Claim for Compensation for the Freeholder - Case Study Example

Claim for Compensation for the freeholder The claim This document serves as a compensation claim prepared on behalf of freeholder of an end of terrace shop with upper parts in London. While acting for the freeholder whose property has faced compulsory acquisition, this document gives means in which the client will best safeguard their interests. For the acquiring body, we will employ a proactive approach accordingly and where it is in the best interest of the freeholders. As such, we would like to negotiate the compulsory purchase of the property by law and mention the improved market value of the property in order to best ascertain the resulting compensation for the freeholders. However, we acknowledge that the adoption of compulsory purchase law will come with the right for people whose property interests may be affected by the claim compensation. Given that the shop was let to the Smiths Minimarket; the first floor leased out for 125 years; and the advert hoarding at the ground floor let out at an annual license, the freeholders are justified to receive £ 334,800 compensation. Supporting Evidence From the available records, the shop was let to Smiths Minimarket on an FRI basis for 15 years from 25.12.2011 at a cost of £ 20,000 per year though subject to a rent review every 3 years. It is evidence the shop`s first floor flat was leased out for 125 years from 25.12.2008 for a rent of £ 200 per year. It is also well-known that portion of the shop, particularly at ground floor, had an advert hoarding let at £ 5,000 per year though on annual license. We learnt that the planning consent was not renewed, actually from the time it was given for 3 years, years ago. Moreover, the freeholder receives £ 50 every Friday evening from Mrs. Jones who has a chip and fish van that occupy the shop from the side of forecourt. It is said this agreement was held on a license that was stated to run for two years. In addition to all these, the freeholder revealed that £ 100 is paid per sale by Mr Youens for casual sale of second-hand cars that occupy the three places on front forecourt of the shop. Review of the statue and law A good number of compulsory purchases are made under laws granted by several general Acts. The Government had walked the talk of its early intention to complement the existing laws by fresh laws which dictates that authorization of compulsory acquisition is given through compulsory purchase order that is created by the acquiring body and affirmed by the appropriate Minister or confirming authority. This order should be in prescribed form and comprises a statement of purpose for which property is required and a description of the property in reference to maps. According to Roots (2011), all those entitled to the service of, or served with, a notice (freeholder) have a right to make representations or object within the specified time in the notice. Other representations or objections may be welcomed by agreement with authority acquiring the property or at the pleasure of the confirming body. Wyatt (2007) stipulates that objections can be ignored if they relate wholly to problems of compensation (pg. 84). Public hearing or inquiry must be done for the objections. In an attempt to assist with freeholder claims for compensation in connection to the shop taken as a result of Compulsory Purchase, our involvement will be subject to the directives from the lawyers that are acting for the freeholder or the acquiring body. We can give forensic bookkeeping consultancy services at each stage of the claim, including contracts, negotiations, mediation, and special witness services in case the matter goes to Lands Chamber of Upper Tribunal. The shop operated on the city epicenter land that became the target of the compulsory purchase order. This assessment therefore, claims for the loss of profits that the freeholder might have suffered. The claim is against the occupants and the acquiring authority of this local shopping center in London for business disruption to the freeholder’s resident trading unit occasioned by the compulsory purchase order. The valuation of loss of profits, which is claimed by the freeholder of an end of terrace shop with upper parts in London, amounted to £ 334,800 from the evidence previously presented above. The claim is also in line with the temporary gain made by the occupants due to the lease obligations that were granted to them some years back. Normally, once the acquiring body takes possession of the property, the freeholders who used to be interested in it are eligible for compensation from the acquiring body. As such, one may be entitled to compensation in a bid to take him back his previous financial position before the acquiring body purchased the property under the compulsory purchase order. The acquiring body will request him to claim for compensation and mostly negotiate with him on the sum of compensation he is entitled to. Once they (he and the acquiring body) reach a consensus, the acquiring body will pay him the compensation. Selling assets in regard to a compulsory purchase order might mean that one has to pay over heads such as costs associated with moving and expert fees (Cheshire, Stuart, Seddon, Ellinghaus & Fifoot’s Law of Contract, 2008). One might be in a position to claim back their reasonable costs. This might comprise reasonable expenses related to buying or letting another property (but then not the value of the assets or the rent itself) and reasonable expenses of shifting to and making adjustments to that new property. The acquiring body is therefore entitled to give notice of entry in accordance to either all or part of that particular property, and therefore to take ownership of the whole or of that part of the plot as is indicated in the notice. According to Alexander v Cambridge Credit Corporation Ltd (1987), to recover the loss of profit, it must be viewed as arising logically from the breach and it must be seen within the rational contemplation of two parties as the possible outcome of a breach during the signing of contract. Loss under the first limb arises logically in the typical course of stuffs as the probable outcome of the breach. As such, in launching the second limb freeholder demonstrated that the respondent knew or should have recognized that such loss of profit would be a possible outcome of the breach. A significant matter in determining whether the loss of profit is so far-off is the level to which the two parties can be considered to have reflected the activities giving rise to the loss of profit. The acquiring party must contemplate the degree of the loss of profit suffered and proceed to compensate the freeholder. It is satisfactory that it contemplate the type of loss of profit suffered. In line with the second causation component above and in ascertaining the causal association between the loss of profit suffered and the breach of contract, freeholder proved that the breach indeed was the cause of their loss. Nonetheless, it is inappropriate to ask whether the respondents’ default was the leading, effective or real source of the freeholder’s loss (Great Britain, 2006, pg. 73). However, we recognize that embracing the compulsory purchase law will come with the right for persons whose property interests might be affected by the claim compensation. But then, given that the shop was let to the Smiths Minimarket; the first floor leased out for 125 years; and the advert hoarding at the ground floor let out at an annual license, the freeholders are justified to receive £ 334,800 compensation. Reference list Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310 at 365–6 ; (1987) 12 ACLR 202 at 254; 254 ALR 273 at 282. Compulsory Purchase of Land Regulations 1994, SI 1994, No 2145. Procedure at inquiries held under the Act is governed by rules made under the Tribunals and Inquiries Act 1971. G C Cheshire, Fifoot, C H Stuart, N Seddon and M P Ellinghaus, Cheshire and Fifoot’s Law of Contract, 9th Australian ed, LexisNexis Butterworths, Sydney, 2008 at [23.34]). Great Britain. 2006. Compensation culture: Third report of Session 2005-06. London: Stationery Office. Roots, G. 2011. The law of compulsory purchase. Haywards Heath, West Sussex: Bloomsbury Professional. The Compulsory Purchase by Non-Ministerial Acquiring Authorities (Inquiries Procedure) Rules 1990, SI 1990, No 512 Wyatt, P. 2007. Property valuation in an economic context. Oxford: Blackwell Pub. Read More