Part 1 Compensation
What is Part 1 Compensation?
Under Part 1 of the Land Compensation Act 1973 (‘the Act’), compensation can be claimed by people who own and also occupy property that has been reduced in value by more than £50 by physical factors caused by the use of a new or altered runway.
The physical factors are noise, smell, vibration, fumes, smoke and artificial lighting and the discharge onto the property of any solid or liquid substance.
The cause of the physical factors must be the new or altered runway in use. Other factors such as loss of view or privacy, or personal inconvenience are not included under Part 1 compensation.
When can someone submit a claim for Part 1 Compensation?
The first day for claiming compensation is a year and a day after the extended runway came into use (known as the ‘first claim day’). The extended runway at London Southend Airport first came into use on 8 March 2012, so the first claim day is 9 March 2013.
Exactly who can submit a claim for Part 1 Compensation?
To claim you must have been the owner of the property before the date the extended runway at London Southend Airport first came into use - so 8 March 2012. You must also still be the owner on the date you claim. In addition to being the owner, you must also occupy the property as your home at the date you claim. The exceptions to this are where you have let the property to someone else or there is another legal reason preventing you from occupying - for example, there is a court order in place which removes your right to occupy the property.
You must be the owner and the occupier before the extended runway first came into use and at the date you claim. You must occupy the whole of the unit and own the freehold or a lease with at least three years left to run on the whole or any part of the unit at the date of claiming.
Small business premises are an example of the type of property that falls into this category. If the property is a shop with living accommodation above, you can claim for the living accommodation. You may also claim for the business part of the property provided that the business part has an annual value of not more than £34,800.
Can I claim if I inherited my property after the runway was extended and first came into use?
Yes, provided that the person from whom you inherited the property was the owner before the date the extended runway first came into use. Also on the date you claim, you must also be the owner of the inherited property. Ownership does not pass by inheritance immediately on the death of the previous owner. Further, being named as beneficiary in a will does not mean that ownership has transferred. You are the owner only when the legal title of the property has passed to you. You must also occupy the inherited property at the date you claim, if you have a right to do so, even if you still have another property to live in.
Can the personal representatives (executors/administrators) of a deceased person make a claim?
No. They obtain legal title by operation of the law and not by inheritance. As they have not inherited, they cannot take the benefit of those provisions described above.
How does someone submit a claim?
You can make a claim yourself or ask someone to do this for you. Most people prefer to use a professional property valuer or an agent who specialises in Part 1 Claims to prepare and negotiate the claim on their behalf.
Using an agent to act on your behalf.
It is quite possible that one or more agents offering to act on your behalf have already approached you.
London Southend Airport will need to be satisfied that an agent has been authorised to act for you. We do this by asking that you either sign the claim form or that your agent provides other signed evidence that you have authorised them to act on your behalf.
We can only accept one claim on your behalf.
We have no authority over the agent you employ or any responsibility for their actions or conduct. This includes the terms of any contract or agreement between you and your agent, the contents of your agent’s literature and the way in which your agent may ask for payment of fees from you. We cannot comment on the terms of an individual contract or agreement, which are private matters between you and your agent. For these reasons, it is important that you are clear about the contractual arrangements you enter into with your agent, which could be legally binding. You should also be clear about what an agent will actually do on your behalf and what payments and other costs you may be asked to meet. This includes any charges if your claim is not successful or if you choose no longer to employ the agent. It also includes any other payment in addition to any specific fee we repay.
We will refund what we consider to be reasonable valuation expenses incurred by you to employ an agent to prepare and negotiate your claim. We shall repay only one set of agent’s fees. You need to keep this in mind if you consider changing your agent during the processing of your claim. The repayment of your agent’s fees will only happen if your claim is successful and compensation is to be paid.
If we make a formal offer of compensation to you, we will also show separately the fee which will be due to your agent. This will be paid to you as part of the overall claim for compensation and it will be for you to settle with your agent.
How is a claim dealt with?
We will write to acknowledge receipt of a claim form to the person submitting it. It is important that you, or your appointed agent, contact us if an acknowledgement letter is not received within 6 weeks of your claim being sent to us.
Your claim will be checked to see that all necessary information has been provided. Other checks will be carried out to establish that your claim is valid.
Once our initial checks are successfully completed, one of our valuers will contact your agent (or you if you act for yourself) to discuss your claim.
Please note: whether you act for yourself or use an agent, it is important that you do not enter into any financial commitment in the hope that you will receive compensation. This is because:
Something may arise during the processing of your claim that could lead to it being rejected.
The amount of compensation offered to you may be less than you claimed or no compensation will be offered to you if your property has been devalued by less than £50;
If your property is mortgaged, we are required by law to offer the compensation to the mortgage lender to reduce the amount you owe them. They may decide not to accept the compensation and it will be paid to you.
How is compensation worked out?
Our valuer will assess the impact of physical effects arising from the use of the extended runway against the value of your property based on property prices current on the first claim day.
The compensation will be assessed based on the amount of traffic using the extended runway at the first claim day and will also take into account any future increases in traffic that can reasonably be predicted at the first claim day.
We may have already undertaken to provide noise insulation for your property or to pay a grant towards its installation. If so, the benefits of the insulation will be taken into account and it will be assumed for valuation purposes that it has been installed.
If an amount of compensation has not been agreed or our valuer recommends that no compensation is payable, we shall then write to you to tell you that and inform you that no further action will be taken.
If you disagree with our decision, you may refer your claim to The Upper Tribunal (Lands Chamber) for determination.
So what does the person claiming have to pay for?
If your claim is successful, we will pay:
The agreed compensation for the decrease in value of your property due to the “physical factors”
Interest on your compensation. This is based on statutory rates current at the time. This will be calculated from the date on which the claim was first received by us to the date your compensation is paid.
The reasonable fees of your agent
If our simple ownership check at Land Registry is unsuccessful, the reasonable costs of a solicitor to prove your ownership of the property, including the costs incurred to retrieve title deeds.
Any other cost for proving title will have to be met by you. Your solicitor will be asked to invoice us for their costs, which will be paid after your compensation has been paid.
Even if your claim is successful, we will not pay:
Any charges your agent may seek from you that are additional to the reasonable fees agreed by LSACL for the preparation and negotiation of your claim;
The fees of more than one agent;
The solicitor costs that have been unnecessarily incurred for proving your ownership of the property;
Any charges made by your mortgage lender relating to our legal obligation to offer the compensation to the lender before you.
If your claim is not successful, we will not pay any:
What can someone do if there is a dispute about their claim?
We hope we will reach an agreement. But if we cannot, you may refer your case to The Upper Tribunal (Lands Chamber).
The Upper Tribunal (Lands Chamber) is the court of law appointed to deal with this type of dispute. The tribunal will make the final decision on your claim but you should be aware that it has power to award costs to either party, so it is wise to take professional advice before referring your claim.
It is important that you make your referral no later than six years from the first claim day.
Is there a time limit on claiming?
Yes. The Limitation Act 1980 says a person whose property has been reduced in value by more than £50 by physical factors caused by the use of a new or altered runway must, within six years of the first claim day:
Either agree an offer of compensation (made by us) or,
If agreement cannot be reached, ask The Upper Tribunal (Lands Chamber) to decide the amount of compensation.
After that six-year ‘limitation period’, we can no longer be ordered to pay compensation.
If someone is making a claim and they have a query, who should they contact?
Please write to us at:
The Estates Surveyor
London Southend Airport
Southend on sea
Essex SS2 6YF