Compulsory purchase has been taking place in Ireland for a long time and was used extensively in then last Century for the construction of the railway system. Nowadays compulsory purchase occurs mostly in road and motorway schemes, as well as in water and drainage schemes. This article discusses the issues which those dealing in the area of compulsory purchase in roads and motorway schemes may encounter a different level of compensation may apply if the acquisition is by a local authority for roads improvement purposes when compared with an acquisition by a government department for some other purpose, County Councils, very often as agents, in the case of road schemes, wit the National Roads Authority.

The basic principle of Compulsory Purchase compensation is that of financial equality. At the end of the process the claimant should, insofar as money can achieve this, be in the same position financially as if the land had not been taken from him.

The main compensation elements are for:

1. Land taken over by the County Council;

2. Injurious affection and severance; this is the reduction in value of an owner's retained land left over after the compulsory acquisition, whereby this evaluation arises as a result of the compulsory acquisition of his land;

3. Disturbance; this is the loss suffered as a result of the interruption to business or domestic activities, again subject to the loss being caused by the compulsory acquisition of an individual's property and not the compulsory purchase of someone else's property.

No compensation is payable to a claimant if no land is acquired from him or her and if no legal interest in interfered with.

Land taken in the basis of compensation is open market value - what price would the property have fetched it if was sold on the open market at the valuation date?

Most acquisitions by local authorities use the provisions of the Housing Act 1966. This Act provides that the date of the Notice to Treat is the date on which the property value has to be assessed. In a rising market it is most important that one presses ahead with the arbitration as the date of the Notice to Treat (valuation date) may very well pre-date by a considerable number of months the date on which the actual compensation is actually received. The valuation date is obviously a crucial issue.

Injurious Affection and Severance

The compensation entitlement is to the de-valuation of the remaining property not compulsorily acquired caused by;

a) Loss of the land acquired by compulsory purchase; and

b) The use to which the acquired land is put.

It is important to note that there is no entitlement to compensation for devaluation arising as a result of what happens on land acquired from a neighbour.

Disturbance

The compensation entitlement is to losses and expenses arising from interruption to domestic and business activities caused by

a) The loss of land acquired by compulsory purchase;

b) The construction of the works and their subsequent use on the land acquired; and

c) The basis of valuation is the actual or forecast losses and expenses.

It is important to note that the owner is only entitled to compensation caused by what happens to the land taken from him.

Other matters to be considered are:

a) Elements of the claim must be consistent;

b) Betterment;

c) Ignoring the scheme.The need to ignore the underlying scheme when assessing the compensation for the land being acquired is a fundamental principal of compulsory purchase, yet it is a requirement that can give rise to the greatest difficulties.

Conclusions

Compulsory purchase can be a protracted business with complex evaluation rules. In times of rapidly rising property values, such as now, claimants can lose out on account of the valuation date being fixed as the Notice to Treat date. Compulsory purchase claims take time to negotiate and sometimes many months can elapse before the claimant actually receives the money by which time he/she may find it more expensive to purchase a replacement property. Great diligence is required by your solicitor in pressing ahead with the claim for compensation with due diligence, to maximize the value of the money Received.

Finally, the importance of expert professional advice cannot be overestimated. The valuation issues are often complex and in the current buoyant market conditions it is vital to ensure full loss of value is claimed.

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