Property Blight Compensation Bill (HC Bill 25)

A

BILL

TO

Require the Secretary of State to amend legislation to improve the system of
compensation for property blight caused by major national infrastructure
projects; and for connected purposes.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—

1 Secretary of State to amend legislation

(1) The Secretary of State shall by Order made by Statutory Instrument amend the
legislation relating to compensation in relation to property blight caused by
major national infrastructure projects.

(2) 5In making the Order the Secretary of State shall have regard to the proposed
amendments to legislation contained in the Schedule to this Act but may
depart from them or make further provision where he considers it appropriate
to do so.

(3) No Order may be made under this section unless a draft of the order has been
10laid before and approved by resolution of both Houses of Parliament.

2 Financial provision

There is to be paid out of money provided by Parliament any increase attributable to
this Act in the sums payable under any other Act out of money so provided.

3 Short title, commencement and extent

(1) 15This Act may be cited as the Property Blight Compensation Act 2013.

(2) This Act extends to England and Wales only.

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Section 1

Schedule Proposed amendments to legislation relating to land compensation

1 Part 1 of the Land Compensation Act 1973 (hereafter referred to as “the 1973
Act“) is amended as follows.

5Amendment to title of Part 1 of the 1973 Act

2 (1) The title of Part 1 of the 1973 Act is amended as follows.

(2) After “use of Public Works” insert “or Property Blight”.

Amendment to heading of section 1 of the 1973 Act

3 (1) The heading of section 1 of the 1973 Act is amended as follows.

(2) 10After “compensation” insert “for depreciation caused by use of public
works”.

Right to a property bond for property blight

4 After section 1 of the 1973 Act insert—

1A Right to a property bond for property blight depreciation

(1) 15Where the value of an interest in land is depreciated by property
blight caused by a major national infrastructure project, then if—

(a) the interest qualifies for a property bond; and

(b) he person entitled to the interest makes an application within
the time provided by and otherwise in accordance with this
20Part of this Act,

a property bond for that property blight depreciation shall, subject to
the provisions of this section and Schedule 4 of this Act, be issued by
the promoter of the major national infrastructure project to the
person making the claim (hereafter referred to as “the applicant”).

(2) 25Whether an interest in land qualifies for a property bond is to be
determined in accordance with Schedule 4: Property Bond Scheme
which shall have effect, such Schedule to be inserted after Schedule
3 of the 1973 Act and titled “Schedule 4: Property Bond Scheme”.

(3) The property blight mentioned in subsection (1) above means the
30depreciation in value of an interest in land resulting from blight
factors that are or will be a probable consequence of the construction
or installation of a major national infrastructure project.

(4) The blight factors mentioned in subsection (1) above are noise,
vibration, smell, fumes, smoke, artificial lighting, landscape
35visibility, traffic flows or discharge on to the land of any solid or
liquid substance.

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1B Transfer of property bond

(1) A property bond which has not been redeemed is annexed and
incident to, and shall go with, the estate or interest of any person to
whom the interest in land is disposed, and shall be capable of being
5enforced by every person in whom that estate or interest is (in whole
or in part) for the time being vested.

(2) For the purpose of this Part of this Act, the person in whom the
interest of land is vested following a disposition in accordance with
subsection (1), shall be deemed to be the “applicant” for any relevant
10future disposition for the period of time in which the interest is
vested in them.

1C Property blight caused by temporary works or structures

(1) Where the value of an interest in land is depreciated by property
blight caused by the construction, use or location of temporary
15works or structures directly connected to the major national
infrastructure project, then if—

(a) the interest qualifies for a property bond in accordance with
paragraph 7 of Schedule 4; and

(b) the temporary works or structures are intended to be or have
20been in situ for a period of over 12 months; and

(c) he person entitled to the interest makes an application within
the time provided within subsection (3) below,

a property bond for that property blight depreciation shall be issued
by the promoter of the major national infrastructure project to the
25person making the claim (hereafter also referred to as “the
applicant).

