidated and uninhabitable condition – untraceable owner – valuation – comparable transactions – Housing Act 1985 s.17 and Land Compensation Act 1961 Part 1 – compensation determined at £260,000

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN SHABBIR HUSSAIN Claimant

and

LONDON BOROUGH OF NEWHAM Acquiring

Authority

Re: 18 Margery Park Road, London, E7

Before: P R Francis FRICS

Sitting at: Procession House, 110 New Bridge Street, London, EC4V 6JL

on

15 February 2006

The claimant did not appear and was not represented

Mr Robert Taylor, a Legal Executive with the London Borough of Newham, Legal Services, for the acquiring authority

DECISION

1. This is a reference for the determination of the amount of compensation to be paid into court by the London Borough of Newham ("the council") in respect of the compulsory acquisition of the freehold interest in 18 Margery Park Road, London, E7 ("the subject property") under the Newham (18 Margery Park Road, London, E7 0QH) Compulsory Purchase Order 2002 ("the CPO"), where the registered owner, Shabbir Hussain, is untraceable.
2. At the hearing, Robert Taylor, a Legal Executive with the council, outlined the reasons for the CPO and the steps that had been taken to trace the owner, and called David Drane MRICS, a District Valuer with the Valuation Office Agency, who produced valuation evidence.
3. From the evidence, I find the following facts:
4. 1 The subject property comprises a bay fronted 19^th century (c 1870) Victorian mid-terrace house of brick construction under slated roofs. It has principal accommodation over two floors and, with a 2 storey rear outrigger, comprises two inter-connecting reception rooms, kitchen and bathroom at ground floor and three bedrooms, additional bathroom and wc at first. There are also two attic bedrooms, a large cellar and small enclosed gardens to front and rear. All mains services are believed to be connected or available, but there is no central heating installed. The house is in a long terrace of similar properties south of the A118 Romford Road, in an established residential area and relatively close to Forest Gate rail station.
5. 2 18 Margery Park Road was purchased by Mr Hussain in 1987 when it was occupied by statutory tenants (Mr and Mrs Lighten) who had been there since 1968. All the tenants' efforts to persuade the landlord to comply with his repairing obligations failed and subsequently, in 1989, a Repair Notice was served by the council under section 189 of the Housing Act 1985. Still no repairs were effected, and the tenants eventually vacated in 2001 although they continued to pay Council Tax and other outgoings until the vesting date. The house had, by the time Mr and Mrs Lighten vacated, become unfit for human habitation with damage occasioned to the structure and to the tenants' furnishings and effects by water ingress. (In respect of damage to the tenants' own possessions, a charging order was placed on the property).
6. 3 In accordance with the council's Empty Property Strategy, which is designed to bring long-term vacant properties back into beneficial use, and its stated policy aim of providing 8,300 additional dwellings in the Borough, LB Newham made the CPO which was confirmed by the First Secretary of State on 20 June 2003. As the property is located in the Forest Gate Single Regeneration Budget 5 Area, funding for its acquisition was available and the intention was that it would be transferred to a Registered Social Landlord who would be bound by agreement to bring it back into use.
7. 4 A General Vesting Declaration was made on 2 September 2003 and the property was formally vested in the council on 2 October 2003, which is the valuation date for the purposes of this reference. The house was subsequently sold to Passmore Urban Renewal Limited, one of the council's development partners in its Urban Regeneration Project, on 15 April 2005 for £230,000. As that company was not a Registered Social Landlord, consent was required for its disposal from the First Secretary of State for the Office of the Deputy Prime Minister under section 25 of the Local Government Act 1988, such consent being obtained by letter dated 20 December 2004. The property has since been refurbished and is now occupied.
8. Mr Taylor confirmed that the council had taken all possible steps to trace the registered owner, together with attempts to contact Union Bank Ltd, formerly of London EC3, in favour of whom there was a registered charge dated 13 October 1988. None of the searches were successful, and it appears that the bank is now no longer represented in this country.
9. Mr Drane is a chartered surveyor, and a district valuer with the Valuation Office Agency. He has over 15 years valuation experience within the VOA, seven of which have included work within the Newham area. He said he had inspected the subject property both internally and externally immediately on the vesting date before producing his valuation report and accompanying location plans and photographs on 3 October 2005. The house was in fairly poor condition generally, and was in need of major refurbishment and repair to bring it up to a good mortgageable standard. The principal roofs and the front and rear dormers required extensive overhaul, there was bowing to the single pitch roof of the outrigger, the gutters and downspouts needed urgent attention and there was evidence of water penetration internally causing damage and, in part, collapse of a ceiling. Windows all needed replacement, sills were in need of repair, together with internal replastering, modernisation of the kitchen and bathrooms, provision of new internal services and a central heating system, and complete redecoration.
10. In arriving at his opinion of value, Mr Drane said he had considered sales, at around the valuation date, of two properties in Margery Park Road, and one in nearby Clova Road. 8 Margery Park Road, which was very similar to the subject property, and was habitable, although it also required extensive modernisation was sold in February 2004 at £282,000. A larger 4 bedroom semi-detached house, 58 Margery Park Road, sold in September 2002 at £310,000. 35 Clova Road is an even larger 5 bedroom semi-detached house which sold for £350,000 in November 2003. In his professional opinion, Mr Drane said that in the light of the comparables he thought the subject property would have been worth £325,000 in good condition at the valuation date. From this should be deducted his estimate of what it would cost to carry out the necessary repairs and refurbishments (£50,000 including fees) together with an appropriate allowance for profit and risk of £15,000. This gave a value of the house in its then existing condition of £260,000.

Conclusion

11. From the evidence produced at the hearing, and from the information provided to the Registrar in preparation for it, I am satisfied that the acquiring authority has taken all reasonable steps to trace the owner and has made sufficiently diligent enquiries, but without success. I am also satisfied from the evidence that Mr Drane's valuation accurately reflects the open market value of the freehold interest in the subject property as at 2 October 2003 in its then condition.
12. The amount of compensation payable for the freehold interest in 18 Margery Park Road, London, E7 is thus determined at £260,000. The claimant's costs of legal transfer, if any, are to be paid in addition. All costs relating to this reference shall be paid by the council in accordance with Schedule 2, para (4) of the 1965 Act.

DATED 15 February 2006

(Signed) P R Francis FRICS