22 October 2015
Property speculators must take the rough with the smooth
Property speculators who buy low value land with a view to future development must take the rough with the smooth. In one case, a businessman who hoped to reap over £4.5 million in compensation after a gas pipeline was laid under land he had purchased came away from a tribunal hearing without a penny.
Through his company, the businessman had bought an empty 33-acre brownfield site as a long-term investment. He believed that the site had potential for coal extraction, followed by restoration and residential development. Almost 20 years later, National Grid Gas plc compulsorily purchased the right to lay a high pressure gas pipeline under part of the land.
The businessman claimed, amongst other things, that the pipeline had sterilised the site's development potential and rendered it practically worthless. His company also sought damages for the disturbance of its land during the pipe-laying works and valued its overall claim at £4,523,367.
In dismissing the claim, however, the Upper Tribunal (UT) noted a complete absence of evidence that any loss or damage had been caused by contractors' temporary occupation of part of the land. The presence of the deep, heavily-encased pipeline constituted no bar to future development and the scenario painted by the businessman was theoretical, unrealistic and excessively pessimistic.
There was no evidence that the businessman, who agreed that he was a property speculator, had made any attempt to sell the land, and the UT described his company's claim as opportunistic and without merit. Even had the pipeline in fact extinguished the land's development potential, the company would have suffered no loss.