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Late running judicial process gives rise to HS2 blight

Marketing / 20 Aug, 15

What is the timescale?

The period for submitting petitions against the additional provisions to the High Speed Two (HS2) Hybrid Bill closed on 14 August 2015. Current estimates are that the Bill is likely to be formally approved in late Autumn 2016, and therefore the Powers of Compulsory Acquisition are unlikely to be implemented until early 2017.

Rights to compensation

The assessment of compensation for those affected by the scheme is based on the principle of equivalence, meaning that the Claimant should be in no better nor no worse position than if they had not been affected by the Scheme.

Whilst achieving equivalence can be complex, there is a substantial body of statute and case law to provide guidance, and an expert judicial body in the form of the Upper Tribunal (Lands Chamber) to determine compensation if the parties find themselves in dispute.

Impact on owners and occupiers

The recent election of David Cameron and the Conservative Government has removed any uncertainty as to the delivery of HS2, and completion of the judicial process is some 18 months away.

In the interim, many property owners and occupiers find themselves ‘blighted’ – unable to sell or let their properties, or start the relocation of their business.

A discretionary compensation scheme operated by HS2 does exist, but it is focussed on residential owner occupiers. Owners and occupiers of commercial properties can qualify, but only if the rateable value of their property is less than £34,800, and tenants must have a fixed term lease with a minimum of 3 years remaining.

Landlords have the option of serving a Blight Notice, but to be successful they must satisfy a number of statutory tests, the most limiting being that the rateable value of the property must not exceed £34,800.

Typical owner and/or occupiers who find themselves in a state of ‘blight’ include:

•Tenants of commercial properties – many such parties require certainty and financial stability to facilitate a relocation of their businesses, which may, particularly in the manufacturing sector, take between 1 and 2 years to achieve;

•Landlords of buildings with a rateable value in excess of £34,800, who find they have unmarketable properties which are accruing holding costs, not least empty rates;

•Owners of development sites, particularly ‘brownfield’ housing land – this category is particularly affected in respect of the Birmingham to Manchester and Leeds section, as the final decision with regard to the route has not been made.

Discretionary scheme

HS2 Ltd only has a budget for acquisitions under the discretionary scheme. They are open to discussion with all affected parties and consider exceptional case of hardship, or cases where relocation require an extended period of time. However, each case is considered on its merits and requires ministerial sign off.

The Government and HS2 should be encouraged to reconsider the limitations they have applied to their discretionary compensation scheme with a view to easing the burden on owners and occupiers.

In the interim, if you occupy a property within the safeguarded area and are suffering financial loss as a consequence, you should maintain a detailed record of all events with supporting evidence in order that you have a robust claim for pre-scheme losses for inclusion in the compensation package.

Topics: News

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