Compulsory Purchase

Question 1

What is the procedure to make a Compulsory Purchase Order?

Answer 1

The procedure is set out under the Land Acquisition Act 1981:

1) Formulation
2) Resolution
3) Referencing
4) Making the order
5) Notification and Publicity
6) Objections
7) Consideration of objections
8) The Inquiry
9) The Written Representation
10) The Decision

Question 2

What would be the typical Heads of Claim for a Landowner?

Answer 2

1) The Value of the Land Taken
2) Severance and Injurious Affection
3) Disturbance
4) Loss Payments
5) Professional Fees

Question 3

What would be the typical Heads of Claim for a Tenant?

Answer 3

1) Value of unexpired interest of the tenancy
2) Severance and injurious affection
3) Any just allowance by an incoming tenancy
5) Rent reorganisation payment (If an AHA tenant)
6) Disturbance
7) Loss payments
8) Professional fees

Question 4

What is severance?

Answer 4

Severance occurs where the land acquired contributes to the value of the land which is retained so that when severed from it, the retained land loses value.

Question 5

What is Injurious Affection?

Answer 5

The depreciation in value of the retained land as a result of the proposed construction on land acquired both for construction of works and their subsequent use.

Question 6

What is Betterment?

Answer 6

The increase in value of retained land that is adjacent to the land acquired. The increase in value would be offset against the total compensation.

Question 7

What is Material Detriment?

Answer 7

A claimant is able to serve a counter-notice within 2 months of a CPO notice requesting the acquiring authority purchase the retained land that is no longer suitable or able to be farmed.

Question 8

What are the Rules of Valuation in respect of a compulsory purchase acquisition?

Answer 8

Set out in S.5 of the Land Compensation Act 1961:
Rule 1 - No allowance shall be made account of the acquisition being compulsory.
Rule 2 - The value shall be the same as if the land was sold in the open market by a willing seller.
Rule 2A - The value should be assessed with the no-scheme principle.
Rule 3 - The special suitability of the land shall not be taken into account, where it could be applied only in pursuance of the scheme and statutory powers.
Rule 4 - Where the land is used unlawfully, no increase in value should be taken into account.
Rule 5 - Where the land is used for a purpose of such a nature that there is no demand or market for, the compensation may be assessed on the cost of equivalent reinstatement.
Rule 6 - The provisions of rule (2) shall not affect the assessment of compensation for disturbance.

Question 9

What is the Pointe Gourde principle?

Answer 9

Any increase in the value of the land which is solely attributable to the scheme should not be paid as compensation.

Question 10

What powers are available to acquire land?

Answer 10

1) By Agreement
2) Notice to Treat followed by Notice of Entry
3) General Vesting Declaration

Question 11

What is the procedure for acquiring land via the Notice to Treat and Notice of Entry route?

Answer 11

1) A Notice to Treat must be served within 3 years of the confirmation of the CPO and state that the acquiring authority is willing to negotiate for possession of the land.
2) The Notice of Entry must then be served to take possession of the land within 3 years of the Notice to Treat being served. A minimum of 14 days notice must given for entry,
3) Possession can take place but the Title will not be conveyed to the acquirer until the compensation has been paid.

Question 12

What is the procedure for acquiring land by a General Vesting Declaration?

Answer 12

1) A preliminary notice (A form of statement of effect of a GVD) must be served on all affected parties.
2) A GVD may be executed 2 months after the preliminary notice.
3) A second notice (Notice of making) is then served stating that the GVD has been executed and specifying a date when the land vests - at least 28 days notice must be given.
4) On the vesting date, possession can be taken and the Title is transferred.

Question 13

What is a blight notice?

Answer 13

A blight notice can be served on an acquiring authority requesting the acquiring authority to purchase the property at its untainted value. The value of the property must have been reduced by the scheme. The acquiring authority have 2 months to respond to the blight notice.

Question 14

What are the Notification and Publicity requirements of making a CPO?

Answer 14

1) A notice must be published for 2 successive weeks in a local newspaper
2) A notice must be published on the site
3) Notices must be served on affected parties providing details of the scheme and the timeframe for objections - This must be at least 21 days from the date the notice was served.

Question 15

What is the timeframe for notifying parties of an Inquiry in respect of a CPO?

Answer 15

42 days notice must be given for the Inquiry.

Question 16

What is Basic Loss?

Answer 16

Basic Loss an additional payment made to reflect the inconvenience and disruption caused by the acquisition. The payment made is 7.5% of the value of the interest subject to a maximum payment of £75,000. To qualify you must have held an interest in the land for a year or more prior to possession.

Question 17

What is Occupiers’ Loss?

Answer 17

Occupiers Loss is an additional payment made to reflect the inconvenience and disruption caused by the acquisition. The payment made is 2.5% of the value of the interest subject to a maximum payment of £25,000. To qualify you must have occupied the land for a year or more.

Question 18

What is Home Loss Payment?

Answer 18

If you are a freehold owner or a lessee with at least 3 years unexpired you are entitled to 10% of the market value of the dwelling. Subject to a maximum payment of £64,000 and a minimum of £6,400.

Question 19

How are Surveyors’ Fees assessed?

Answer 19

Fees are assessed on a quantum meruit basis which is an hourly rate basis reflecting the complexity and particular requirements of each case.
Ryde’s Scale plus 30% is still used for some schemes (A scale of fees calculated dependent on the level of claim)

Question 20

When can compensation be claimed when no land is taken?

Answer 20

The McCarthy Rules - Section 10 under Compulsory Purchase Act 1965 - A reduction in the value of your land caused by the execution of public works when no land is taken.

Question 21

What is a Part 1 claim?

Answer 21

A Part 1 claim under the Land Compensation Act 1973 is based on the depreciation in the value of land due to the physical factors caused by the use of the public works: Noise, vibration, smell, fumes, smoke, artificial light and discharge. The first claim day is 12 months after the use of the public works commenced.