Electricity line compensation sparks warning
An increasing number of firms are offering to pursue compensation for property owners who have pylons, poles or power lines over their land.
This is in exchange for a permanent right for the equipment to remain, which the landowner must grant to receive the compensation. Electricity companies are also now approaching property owners directly or using their agents to issue offers.
Under current legislation, compensation is payable for any impact caused upon the grant of permanent rights. For example, this could be for the devaluation that power lines cause to your house, known as ‘injurious affection’. This generally increases the closer the apparatus is. However, converting what may be a temporary wayleave, into a permanent easement, is not always advisable.
By granting an easement, any wayleave payments that you receive are typically capitalised, by a multiple of 20, as part of the consideration. This means that if the settlement achievable is likely to be just ‘capitalisation’, then you could be out of pocket after less than 20 years, or 26 if you are also entitled to back pay.
Upon granting an easement, you also forego your ability to serve Notice to Remove under Schedule 4 of the Electricity Act 1989. While serving notice is rarely advisable, this means that if you subsequently obtain planning consent for development in proximity to the apparatus, then you may have given up any ability you had to negotiate its diversion.
The Neighbourhood Planning Act 2017 has recently repealed a provision of compulsory purchase legislation that implied an important clause into easements, which may have otherwise served to protect your interests. It is therefore now entirely down to your agent to negotiate the inclusion of any covenants necessary in order to protect your interests.
The RICS professional statement ‘Surveyors advising in respect of compulsory purchase and statutory compensation, 1st edition’ (April 2017), also now places a duty on RICS regulated surveyors to only provide advice if they have the required competence and resources.
Our advice is to ensure that the firm used has access to chartered surveyors, who specialise in Electricity Act compensation, as well as chartered town planners, registered valuers, architectural technicians, chartered building surveyors and business consultants. All of these individuals could have a vital role to play in securing you the full amount due.
If you are employing a niche practice to act on your behalf, who are working on a commission basis, you may need to consider whether that company is likely to bear the cost of external consultants (where appropriate) in compiling and negotiating your claim. It is also important to check that the firm is acting independently of the electricity company and that it has provided all of the requisite pre-contract information.
Chris Jones is a partner at Berrys, Shrewsbury