the lessee shall be entitled in accordance with this section to compensation from the incoming lessee or the leasing authority, as the case may be, for improvements on the land effected or purchased by him.
(2) In every such case the leasing authority shall cause a valuation of the improvements on the land effected or purchased by the lessee to be made by a person whom the leasing authority reasonably believes to be competent to make the valuation.
(3) As soon as possible after that valuation has been made, the leasing authority shall give to the lessee notice in writing informing him of the amount of that valuation and, except where the lease has been determined by re-entry or forfeiture, requiring him to notify the leasing authority in writing within 2 months whether he agrees to the amount of that valuation or requires that valuation to be determined by arbitration in accordance with subsection (4).
(4) Within 2 months after the giving of that notice to the lessee, he shall give notice in writing to the leasing authority stating whether he agrees to the valuation specified in the notice given to him or requires that valuation to be determined by arbitration. If he so requires, that valuation shall be determined in accordance with the provisions of clauses 7 to 11 of Schedule 1, which shall, with the necessary modifications, apply as if the valuation were being made to determine the rent payable under a renewal lease:
provided that this subsection shall not apply in any case where the lease has been determined by re-entry or forfeiture.
(5) If the lessee fails to give to the leasing authority within the time specified in subsection (4) the notice referred in that subsection, he shall be deemed to have agreed to the valuation set out in the notice given to him under subsection (3).
(6) Where in any case to which subsection (1) applies the land is to be again leased by the leasing authority under paragraph (b) of section 11,—
(a) it shall be offered for lease weighted with the value of improvements effected or purchased by the former lessee as fixed under the foregoing provisions of this section:
provided that, in any case where the lease has been determined by re-entry or forfeiture, if the leasing authority believes on reasonable grounds that the granting of a new lease of the land is being hindered by reason of the value of improvements as determined under subsection (2) being excessive, the leasing authority, in its discretion, may from time to time reduce the value of the improvements and again offer the land for lease by public application:
(b) the value of those improvements shall be paid to the leasing authority by the incoming lessee before he is admitted into possession of the land:
provided that, with the consent of the former lessee and of every person entitled to receive payment of any amount in respect of the whole or any part of those improvements, the said value or any part thereof may be paid by instalments over a period of years or be secured by way of mortgage to the former lessee or other person entitled. Any payment by instalments over a period of years shall be subject to such conditions as to payment of interest and otherwise, and any mortgage shall contain such provisions, as the leasing authority thinks fit:
(c) the value of those improvements when so paid to the leasing authority shall be paid by it to the former lessee or other person entitled to receive payment, less any money due to the leasing authority by the former lessee in respect of the land and improvements and less the amount of any expenses incurred by the leasing authority in recovering possession of the land.
(7) Where in any case to which subsection (1) applies the leasing authority decides that the land is not to be again leased under paragraph (b) of section 11, the value of the improvements on the land effected or purchased by the former lessee, as fixed under the foregoing provisions of this section, shall be paid by the leasing authority to the former lessee or other person entitled to receive payment, less any money due to the leasing authority by the former lessee in respect of the land and improvements and less any expenses incurred by the leasing authority in recovering possession of the land.
(8) Except as provided in subsections (6) and (7), no lessee shall have any right or claim against the leasing authority in respect of any improvements effected or purchased by him on land comprised in any land leased under paragraph (b) of section 11.
(9) In this section the term improvements means substantial improvements of a permanent nature; and includes reclamation from swamps; clearing of bush, gorse, broom, sweetbrier, or scrub; cultivation (including the clearing of land for cropping, and the clearing and ploughing of land for, and the laying down of the land for or with, grasses); planting with trees or live hedges; the laying out and cultivating of gardens; fencing; draining; roading; bridging; sinking water wells or bores, or constructing water tanks, water supplies, water races, irrigation works, head races, border dykes, or sheep dips; making embankments or protective works of any kind; in any way improving the character or fertility of the soil; the erection of any building; and the installation of any telephone or of any electric-lighting or electric-power plant.
(10) In this section the term value of improvements means the added value which at the time of valuation the improvements give to the land; and valuation, in relation to improvements, has a corresponding meaning.