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7. (1) The amount to be paid by way of compensation under section 35A shall be assessed in accordance with the following paragraphs of this regulation.
(2) The rules set out in section 5 of the 1961 Act and, for Scotland, in section 12 of the 1963 Act (rules for assessing compensation) shall, so far as applicable and subject to any necessary modifications, have effect for the purposes of this regulation as they have effect for the purpose of assessing compensation for the compulsory acquisition of an interest in land.
(3) No account shall be taken of any enhancement of the value of any interest in land, by reason of any building erected, work done or improvement or alteration made on any land in which the grantor is, or was at the time of erection, doing or making, directly or indirectly concerned, if the Lands Tribunal or, as the case may be, the Lands Tribunal for Scotland, is satisfied that the erection of the building, the doing of the work, the making of the improvement or the alteration was not reasonably necessary and was undertaken with a view to obtaining compensation or increased compensation.
(4) In calculating the amount of any loss under regulation 4(e) expenditure incurred in the preparation of plans or on other similar preparatory matters, shall be taken into account.
(5) Where the interest in respect of which compensation is to be assessed is subject to a mortgage–
(a)the compensation shall be assessed as if the interest were not subject to the mortgage, and
(b)no compensation shall be payable in respect of the interest of the mortgagee (as distinct from the interest which is subject to the mortgage).
(6) Compensation under section 35A shall include an amount equal to the grantor’s reasonable valuation and legal expenses.
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