The Upper Tribunal (Land Chamber) recently confirmed in the case of Mehnrunnisa Alikhan Ahmed Khan v Wolverhampton City Council that the proper valuation day for assessing compulsory purchase compensation is the date the property vests in the local authority. Notwithstanding this however, the tribunal preferred a valuation figure which was calculated closer in time to the date the general vesting declaration (GVD) was made – resulting in a higher payment to the claimant.
This article examines a recent Upper Tribunal decision in the Mehnrunnisa Alikhan Ahmed Khan v Wolverhampton City Council case. It also explores the case facts, key legal issues, and practical lessons for property owners facing compulsory purchase order proceedings.
The case arose after a three-bedroom semi-detached house in Wednesbury was compulsorily acquired by the local authority following a GVD.
The property had first been brought to the attention of the local authority in 2016 as a vacant property in poor condition and with a vermin infestation. The local authority obtained a warrant to enter the property and carry out removal of refuse, cleansing, and pest control works in 2017 – during which the claimant alleges the local authority removed items of value. As the property remained vacant, the local authority proceeded to make a compulsory purchase order in 2019. The claimant was the sole objector at a public inquiry in late 2021, following which the order was confirmed.
The GVD was made on 28 April 2022, and a letter notifying the claimant of the same was made on 29 April 2022. The local authority appeared to believe at the time that the valuation date should immediately follow the GVD, and as such prepared a 'compensation value' report assessing the market value of the property at 29 April 2022 in the sum of £150,000.
The parties were unable to agree the compensation due to the claimant, as she continued to allege that items of value were removed during the 2017 works – for which she also required compensation. The local authority disputed this allegation, and stated that no list of items or evidence was provided of this assertion.
As such, the local authority made a reference to the tribunal for determination of compensation under section 1 of the Lands Compensation Act 1961. The local authority sought determination for the value of the property in the sum of £150,000 and any items alleged to have been taken from the property. Upon being directed to file expert evidence of their valuation by the Tribunal, the local authority produced a second report in 2025 – which, utilising the assumed vesting date three months after the owner was assumed to have received notice of 2 August 2022, valued the property at just £120,000.
The fundamental question in the case was the proper date for valuation of the property. Two valuations were made – the first made contemporaneously and immediately after the GVD was made on 29 April 2022, and the second made in 2025 during the tribunal proceedings, with reference to the assumed vesting date three months after the owner was assumed to have received notice on 2 August 2022. There was a significant difference in the value of the properties – with the April valuation putting the overall value of the property at £150,000 and the August valuation putting the value of the property at £120,000.
Section 5 of the Land Compensation Act 1961, which sets out the rules for the assessment of compensation, was relevant to the tribunal’s assessment of compensation – as well as it’s discussion around disturbance compensation:
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"(1) No allowance shall be made on account of the acquisition being compulsory: (2) The value of land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise: ... (6) The provisions of rule (2) shall not affect the assessment of compensation for disturbance or any other matter not directly based on the value of land." |
Section 33A of the Land Compensation Act 1973 was not ultimately relevant in this case, but was briefly countenanced by the court with reference to a prospective basic loss claim:
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“(1) This section applies to a person— (a) if he has a qualifying interest in land, (b) if the interest is acquired compulsorily, and (c) to the extent that he is not entitled to a home loss payment in respect of any part of the interest. (2) A person to whom this section applies is entitled to payment of whichever is the lower of the following amounts— (a) 7.5% of the value of his interest; (b) £75,000. (3) A payment under this section must be made by the acquiring authority.” |
The tribunal confirmed that the correct date for valuation was indeed the assumed vesting date on 2 August. However, the tribunal found that “it would be surprising if the market value of the property had fallen from £150,000 to £120,000 over that short period” and rationalised the difference between the reports by reference to a number of factors – including the fact that the second report had not included the garage within the square footage, and the different comparative properties which were used.
The local authority had made no submissions that that the later valuation should be preferred to the earlier valuation they had actually used for the basis of their negotiations with the claimant. The claimant themselves did not participate in the hearing.
Thus, ultimately the tribunal was “inclined to give more weight to a valuation made close to the valuation date, in the knowledge of market conditions prevailing at the time, than to one made nearly three years later” – and therefore settled on a compensation value of £150,000.
The tribunal also briefly considered the allegation by the claimant that items of value were removed during the 2017 works. Although the local authority submitted a witness statement from the contractor responsible for house clearance when they took possession in 2022, the tribunal noted that they did not deal specifically with the allegation about items removed in 2017. Nevertheless, as the claimant did not participate in the proceedings, the tribunal considered it had nothing from the claimant to explain precisely what items were alleged to be taken.
Furthermore, any earlier intervention would not amount to disturbance caused by the compulsory acquisition in August 2022. As such, the tribunal considered that this consideration fell outside of its jurisdiction and it was unable to determine any compensation due under such a heading.
The tribunal also briefly noted that it was open for the claimant to bring a claim for basic loss at 7.5% of the value of her interest under section 33A of the Land Compensation Act. However, as no such claim had been made, the tribunal could make no such award.
Thus, although the court did prefer the higher valuation made in 2022, the case is an important reminder of the important of seeking legal advice if property you own is subject to compulsory purchase proceedings. It appears from these comments from the tribunal that additional compensation may have been recoverable by the claimant if she had more fully participated in the proceedings.
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