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£89,000 Paid for Chip Shop Compulsory Purchase

Published: 06 October 2013, in categories: Legal Updates | Commercial Property Updates | News and Updates

£89,000 Paid for Chip Shop Compulsory Purchase

chipIn a telling example of the bitter disputes that can arise from the exercise by local authorities of compulsory purchase powers, a couple who sought over £320,000 compensation following the acquisition of their fish-and-chip shop to make way for a regeneration scheme will have to make do with less than £90,000.

The couple had hotly resisted the compulsory purchase of their property which was nevertheless eventually acquired, along with 520 others, by Manchester City Council as part of a project to construct 430 new homes and a revamped street lay-out in what was perceived as a run-down area.

The 19th Century, two-storey, end-of-terrace, property, had a fish-and-chip shop on the ground floor with living accommodation above. Attempts to reach a voluntary deal had proved fruitless and the property was compulsorily purchased in June, 2009. The couple had remained in the property, rent-free, for almost two years thereafter and a sheriff eventually had to take possession of the premises.

In referring the case to the Lands Chamber of the Upper Tribunal (UT), the couple argued that their compensation should be assessed at more than £320,000. Insisting that council offers were derisory and did not reflect their true loss, they sought, amongst other things, substantial sums in respect of lost rent and replacement cooking equipment, fixtures and fittings, on a new-for-old basis.

However, the council submitted that a chartered surveyor it had instructed to look into the matter had properly valued the property at £65,000 by reference to comparable buildings sold in the area at the time. It was unreasonable to expect the council to replace old equipment with new and compensation for such items, and any disturbance the couple had suffered, should be limited to £8,000. A further £17,000 was offered by the council in respect of other losses, less a £1,100 deduction to cover the cost of bailiffs taking possession of the property.

Accepting the council’s figures and limiting the couple compensation to £89,250, the UT was satisfied that the council’s offers had been ‘if anything, generous’. The surveyor had undertaken a comprehensive exercise to research the value of the premises and his conclusions were both sound and fair.

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