UT Neutral citation number: [2011] UKUT 65 (LC)

LT Case Number: ACQ/527/2010

                            TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

COMPENSATION – compulsory purchase – dwelling house in poor repair – untraceable owner – valuation of freehold interest – compensation assessed at £65,000

                                 IN THE MATTER OF A NOTICE OF REFERENCE

BETWEEN                    RICHARD MARCUS LLEWELLYN DENBY                  Claimant

                                                                           and

                                                                                                                                     Acquiring

                                        EAST RIDING OF YORKSHIRE COUNCIL                 Authority

Re: 98 Seaton Road, Hessle,

East Riding of Yorkshire HU13 9EJ

                                 Determination on the basis of written representations

                                                                    DECISION

Introduction

1.           This is a decision to determine the amount of compensation payable in respect of the compulsory purchase of the freehold interest in 98 Seaton Road, Hessle, East Riding HU13 9EJ (the subject property) by East Riding of Yorkshire Council (the acquiring authority) pursuant to the East Riding of Yorkshire Council (98 Seaton Road, Hessle) Compulsory Purchase Order 2009 (the CPO), made on 15 December 2009 and confirmed on 6 April 2010.   The interest was acquired by means of a General Vesting Declaration and possession was taken on 19 July 2010 which is the date of valuation for the purposes of this determination.   The notice of reference was made by the acquiring authority

2.           The acquiring authority has tried but failed to trace Mr Denby, the registered owner and claimant for the purposes of this reference (following sporadic contact with him between 2005 and 2010) and the notice of reference was thus made by them on 7 September 2010.  Following an application dated 27 October 2010, the Registrar ordered, on 8 November 2010, that service be dispensed with.

3.           I have read the detailed synopsis relating to the history of this acquisition and the attempts that have been made to find the claimant, and am satisfied with the procedures that have been adopted, and that all reasonable steps have been taken in this regard.   I have also read the statement of reasons produced by the council in support of the CPO and the expert witness report of Geoffrey M Preston FRICS, a Senior Valuation and Estates Surveyor with the acquiring authority’s Valuation and Estates Service. 

Facts          

4.           The subject property comprises a two-storey inner terrace private residential dwelling house, constructed of solid brickwork under slate covered roofs in the early part of the 20^th century, together with a more modern rear outrigger of cavity brickwork under flat, felted roofs.   It has replacement Upvc window units and is located in an urban area close to Hessle Town centre.   The accommodation comprises hall, two reception rooms, kitchen, wc and rear lobby to the ground floor, and 3 bedrooms and a bathroom (without wc) at fist floor.  There is a small front garden, and enclosed gardens to the rear, accessed via a shared passageway between the property and the adjoining no. 96 Seaton Road.  All mains services are available (although disconnected), but there is no central heating.    

5.           The house is understood to have been empty for about 15 years, and has fallen into a state of considerable disrepair.  There were several Category 1 hazards (as defined in the Housing Act 2004); the house was considered to be unfit for human habitation and extensive repair, refurbishment and general modernisation was required at the date of acquisition.  

6.           In November 2005 the owner was convicted of failing to comply with a repairs notice served under section 215 of the Town and Country Planning Act 1990 relating to the overgrown gardens.   Following this, the owner was offered an Opening Doors Empty Property Grant to encourage him to affect the necessary repairs, and bring the property up to a standard where it could be let in the open market.  The owner did not respond to that opportunity, or to subsequent attempts by the council to negotiate an acquisition by agreement.   In wishing to see the property returned to beneficial use in accordance with the council’s Housing Strategy 2008, the council made the CPO which was confirmed on 6 April 2010.  

Evidence

7.           Mr Preston has over 30 years experience in the valuation of residential and commercial property in Yorkshire, and produced a report setting out the steps that had been taken to try enforce the owner to bring the property back into a habitable state, to compulsorily acquire it when he failed to do so, and subsequently to sell it in the open market.  Following some previous attempts to gain access to the property, for the purposes of providing valuation advice to the council, Mr Preston said he eventually carried out an internal and external inspection on 11 November 2008, access having been gained under the provisions of section 15 of the Housing, (Miscellaneous Provisions) Act 1976.  At the same time, a Schedule of Condition and Repairs was undertaken by Mr Ian Adams MRICS of UKBS Plc, who provided advice to the council’s Private Sector Housing Team relating to the works and minimum costs required to put the property into repair.   The estimated cost, including fees, was £28,416.41. 

8.           Mr Preston said that, in arriving at his opinion of value, he allowed additional sums for installing central heating, upgrading the bathroom to a better standard, general redecoration and an element of profit.  He then gathered evidence as to comparable values from local estate agents, media publications and web sites, and the council’s own records.  Similar properties in habitable condition were selling in the range £86,250 to £130,000 with a significant number between £115,000 and £120,000.  He concluded that the open market value of the property at November 2008 was £62,500.  He said that although by then contact had been re-established with Mr Denby, and an offer was made to him in the sum of £60,000 at a meeting on 23 February 2009, that offer was not responded to and thereafter contact was again lost.  

9.           The property eventually vested in the council on 19 July 2010, and Mr Preston said he carried out a revised valuation based upon comparable sales at that time, and during the previous 11 months.   He also updated the repairs and improvements schedule which showed an overall cost of repair in the region of £48,500.   Based upon an estimate of value of the property in good order of £105,000, this produced a net valuation of £56,432.   Mr Preston said that he then prepared a marketing report for the council recommending that it should be offered for sale by formal tender, and marketing particulars were produced.   The house was advertised widely, and bids were sought by noon on 27 October 2010.  One of the main provisos was that the purchaser should be in a position to bring the property into a habitable state of repair by 28 February 2011.

10.        Ten bids were received, the highest offer of £68,000 was accepted and keys were handed to the purchaser on 12 November 2010.   Mr Preston said that the price obtained was in excess of the valuation prepared at the date of vesting, despite the ongoing difficulties in the market.

Conclusions     

11.        Having considered Mr Preston’s report, his analysis of comparable transactions and, particularly his revised schedule of repairs prepared in July 2010 I am inclined to the view that these were overestimated, particularly as he had allowed for a 15% contingency and 25% profit on costs.   In my view, his valuation at November 2008 was probably closer to the mark, and this is supported by the price achieved after the property was fully marketed only a short time after the valuation date.

12.        In the light of this evidence, I conclude that the open market value of the freehold interest in 98 Seaton Road, Hessle as at 19 July 2010 can be fairly represented in the sum of £65,000, and determine compensation in this sum.

                                                DATED 11 February 2011

                                                P R Francis FRICS