The Top Facts You Should Know about Compensation for a Compulsory Purchase Order

The Top Facts You Should Know about Compensation for a Compulsory Purchase Order

There is no doubt that the laws and regulations surrounding the compulsory purchase of property are complicated. An ordinary individual may not fully understand its scope and consequences and may therefore not be aware of their rights. The good news is that if your land is affected by a CPO, you have the option to seek help and advice from a property expert. But it also pays to know more about the compensation for a CPO if you are a residential landowner. Here are the top facts.

The basics

The first fact you should be aware of is that compensation after a CPO depends on the equivalence principle. This essentially means that after the land acquisition, you should be no better off financially – and you should not be worse off financially either. In the compensation process, the land’s value will be assessed based on its value on the open market, without any decrease or increase which can be attributed to the development scheme for the CPO.

The compensation assessment’s date of valuation can be the date when the authority takes the land without any notice for the ‘treat procedure’, or it can also be the date the land’s title is vested in the authority once the general declaration for vesting has been followed. The date of valuation can also be the date when the values have been agreed upon, or it can also be the date when the Land Tribunal makes its decision.

The categories of compensation

Based on the circumstances surrounding the case, the compensation may be claimed through various categories. These categories are also called the ‘Heads of claim’. These categories include the value of the taken property or land; the ‘injurious affection or severance’ (which refers to the depreciation in your land’s value if only a portion of your land is acquired); the disturbance, which is available to the property’s occupiers and covers the losses and expenses incurred by the occupiers as a consequence of being ‘disturbed’ in their property occupation; and fees, which refer to the fees of the surveyor which you have incurred in the preparation and negotiation of a settlement for compensation, and this also comes with other fees such as solicitors’ fees.

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The actual compensation for the land

When it comes to the actual compensation for the land: when you have land where there is a general demand or market, the compensation will depend on the land’s market value. If, however, you have land which may be considered unique, specialised, or unusual and which has no general demand or market, your compensation may depend on the cost of the property’s ‘equivalent reinstatement’. Fortunately, if you are a residential landowner, the ‘equivalent reinstatement’ assessment for compensation is quite rare. Chances are, your land’s compensation will be based on its market value.

When it comes to Compulsory Purchase Compensation, it would be in your best interest to seek help and recommendations from a property expert who is also well-versed in the entire Compulsory Purchase Order process. The acquisition of your property under a CPO can be quite complex, and you need to know the right amount of compensation that is due you so that you can truly benefit from it in the end.


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