DESCRIPTIVE RUBRIC

Disputed compensation – compulsory purchase – tenement flats in dilapidated condition acquired to facilitate repair and refurbishment of building – outstanding debts from earlier statutory scheme of repair – Land Compensation ( Scotland ) Act 1963

Tofalis v City of Glasgow Council
18 June 2002
LTS/COMP/1999/2 and 3

The subjects comprised two vacant flats in tenement property at 99/101 Hill Street, Glasgow. In common with the other flats in the building, the subjects were in a dilapidated condition. The building in which the flats were located formed part of an A listed terrace in a conservation area. There was an extant closing order in respect of one of the two subject flats.

In order to facilitate the repair and refurbishment of the building a Housing CPO was promoted in 1990 in respect of four flats which were not owner-occupied, including the two subject flats. The acquiring authority entered into possession in 1993, on the basis that substantial repair grants would be available.

Compensation of £80,000 and £60,000 was claimed in respect of the two flats, the parties agreed that such figures represented the open market value of the flats in a refurbished condition. The acquiring authority contended for the nominal sums of £1000 which the District Valuer had offered in respect of each of the two flats.

There were two main issues in dispute. Firstly, there was the question as to whether, at the time of entry in 1993, it was guaranteed or near certain that substantial grants for improvements or refurbishment would have been paid in the “No-Scheme World”. Secondly, there was the issue as to whether outstanding debts from an earlier statutory scheme of repair should be deducted from the valuations.

Held There was no guarantee or near certainty that grants would have been forthcoming and such doubts would have been reflected in any informed offers to purchase.The Tribunal found that the outstanding debts from a previous statutory scheme of repair should be deducted from any valuation. The outstanding debts on the two flats of approximately £20,000 and £17,000 exceeded the residual value of the flats, having regard to the cost of essential repair and refurbishment and the poor prospects that grants would have been awarded for repair and improvements.

Authorities referred to:-

Fowler v Sheffield Corporation (1960) IL pe C.R.440, particularly at 441-443.
Melwood Units Proprietary Ltd. v Commissioner of Mains Roads (1979 )A.C.426 at 434C-D, 435D-E.
Coray v Glasgow District Council 1980 SLT (Lands Tr.)7 at p10.
Milner v Glasgow District Council 1990 SLT 361 at 364E,K
Cripps, Compulsory Acquisition of Land, 11th Edition, paras 4-185-191.


See full decision:  LTS/COMP/1999/2 and 3