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Negotiating a way across the road

The impact of a new road needs careful consideration when compulsory purchase compensation is being negotiated. Chris Addison-Scott and Annie Lane report on the heads of claim taken into account for the A737 Dalry Bypass.

CKD Galbraith has been working for several years as agents for the principal landowner affected by the A737 Dalry Bypass scheme.

The land required for the scheme has been subject to a Compulsory Purchase Order and was vested on April 22, 2016. It is expected that construction work will start in the spring of 2017 and last for approximately 18 months. 

The route of the bypass cuts through two of our client's let farms, both occupied by the same tenant. Most of the area of each farm is subject to a secure tenancy under the Agricultural Holdings Act 1991.

However, our client took the opportunity a number of years ago to resume land from the tenancy, roughly on the line of the future bypass, which was then let to the tenant under a seasonal grazing agreement.

For valuation purposes this means the land is almost equivalent to land with vacant possession, therefore the value of the land taken and consequently compensation paid to the landowner will be greater. The confirmed route of the bypass varies slightly from that which the landowner predicted when the land for resumed but it is considered that our client acted in good time to mitigate his losses based on the information available at the time. Other land taken is still subject to tenancy and that is reflected in the value as a discount to vacant possession.

An advance payment of compensation of 90% has been agreed based on the value of the land taken, and severance and injurious affection. Further discussions with the district valuer are to be held to negotiate the full claim for compensation. The heads of claim under which the full claim will be made include:

  • Value of land taken
  • Severance - for the purpose of compensation, it has been discussed with the district valuer that the land severed by the new road from the main part of the holding should be compensated at a percentage of its capital value.
  • Injurious affection (grouped with the claim for severance) - including mitigation works.
  • Claim for future maintenance of fencing, for any increased length of fencing required as a result of the scheme. There is the potential to include a further similar claim for damage to land drains.
  • Claim for compensation at waygo - this was an additional head of claim that we advised our client should be included to cover the tenant's claim for compensation for improvements made (including a dairy unit). With the new bypass in place, the land will no longer be viable as a dairy unit and therefore has little value to an incoming tenant. This has arisen as a result of the Amnesty for Tenants' Improvements under the Land Reform Act 2016. However, it could be argued that the improvements made by the current tenant are in effect an over-provision for the size of the holding.
  • Agents' fees.
  • Other heads of claim - it was agreed that the landowners could also lodge a claim for their own time involved in the claim but must keep a diary. For example, meetings with the agent would be claimable.