(2) Temporary works or structures directly connected to the major
national infrastructure project shall include work sites or
compounds.

(3) 30The period of time within which the applicant may apply for a
property bond under this section begins with the date on which the
location of the temporary works or structures is confirmed and ends
on the date that they are removed.

(4) Subject to the provisions of this section, an application for a property
35bond under this section shall be determined by the same procedures
and definitions, and operate and have the same effect as a property
bond issued under section 1A and Schedule 4.

(5) The property blight mentioned in subsection (1) means the
depreciation in value of an interest in land resulting from blight
40factors that are or will be a probable consequence of the construction,
use or location of temporary works or structures directly connected
to the major national infrastructure project.

Amendment to section 2 of the 1973 Act

5 (1) Section 2 of the 1973 Act is amended as follows.

(2) 45In section 2(1) after “An interest qualifies for compensation under” insert
“section 1 of”.

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(3) After section 2(1) insert—

(1A) An interest qualifies for a property bond under section 1A or 1C of
this Act if the requirements of subsection (2) or, as the case may be,
subsection (3) below are satisfied on the date on which an application
5for the property bond is served.

Amendment to section 3 of the 1973 Act

6 (1) The heading of section 3 of the 1973 Act is amended as follows.

(2) After “Claims” insert “under section 1”.

Applications under section 1A

7 10After section 3 insert—

3A Applications under section 1A

(1) An application under section 1A is to be determined in accordance
with the rules of the property bond scheme.

(2) An application may only be made within the period of time that—

(a) 15begins on the proposal day; and

(b) ends on the day before the first claim day.

(3) Where an application has been served on the promoter, any qualified
person authorised by that promoter may, on giving reasonable
notice, enter the land to which the application relates for the purpose
20of surveying it and ascertaining its value in connection with the
application; and any person who wilfully obstructs a person in the
exercise of the powers conferred by this subsection shall be guilty of
an offence and liable on summary conviction to a fine not exceeding
level 1 on the standard scale.

(4) 25Where a property bond has been issued there shall be payable by the
promoter any reasonable valuation or legal expenses incurred by the
applicant for the purposes of the preparation and prosecution of the
application; but this subsection is without prejudice to the power of
the Upper Tribunal in respect of the costs of and incidental to
30proceedings in the Upper Tribunal by virtue of section 29 of the
Tribunals, Courts and Enforcement Act 2007.

Amendment to section 4 of the 1973 Act

8 (1) Section 4 of the 1973 Act is amended as follows.

(2) At the end of the heading of section 4 insert “for section 1 claims”.

(3) 35In section 4(1) after “The compensation payable on any claim” insert “made
under section 1”.

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Valuation of an interest in land: general provisions for section 1A claims

9 After section 4 of the 1973 Act insert—

4A Valuation of an interest in land: general provisions for section 1A
applications

(1) 5Where a property bond under section 1A is issued to a person who
was entitled to the interest in land on the proposal day, the value of
the depreciation of that interest that is the subject of the bond shall be
assessed by reference to the open market value of the applicant‘s
interest in land on the day before the proposal day.

(2) 10Where a property bond under section 1A is issued to a person who
has purchased the interest in land at the depreciated purchase price,
the value of any further depreciation of that interest that is the
subject of the further bond shall be assessed by reference to the
depreciated purchase price.

(3) 15The value of the interest in respect of which the application is made
shall be assessed—

(a) subject to subsection (3) below, by reference to the nature of
the interest and the condition of the land as it subsisted on the
date of the application;

(b) 20subject to section 5 below, in accordance with rules (2) to (4)
of the rules set out in section 5 of the Land Compensation Act
1961;

(c) if the interest is subject to a mortgage or to a contract of sale
or to a contract made after the relevant date for the grant of a
25tenancy, as if it were not subject to the mortgage or contract.

(4) In assessing the value of the interest in respect of which the
application is made there shall be left out of account any part of that
value which is attributable to—

(a) any building, or improvement or extension of a building, on
30the land if the building or, as the case may be, the building as
improved or extended, was first occupied after the proposal
day; and

(b) any change in the use of the land made after that date.

