Electricity line compensation sparks warning
Published June 20th, 2017
Electricity companies do not always have permanent rights for the siting of their pylons, poles and powerlines. They are now seeking to obtain these in order to secure their assets. Under the 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 a house, known as ‘injurious affection’.
Land and property owners who are approached by electricity companies or their agents regarding compensation, are being urged to consult an experienced, independent Chartered Surveyor before accepting any offers. Harrison Riddle, a Chartered Surveyor with Berrys in Kettering, who specialises in Electricity Act 1989 compensation, explains the issues.
“The correct approach in assessing the compensation due, particularly where apparatus might restrict development, is to identify and value the client’s position in the ‘scheme’ and ‘no scheme’ world and calculate the difference.
“This can involve highly complicated valuations. The offers being issued directly by electricity companies and obtained by many claims companies often don’t address this principle.
“A property owner may be offered tens of thousands of pounds yet if properly represented, might be entitled to hundreds of thousands of pounds.
“Berrys can provide an initial, no obligation consultation, free of charge and we undertake any claim work at risk. This means that clients only pay a fee if we are successful and they accept the offer achieved.
“For negotiating in respect of electricity transmission apparatus, our fee is 12.5% (plus VAT) of the payment received. However, in the event that we secure an additional surveyors fee from the electricity company, we deduct this from our commission.”
The RICS professional statement ‘Surveyors advising in respect of compulsory purchase and statutory compensation, 1st edition’ (April 2017), places a duty on RICS regulated surveyors only to provide advice if they have the required competence and resources.
Berrys’ advice for claimants is to ensure that the firm they use has access to specialist chartered surveyors, as well as chartered town planners, registered valuers, architectural technicians, chartered building surveyors and business consultants.
“If claimants are employing a niche practice to act on their behalf which is also working on a commission basis, they need to consider whether that company is likely to bear the cost of external consultants in compiling and negotiating their claim where appropriate,” Harrison advised.
“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.
“Broadly speaking, the electricity companies are only interested in securing permanent rights for their high voltage apparatus. This could be anything from 11kv conductors on wood poles, to 400kv conductors on steel lattice pylons.
“For lower voltage equipment, such as 240v Aerial Bundled Conductor’s (ABC’s) on wood poles, the electricity companies will generally only pay for a termed wayleave.
“The apparatus must be situated on, under, over, or swinging over your property’s boundary and cannot only supply your property in order to claim. Also, an easement cannot have been granted previously. However, occasionally the electricity company will have exceeded the extent of its rights within an existing easement. This can sometimes lead to a further claim. A clause may also have been incorporated into an existing easement that enables you to claim again when a certain trigger event occurs.”
Whilst chartered surveyors cannot give legal advice, some are failing to comment upon legal documents on which they are expected to have knowledge.
“The terms of the easement, which is the legal document signed in exchange for the compensation, should be properly negotiated,” he said.
“Solicitors need to be clearly instructed about the clauses to be included and excluded and these should be explained to and agreed with the client well in advance. It’s also important to realise that granting permanent rights is not advisable in every circumstance,” he added.
If you have pylons, poles or powerlines on your property or are entering an option or promotion agreement on land hosting apparatus, contact Harrison Riddle on 01536 532399 or email firstname.lastname@example.org for a friendly and informal, no obligation consultation.