Compensation – Compulsory Purchase – Attic flat of tenement – Poor condition and uninhabitable – Residual method of valuation – Comparative evidence – Treatment of outstanding common repairs – End adjustment – Negotiation expenses – Land Compensation (Scotland) Act 1963, S. 12, Rule 2
The subjects were the attic floor of a tenement. The building and lower flats had been upgraded some years previously. The subjects had been 2 flats but had had partitions, internal walls, etc. removed with a view to upgrading as one flat. The valuation evidence included a recent sale price of one of the flats below, various transactions and asking prices of flats in the area, competing contentions as to the likely cost of repair and upgrading and the extent of grant for such works. The subjects had also recently been exposed for sale in their existing condition. The District Valuer’s approach, applying a residual method of valuation, was not seriously contested. The applicant professed some experience and did not provide any independent opinion evidence.
Held, (1) the subjects should be valued at the valuation date at £30,000. There being an insufficiency of directly comparable sales of other property in similar condition, the adjusted sale value of a previously refurbished flat within the same tenement provided a relevant and useful comparison. A purchaser would require to form a view of the costs involved in refurbishment and also consider the issue of available grant assistance. The credibility and reliability of the applicant, whose relevant involvement in this field was considerably less than he had originally suggested, were in doubt. The District Valuer’s refurbishment cost, and his assessment of the percentage of maximum grant payable, were preferred. The District Valuer’s treatment (in the course of making the adjustments necessary in the comparison with the sale price of the lower flat) of the share of common repair costs, outstanding at both the valuation date and the date of sale of the lower flat, was, however, not accepted, as it resulted in his failure to give allowance for the likely higher standard of a more modern refurbishment. These considerations led to a figure of £32,000 compared to the District Valuer’s £28,000. However, on a ‘stand back and look’ basis, and bearing in mind the (lower) subsequent best offer for the subjects in their existing condition, an end adjustment of £2,000 bringing the value to £30,000 was appropriate.
(2) The claim for negotiation expenses rested on certain negotiation by the applicant’s wife, who was not professionally qualified. On a very broad judgment on the limited material, a sum of £150 was appropriate.
See full decision: LTS/COMP/2006/21