Market Value & Statutory Loss compensation
Property value and compensation for commercial properties can be hotly disputed.
Two identical neighbouring properties with identical lease terms or freeholds can vary in value, due to the strength of covenant of a tenant.
A tenant with a year left on a tenancy could see far less compensation than a tenant with a year and a day left on a longer lease, due to different laws applying.
Sometimes tenants of commercial properties, even with short leases, can receive far more than their Landlords.
Who occupies and under what terms can have a significant influence on the property value and compensation payable. Application of the law in these different ways may not seem fair but has to be applied.
In representing commercial property owners, we can advise on how individual circumstances can affect compensation. In the shadow of a regeneration scheme, the adage of ‘fail to prepare, prepare to fail’ is important. Engaging our services at an early stage can help claimants to prepare for Compulsory Purchase.
Costs for relocating
If an occupier of a commercial property relocates, they will be concerned about the costs of relocation and also rebuilding their business once they have moved.
Customers can be lost due to relocating and profits can be diminished whilst a business waits to close down. Profits can also reduce because business owners are distracted from their normal duties by having to find somewhere to relocate to. It may be that suitable alternative accommodation is available but at a price or rental which does not provide value for money.
In theory, all of these costs and losses can be recoverable under what is known as Trade Disturbance compensation. However, issues such as the terms of occupation can impact on which sources of law determine the compensation that is payable.
There are also various tests to assess whether a business has taken the correct decision to relocate and judgments on claim mitigation to be considered.
What if I have to close down my business?
Sometimes, relocating is not an option. There may not be suitable space available nearby or there may not be enough time provided to find and move into suitable alternative accommodation.
Total or Partial business extinguishment claims can provide compensation for companies closing down. These claims assess claimants’ accounts including their goodwill, stock, fixtures and fittings.
Businesses cannot simply decide to close down in the hope that their compensation would be higher than if they relocated. A wealth of sources of law help to determine what can and cannot be done. However, where claimants are 60 years old or above, in certain circumstances, they may be able to seek compensation for closing down even when many would relocate.
Assessment of compensation is enormously complex due to the sheer weight of various sources of law which help determine claim values. To plan for what your potential claim would be, it is important to take early advice.