Property Valuation, 3rd Edition

Chapter 13Valuations for Expropriation

13.1 Introduction

Expropriation¹ refers to the action by a government or state‐sanctioned entity of taking property from its owner for public use or benefit. Property might be expropriated for many reasons: to make provision for infrastructure and other development projects, to plan new areas of urban settlement or to reallocate property for restitution or consolidation purposes for example. Regardless of the reason, the use of expropriation powers can have a substantial impact on the livelihoods of those affected, and therefore fair compensation is regarded as a just response.

When assessing fair compensation, the aim is to place the affected party in a position after expropriation that is no better or worse than before, and the valuer's role is central to this aim. For example, in Nigeria the law stipulates that compensation for expropriated buildings and installations must be assessed using the depreciated replacement cost (DRC) method. Egbenta and Udoudoh (2018) argue that this does not reflect market value and is inadequate to put claimants in position they were in before acquisition.

Similarly, focusing on the Dutch compulsory purchase process, Holtslag‐Broekhof et al. (2018) explore the variation between the compensation offered by the expropriator (the acquiring authority) and by the courts. Dutch compensation heads of claim are comparable to the United Kingdom – market value of the acquired property, any diminution in value of ...