Exploring the valuation of compulsory purchase compensation

Abstract

Purpose This paper aims to analyse how Dutch Compulsory Purchase (CP) compensation is decided on and to explore to what extent the valuation of the CP compensation is assessed by professionals within a range of 10 per cent (higher or lower) difference. Design/methodology/approach The authors study CP compensation using the Dutch Legal Intelligence database, assessing every publicly available court decision and comparing the compensation that is offered in the voluntary negotiations and during the CP procedure in court. Findings The results show that there are many uncertainties in the valuation process of CP that lead to a broad range of valuation outcomes. In 94 legal CP cases from the Netherlands, the final offer of compensation in court was on average 56.7 per cent higher than the last compensation offer from the expropriator. The differences in valuation were related to several aspects including different systems of valuation and different interpretations of the CP legislation. Originality/value A central issue in the CP procedure is the amount of compensation that the landowner receives. There are few researchers who have studied how accurate CP compensation is appraised in practise. This is one of the first attempts internationally to empirically conduct an analysis of CP compensation values.

Valuation for compensation practices in Kenya: an evaluation

“…Elsewhere, it has been noted that adopting statutory rather than market basis in valuation for compensation purposes results to unfair compensation amounts (Akujuru and Ruddock, 2015;Egbenta and Udoudoh, 2018). Different interpretations of the law have also been noted to contribute to this problem (Holtslag-Broekhof et al, 2018;Lekgori et al, 2020).…”

“…In addition, Larbi (2008) noted that customary rights and informal occupiers of land are not compensated in Ghana. Some losses have been ignored, particularly the intangible ones, and the valuation methodology has been questioned (African Development Bank, 2003;Asian Development Bank, 2007, 2014Holtslag-Broekhof et al, 2018;Munubi, 2016;Omar and Ismail, 2009;Rao et al, 2017;World Bank, 2016). Similarly, Egbenta and Udoudoh (2018), Bello and Olanrele (2016) and Ige and Oladapo (2018) noted that most project affected persons were dissatisfied with the compensation amounts in Nigeria while lack of standardized valuation methods and procedures in Ethiopia have been found to contribute to unfair valuations and compensations (Alemu, 2013).…”

Consistency and Fairness of Property Valuation for Compensation for Land and Improvements in Zimbabwe

“…(ibid, 2005). Holtslag-Broekhof, et al (2018) and Kakulu (2008) attributed the problem of vast differences in property valuation for compensation to differences in the interpretation of ambiguous laws guiding expropriation and compensation. Moreover, Kakulu (2008) concludes that the use of unqualified people to estimate compensation contributed to the lack of uniformity in property valuation for expropriation.…”