Points to be remembered for compensation for land acquisition

KNOWLEDGE BANK

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Message from B K Aruna 03.09.2023

Ten points to be remembered while doing valuation for the purpose of computing compensation for land acquisition (Courtesy : Mr. A. Anbazhagan)

1. For the purpose of valuation for land acquisition, value is to be estimated as on the date of notification (and not as on the date of inspection).

2. In order to justify, it is advisable to adopt plinth area rates / schedule of rates prescribed by the PWD or by any authorities.

3. The reinstatement cost of the building is to be certified and depreciation is not to be considered.

4. Deduct the salvage value, say, at 6% to 10% from the reinstatement value and certify the value. This gives the right to the owner to take the items like joinery, sand filled in the basement, fixtures, steel, etc.

5. While considering the area to be valued, consider the structural stability aspects.

6. While considering the area to be valued, consider the injurious affection which impacts the usage of the unaffected portion of the structure.

7. While considering the area to be valued, include the deemed affected area for set back and open space as per the local town planning rules.

8. Any structure that is physically present in the area of acquisition has to be compensated. The current usage of the same need not be questioned.

9. Site inspection takes relatively more time when compared with bank valuation, as every structure needs to be measured accurately.

10. In case of considering the value of the land, valuer should understand the difference in the interpretation of the word ‘market value’ used by the government and by the valuers.

a. The Government’s interpretation of market value is the value that is

recorded in the sub-registrar office (value recorded based on sale transactions).

b. Valuer normally interprets the ‘market value’ as estimated price of an asset between willing buyer & willing seller, arm’s length transaction, etc..