Betterment deduction as a form of compensation

Authors

• Miroslaw Gdesz

Keywords:

Just compensation, betterment deduction, givings, betterment charges

Abstract

The main aim of this paper is to examine the compensation-betterment issue in the process of granting compensation for compulsory acquisition of land. This situation is the opposite of the decline in the value of a retained land (injurious affection and severance). The paper focuses on the concept of betterment off-set for the amount of compensation with the analysis from the Polish point of view. In the first part of the paper a definition of the term "betterment off-setting" is presented and evaluated. Then three approaches to betterment are discussed: betterment set off rule as a general rule, a betterment deduction rule limited only to compensation for injurious affection and severance and the lack of betterment provisions. The paper briefly evaluates each of these approaches. Further the Polish approach to betterment in the context of compensation provisions is discussed. On the basis of such examination the paper presents the fairest method of recapturing the enhanced value of land. In this optimal method recapturing provisions should be separated from the expropriation provisions. Moreover the development agreement supported by development contribution seems to serve as the main tool of recapturing. The method discussed resolves also the problem of a public project (ex. subway) increasing the value of not only the land adjacent to the acquired land but also of the further parcels. I suggest that deduction of compensation equal to the amount of infrastructure levy should be allowed only when a landowner demands it. Finally the paper suggests that only betterment charges can successfully deal with the increase in the value of private property accrued by public project.