Amendment to section 5 of the 1973 Act

10 (1) 35Section 5 of the 1973 Act is amended as follows.

(2) In section 5(1) after “in respect of which the claim” insert “or application
under section 1 or 1A”.

Assessment of value: duty to act fairly

11 After section 5 of the 1973 Act insert—

5A 40Assessment of value: duty to act fairly

(1) The valuation of the depreciation in value of an interest in land
caused by property blight is the value that fairly compensates an
applicant for the loss that applicant has suffered or will suffer, by
reason of the property blight.

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(2) The Secretary of State must publish a code of conduct on the fair
assessment of value consistent with the duty to act fairly set out in
subsection (1).

(3) In this Part of this Act “code of conduct” means the code of conduct
5published under this section as it is in force for the time being.

(4) The Secretary of State must lay the code of conduct before
Parliament.

(5) Promoters shall have due regard to the code of conduct at all stages
of the major national infrastructure project.

10Amendment to section 8 of the 1973 Act

12 (1) Section 8 of the 1973 Act is amended as follows.

(2) In section 8(1) after “Where a claim” insert “under section 1”.

Amendment to section 15 of the 1973 Act

13 (1) Section 15 of the 1973 Act is amended as follows.

(2) 15After section 15(2) insert—

(2A) The promoter in relation to a major national infrastructure project
must keep a record and, on demand, furnish a statement in writing
of the date of the proposal day.

Amendment to section 16 of the 1973 Act

14 (1) 20Section 16 of the 1973 Act is amended as follows.

(2) In section 16(1) after “Any question of disputed compensation” insert “or
disputes arising from a property bond”.

(3)
In section 16(2) after “No such question arising out of a claim” insert “under
section 1”.

25Amendment to section 19 of the 1973 Act

15 In section 19 of the 1973 Act insert at the appropriate place—

  • ““depreciated purchase price” means in relation to the sale of a
    property where a property bond has been issued and redeemed, the
    reduced price paid for that interest in land as a result of property
    30blight;

  • “major national infrastructure project” has the same meaning as
    “nationally significant infrastructure project” in Part 3 of the
    Planning Act 2008;

  • “promoter” means the company, organisation, Government
    35department or responsible authority that has overall responsibility
    for developing and promoting the major national infrastructure
    project;

  • “proposal day” means in relation to the major national infrastructure
    project the date on which—

    (a)

    40the initial infrastructure plan or any subsequent amendment
    is proposed;

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    (b)

    a planning application is submitted; or

    (c)

    where (a) and (b) above are not applicable: formal plans,
    proposals or maps are proposed which provide sufficient
    detail for the preferred location to be clearly identified;

  • 5“the 1973 Act” means the Land Compensation Act 1973;

  • “traffic flows” means the additional traffic arising from construction
    work, road diversions or otherwise in direct connection with the
    major national infrastructure project.”

Orders and regulations

16 10After section 19 of the 1973 Act insert—

19A Orders and regulations

(1) Any power to make an order under Schedule 4 of this Act is
exercisable by statutory instrument.

(2) A statutory instrument containing an order under Schedule 4 of this
15Act may not be made unless a draft of the instrument has been laid
before and approved by a resolution of each House of Parliament.

Schedule: Property Bond Scheme

17 After Schedule 3 of the 1973 Act there is inserted—

Schedule 4 Property Bond Scheme

20General details

1 This Schedule shall have effect.

2 The Secretary of State must establish a property bond scheme,
which is to be referred to as the “Property Bond Scheme”.

