Compulsory purchase—also known globally as expropriation or eminent domain—is a highly emotive and complex subject. At its core, it involves the state’s power to acquire private property for public use, often creating tension between development goals and individual property rights.
In a recent presentation, David Hunt, a seasoned professional with over 12 years in commercial real estate across Europe, tackled the legal and valuation intricacies of compulsory purchase. Drawing from international projects and academic research, Hunt offered valuable insights for professionals and policymakers alike.
Understanding the UK’s Unique Framework
Unlike some jurisdictions with a codified approach, the UK relies on a patchwork of statutes and common law to govern compulsory purchase. Hunt emphasized the principle of equivalence, which underpins UK valuation practices. This principle aims to place claimants in the same financial position after the acquisition as they were before—no better, no worse.
He explained that compensation eligibility extends beyond landowners to include leaseholders and others with legal interests. However, the process isn’t always straightforward, especially when it comes to issues like severance (where only part of a property is taken) and injurious affection (where nearby works reduce a property’s value without actually taking land).
Claims and Valuation: More Than Just Market Value
In compulsory purchase cases, claims typically fall into three categories:
- Land acquisition (some claim)
- Disturbance claims (for additional costs like relocation, school uniforms, or utility reconnection)
- Other statutory claims
Valuations are based on market value, assuming a willing seller in an open market. But crucially, valuers must disregard the scheme’s impact—both positive and negative—when assessing property value. This requirement adds a layer of complexity and often sparks disputes.
Hunt also highlighted how difficult it is to satisfy certain legal tests, like those set out in the McCarthy rules, which address claims related to interference from new infrastructure.
Global Challenges in Compensation and Consultation
Hunt’s presentation didn’t stop at the UK. Drawing from case studies in Romania, he illustrated some stark challenges in global compulsory purchase practices.
In one case, the Ursu family, displaced by a motorway project, received inadequate compensation—insufficient even to buy a new home. In another, 216 members of the Roma community were evicted from a dilapidated building and offered compensation so low (just €2,000–€4,000) that many ended up homeless.
These examples underscore systemic issues such as:
- Lack of transparency and stakeholder engagement
- Inadequate or poorly calculated compensation
- Minimal awareness of legal rights among affected parties
The Role of Valuers: Advocates for Fairness
One of Hunt’s central arguments is the need for valuers to play a greater leadership role in these processes. Unlike legal professionals and policymakers, valuers are often underrepresented in research and discussions about compulsory purchase. Yet they are crucial to ensuring fair and just outcomes.
He called for more professional development, including workshops and training, to equip valuation professionals with the tools to navigate these complex cases.
Key Takeaways
- The UK’s approach to compulsory purchase is built on the principle of equivalence, but practical application is legally and emotionally complex.
- Valuation for compulsory purchase must ignore the project’s impact and focus on open-market value, a challenging but essential requirement.
- Real-world examples from Romania reveal serious concerns about transparency, compensation adequacy, and stakeholder consultation.
- There is a global need for better engagement with and by valuers, who should lead efforts to make the compulsory purchase process more equitable.
Final Thoughts
Compulsory purchase will always be a sensitive area, touching on fundamental human rights and public good. But with better valuation practices, robust consultation processes, and active involvement from trained professionals, it can be navigated more fairly.
David Hunt’s work serves as a call to action for valuers, policymakers, and communities alike—to treat compulsory purchase not just as a technical issue, but a deeply human one.