Anyone suffered a 50% loss as a result of C.P.O. ?

R

rabbit

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Has anyone had a property which was acquired by the local authority / council by compulsory acquisition ? This could have been for road widening or whatever. If so, what is peoples experience of how much money they lost / how much inconvenience and disruption they suffered.

I know of one property , measuring x thousand square feet, near a large town centre , which was compulsory acquired by the local authority in 2004. An identical size development site - x thousand square feet as well -came up for sale at the same time, right next door and adjoining the property which was acquired. It was sold at public auction in 2004, literally a few months after the Borough council moved on site and acquired the CPO'd property. The underbidder at the public auction was actually the valuer for the local authority which CPO'd the property next door. How much do you think the property owner got for the CPO'd property ? He expected - and had made major investment decisions based on that expectation, which was assured by his valuer and solicitor at the time - that he would get at least per sq. foot the same as the identical size property next door sold for. What did he actually get for the property which was acquired by CPO ? Only about half per sq. foot what the property next door sold for. The overall figure was also half as the property was the same size. When did he get it - less than 12 months ago, in Spring 2007....after several years of trouble and meetings with solicitors, engineers etc The property owner thought he would get better treatment. Not very fair was it ? Anyone else know of similar experience ? The property owner wanted to highlight the case in the media but was warned by a valuer not to, that the local authorities have long memories etc This was taken to believe that further discrimination could take place in the future with regard to planning permission, rates etc.
 
it maybe that his valuer was not up to the job. There are many valuers that specialise in C.P.O. work -- some of the very large firms. It maybe to late now, but could be worth a try, or otherwise there might be a case for negligence from the valuer that was actually used.
 
mercman said:
it maybe that his valuer was not up to the job. There are many valuers that specialise in C.P.O. work -- some of the very large firms. It maybe to late now, but could be worth a try, or otherwise there might be a case for negligence from the valuer that was actually used.
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Thanks for that. The original valuer ( used by the ower of the CPO'd property ) was from one of the biggest firms in the country, a well known household name type firm. The valuer did however since leave her job with that firm ( following complaints by the client ) and is now working in a teaching establishment. A solicitor has been asked about taking a case against the valuers, but after 6 months of being fobbed off ( a barrister is being contacted for their opinion - they are on holidays etc ) , nothing has happened.
 
This is lunacy. How many posts have i made on AAM about the inadequacies of some of the legal profession. Simple as this -- the solicitor involved can either handle the case or not. Iam unaware of the location or size of the matters you are referring to. However it must be pointed out that many valuers undertake work for Councils and private clients which in my opinion is a Conflict of Interest. Find a decent legal firm and a proper Valuer who is independent.
 
The facts outlined by Rabbit do not necessarily indicate negligence on anybody's part. Here is why:

1. The price on CPO land is the value at a set date.

2. From once this date is set, the landowner is free to immediately have the valuation referred to a formal arbitration. The problem with arbitration is that you run the risk of having to pay legal costs if you are not awarded more than they offer.

3. An alternative is the extra-statutory 'assessment' procedure agreed with the IFA, which is like an arbitration but non-binding and carries less of a legal costs risk.

4. If, instead of immediate arbitration, you go down the road of negotiation and\or assessment, 12 or 18 months can very easily pass.

5. If this happened during a period of rapid price increases (which we had from 2002-2007) it could very easily happen that you would close a CPO deal on one property and an adjoining property might make double that money within a short period of the closing of the first deal (but NOT a short few months from the date on which the CPO value is to be established).

The delays between the date from which value is set and the date on which property is ultimately paid for are certainly annoying - but that is not usually the fault of the landowner's advisers - it is just a systemic problem.

I am not an expert on CPO law - I have done a reasonable amount of work in this area, and my comments are certainly open to correction.
 
MOB the OP stated that the events took place in 2004, with very little time difference and that which was used as comparison
 
MOB said:
1. The price on CPO land is the value at a set date.
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Correct. That date is referred to as the " notice to enter" or "notice to treat date", I forget which at the moment. In the particular case referred to above, that date was in 2003, just over a year before auction of the site next door. However, there was no other property transactions in the vicinity during 2003 / 2004, and the property owner was told by his legal adviser and valuer that the auction next door would more or less set the price for the cpo claim. In fact they advised not submitting the claim until after the results of the auction, so they would know how to value the claim. The property owner of the cpo'd property bought the property next door as he wanted to have the same amount of land pre cpo compared to post cpo. Now he is left with a seven figure bank loan, something he never had in his life before.
 
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