3 A bond issued under the Property Bond Scheme is to be referred
25to as a “property bond”.

4 The Secretary of State must by order publish and maintain rules
for the operation of the Property Bond Scheme, which shall
include—

(a) the contents, submission and service of an application;

(b) 30disclosure of documents;

(c) providing evidence of open market value;

(d) the setting, collection and payment of any fees;

(e) an independent process for assessing and reaching
agreement on the open market value of the interest in land;

(f) 35registration of an application for, or of a property bond;

(g) the valuation evidence to be provided upon disposition of
an interest in land in accordance with paragraph (18)
below;

(h) an independent process for assessing and reaching
40agreement on the redemption value of the property bond;

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(i) payment by the promoter upon redemption of a property
bond;

(j) the creation of any standard forms.

5 A property bond is a bond between the promoter of the major
5national infrastructure project and an applicant under the terms of
which the promoter agrees to indemnify the applicant against any
depreciation in value of the applicant’s interest in land as a result
of property blight from—

(a) upon first application for a property bond by a person
10entitled to the interest in land on the proposal day, the
agreed open market value of that interest; or

(b) upon application for a further property bond by a person
entitled to the interest in land following sale of that interest
to them and redemption of a property bond, the
15depreciated purchase price.

6 The date in relation to which the open market value shall be
assessed is—

(a) under section 1A the day before the proposal day; or

(b) under section 1C the day before the location of the
20temporary works or structures is confirmed.

7 An interest in land qualifies for the issuing of a property bond if—

(a) the application is made within the time limits in
accordance with section 1C or 3A;

(b) it falls within a geographical area affected by blight as
25depicted on the amalgamated blight map;

(c) the applicant provides proof of the open market-value on
the day before the proposal day or the depreciated
purchase price;

(d) the application complies with all relevant rules of the
30Property Bond Scheme.

Amalgamated blight map

8 The Promoter of any nationally significant major infrastructure
project shall on the proposal day publish an amalgamated blight
map.

9 35The amalgamated blight map must show the geographical area
that will be affected by blight factors (including as a result of
temporary works or structures), in accordance with paragraph
(11) below.

10 Where the blight factor of noise is applicable to the major national
40infrastructure project, the exposure to noise is to be measured and
depicted on the amalgamated blight map in accordance with the
Environmental Noise (England) Regulations 2006, Regulation 4
and Schedule 2: Assessment methods for the noise indicators.

11 The Secretary of State must for each nationally significant major
45infrastructure project—

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(a) set the levels for which each property blight factor should
be deemed to be at a level at which property bonds should
be granted; and

(b) set the boundaries of the blight factors on the amalgamated
5blight map for that project in accordance with that
decision.

12 The promoter must keep the amalgamated blight map up to date,
and must refer the map back to the Secretary of State where
further decisions under paragraph (11) are necessary.

13 10The Secretary of State must by order establish a mechanism for
appeals by applicants against the amalgamated blight map on
issues affecting an individual property.

Application

14 An application for a property bond must be served on the
15promoter.

15 The promoter shall within 21 days of service of the application
inform an applicant that it—

a (a) agrees with the open market value or depreciated
purchase price as set out in the application; or

(b) 20disagrees with the open market value as set out in the
application and provide reasons for its disagreement and
make a counter-offer.

16 The rules of the Property Bond Scheme shall provide for a process
for assessing and reaching agreement on the open market value of
25the interest in land.

Redeeming Bond

17 An applicant who wishes to dispose of an interest in land may—

(a) dispose of that interest at the depreciated value and
redeem the property bond; or

(b) 30dispose of that interest at a non-depreciated value without
redeeming the property bond.

18 Where an applicant disposes of an interest in land under
paragraph (17)(a) above, one month before the disposition, the
applicant must serve on the promoter a notice of the applicant‘s
35intention to dispose of the interest in land, together with the
valuation evidence required under the Property Bond Scheme
rules.

19 Where an applicant disposes of an interest in land under
paragraph (17)(b)—

(a) 40the property bond shall remain annexed and incident to
the interest in land under section 1B above;

(b) the person in whom the interest in land is now vested must
serve on the promoter details of the sale; and

(c) that person shall be deemed “the applicant” for all future
45purposes relating to the property bond for as long as they
are entitled to that interest in land.