CPO – summary of the key points and guidance
The law and procedures relating to compulsory purchase are very complex. If you are affected by a CPO scheme then you will be entitled to compensation which will be assessed in accordance with the Compulsory Purchase Code. In most circumstances the costs of employing a professional representative will be included as part of the compensation to be paid by the acquiring authority.
Below is a summary of the key themes of the process and what you can do if you are affected.
What is a compulsory purchase?
A compulsory purchase is a legal function that allows certain public bodies such as North Somerset Council to acquire land, for a specific purpose, if the landowner is not willing to sell by agreement. Whilst it might be possible to acquire land for small-scale projects by agreement, site assembly for major schemes will usually mean the parties need to consider using compulsory powers.
Before a CPO can be implemented, the acquiring authority will have to justify it to the Secretary of State.
The acquiring authority must be able to demonstrate, in respect of the CPO, that:
- It is authorised by statute to purchase land compulsorily for a particular purpose and the CPO is necessary to achieve this purpose.
- There is a compelling case in the public interest that sufficiently justifies interfering with the rights of those with an interest in the land affected.
The acquiring authority must demonstrate that all of the land included within the CPO is necessary for the implementation and operation of the CPO scheme.
Objecting to a CPO
Any person can make an objection to a CPO.
Judicial review proceedings can only be brought, in exceptional circumstances, against a CPO once it has been made. As a result, a CPO can only be challenged through the inquiry process.
Objections to a CPO must be made:
- To the Secretary of State.
- In the manner specified in the personal/press/site notice of the making of the CPO (usually in writing, specifying the grounds of objection).
- Within the period specified in the personal/press/site notice of the making of the CPO (usually 21 days).
The Secretary of State will send copies of any objections to the acquiring authority and, in practice, to other major remaining objectors.
Ground of objections
Objections usually fall into three categories, in that an objector:
- Agrees with the purpose of the CPO, but would like to see minor amendments to minimise the impact of the scheme on them. For example, to reduce visual or noise impact, or minor adjustments to the land required.
- Agrees with the purpose of the CPO but feels that it should be located elsewhere.
- Objects to the CPO completely, for example on the grounds that:
- the CPO does not meet the statutory purpose for which it is made;
- there is no need for the scheme for which the land is being acquired;
- the land being acquired is not needed because there is an alternative means of bringing about the objective of the CPO;
- the manner of implementation of the CPO is challenged;
- retention of the existing use of the land is more important than the purpose for which it is proposed to be acquired; or
- the underlying scheme is not viable or there are inadequate funds for its implementation.
If you are the owner of property affected by a CPO you will be entitled to compensation to recover your losses. The principle rule is that the property owner should not be placed in a worse financial position than he would be in if the CPO had not been declared. The full value of the property acquired must be paid by the acquiring authority. The authority will also pay other costs of removal and acquisition together with reasonable legal and surveyors fees. Depending on the type of property and other criteria, additional compensation may be payable. This can be as much as 10% of the value of the property.
If you have to sell or move out of your property you are entitled to the costs and expenses reasonably incurred in vacating that property. The claim can include the costs of acquiring a replacement property (but not the cost of the property) and the costs of moving in to the property.
There is no overriding obligation on an acquiring authority to provide alternative premises. However, most will help you to identify possibilities available on the market. Accordingly, you should contact the acquiring authority and local estate agents at an early stage to register property search requirements.
The acquiring authority will pay other unavoidable costs arising from moving home. For example, if you owned the property which is acquired you will be entitled to claim for the legal costs of conveyance you incur when acquiring a new property. These costs will be paid up to the amount that would be payable if the purchase price of your new property was not more than the market value of your old one. Above this level the acquiring authority may refuse on the grounds that you are benefiting from the fact that you are ending up with a better property than you started with. This is because you are said to have received “value for money”. The authority may exercise some discretion here.
Every loss should be considered on its merits and should be recoverable if a natural, direct and reasonable consequence of being disturbed. The onus is on the claimant to justify his or her claim. Therefore, it is up to you to prove that you should be compensated rather than expect the acquiring authority to come up with anything. Accordingly, it is of the utmost importance that you keep a detailed record of losses sustained and costs incurred in connection with the acquisition of your property. You should keep all relevant documentary evidence such as receipts, invoices and fee quotes. You should also keep a record of the amount of time you have spent on matters relating to the compulsory purchase of your property.
Where no suitable alternative accommodation is available on reasonable terms the local housing authority has a duty to re-house a resident whose dwelling has been compulsorily acquired regardless of which public authority was responsible for the acquisition.
If the home of a disabled person has been adapted to meet his or her special needs, the compensation to the occupier or the landlord may reflect the cost of providing or modifying a similar dwelling.
The Royal Institution of Chartered Surveyors (RICS) operates a compulsory purchase helpline. They can be contacted on 0870 333 1600. This helpline will put you in touch with experienced chartered surveyors in your area who will provide you with up to thirty minutes of free advice.
The Department for Communities and Local Government print a series of five guidance booklets which explain, in simple terms, how the compulsory purchase system works including purchase by agreement.