Compulsory Purchase & Compensation

Question 1

What is a DCO?

Answer 1

Development Consent Order:
Means of obtaining planning permission for a Nationally Significant Infrastructure Project under the Planning Act 2008.

Question 2

What interests qualify under S.12 Acquisition of Land Act 1981?

Answer 2

Under Part 1 - Owners, lessees, tenants, occupiers (Book 1)

Under Part 2 - Mortgages, restrictive covenants, trustees (Book 2)

Question 3

What can be claimed for if impacted by a CPO?

Answer 3

• Land Taken
• Disturbance
• Loss Payments
• Severance & Injurious Affection

Question 4

What is a CAAD and what is the process?

Answer 4

Certificate of Appropriate Alternative Development

• determines what site could be used for in a no scheme world
• application through local council & can be positive (to prove) or negative (to disprove)

Question 5

What are the Crichel Down Rules?

Answer 5

Non-statutory arrangements for AA to sell surplus land back to owners if bought using statutory powers.

Conditions include ‘no material change’

Applies to freehold & long leaseholds

Question 6

What rights to compensation are afforded under 1961 & 1973 Acts?

Answer 6

1961 Act establishes the 6 rules of assessing compensation (Land Taken)

1973 Act defines the right to compensation if impacted by the use of the works (No Land Taken)

Question 7

How did you verify ownership data in relation to the National Grid referencing?

Answer 7

• Checking Land Registry documents
• Issuing questionnaires
• Erecting site notices for unregistered land

Question 8

What are the MacCarthy rules? When do they apply?

Answer 8

For claims under Section 10 Compulsory Purchase Act 1965
Injurious Affection compensation when land is not taken, but impacted by the execution of the works

1) The Injurious Affection must be the Consequence of lawful exercise of statutory powers
2) The Injurious Affection must arise if done without Statutory powers
3) The value of the land must be directly affected by physical interference with some legal right that the claimant is enititled to make use of in connection with their property
4) Damage arises from execution of the works and not from the use

Question 9

What is a Notice to Treat?

Answer 9

Notice stating on AA’s willingness to negotiate for a purchase & compensation.

3 steps -
1- a notice to treat
2 - a notice of entry
3- a conveyance

Possible to gain possession and start development earlier than under a General Vesting Declaration.

Usually 21 days to respond

Can be withdrawn, served on whole or part of the property

Entry can be 3 months from the service of a Notice of Entry

Question 10

Name some potential Heads of Claim following a CPO

Answer 10

• Temporary or permanent loss of profits
• Loss of crop
• Reinstatement of land
• Relocation cost
• Reasonable legal / surveying fees

Question 11

What is S.14 of the Land Compensation Act 1961?

Answer 11

Taking account of actual or prospective planning permission in valuing land subject to compulsory acquisition.

Question 12

What is the difference between severance and injurious affection?

Answer 12

Injurious Affection -
- Compensation for depreciation of value of retained land arising from statutory works.
- Claimable under S.10 1965 Act
- Eligibility determined by the McCarthy Rules

Severance -
Severance occurs when the retained land is severed from the rest of the property and therefore loses value.

Question 13

What is the purpose of compulsory purchase?

Answer 13

Compulsory purchase powers are provided to enable acquiring authorities to compulsorily purchase land to carry out a function which has been decided is in the public interest.

Question 14

Key legislation in relation to compulsory purchase?

Answer 14

1 - The Compulsory Purchase Act 1965
2 - The Land Compensation Act 1973
3 - Planning Act 2008 (contains important powers)

Question 15

What is the principle of equivalence in relation to compulsory purchase and compensation?

Answer 15

You should be no better or worse off in financial terms after an acquisition than you were before.

Question 16

What are the two main principles for compensation?

Answer 16

1 - Compensation where land is taken
2 - Compensation where no land is taken

Question 17

What is land taken?

Answer 17

The value of the land taken that is to be negotiated

Question 18

What is no land taken?

Answer 18

This is where compensation is payable when no land is taken but when statutory powers are exercised.

Question 19

What is disturbance?

Answer 19

This represents the costs and losses incurred as a result of being disturbed from the occupation of the property.

Predominantly only available to occupiers of a property. Sometimes available to investment owners.

Question 20

What is Betterment?

Answer 20

This is the opposite of injurious affection. There may be instances where the scheme of the acquiring authority may increase the value of the retained land.

Question 21

What is the basis of value for land taken?

Answer 21

This is based upon what the land might be expected to realise if sold in the open market by a willing seller.

Question 22

What is the “no-scheme” rule?

Answer 22

This is where the effect of the scheme underlying a CPO is required to be disregarded in assessing compensation.

Question 23

What are the three sets of rules that require the scheme underlying the CPO to be disregarded:

Answer 23

Rule 1: The scheme cancellation rules. These apply to the determination of the planning status of the land.

Rule 2: The scheme disregard rule.

Rule 3: The judicial rule to disregard increases and decreases in value due to the scheme underlying the acquisition as set out in Pointe Gourde

Question 24

What is severance?

Answer 24

Severance is when 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 25

What is injurious affection?

Answer 25

Injurious affection is the depreciation in value of the retained land as a result of the proposed construction on, and use of, the land acquired by the acquiring authority for the scheme.

Question 26

What is the home-loss payment?

Answer 26

This is an additional sum to reflect and recognise the distress and discomfort of being compelled to move out of a persons home.

Question 27

Where can the qualifying conditions for home loss payments be found?

Answer 27

Section 29-33 of the Land Compensation Act 1973

Question 28

How would you calculate betterment?

Answer 28

If Betterment exists, you would look to offset the increase in value against the compensation that is payable in respect of the land acquired.

Question 29

When can compensation be claimed for no land taken?

Answer 29

1 - A reduction in the value of land caused by the execution of public works.
2 - A reduction in the value of land caused by the subsequent use of public works.

Question 30

What is meant by “without prejudice?”

Answer 30

The use of the phrase “without prejudice” indicates that the communications is privileged and is not admissible as evidence against the party making it.

Question 31

What is blight?

Answer 31

This is where a landowner is unable to sell their property or can only sell it at a substantially reduced price as a result of the CPO.

Question 32

What is a blight notice?

Answer 32

This is when a landowner serves a blight notice on the acquiring authority seeking them to purchase the land at open market value.

Question 33

What is a purchase notice?

Answer 33

Purchase notices entitle owners of land to initiate compulsory purchase of their land by an authority and be paid compensation as it were a compulsory purchase.

Question 34

When a purchase notice would be used?

Answer 34

It provides landowners with a means of having land acquired by a local planning authority where the land has become incapable of reasonably beneficial use

Question 35

What are the main Heads of Claim?

Answer 35

1 - Land taken
2 - Severance and injurious affection
3 - Disturbance
4 - Fees

Question 36

What is the Pointe Gourde Principle?

Answer 36

Any special suitability of the land taken for the purpose of the acquiring authority is not to be taken into account. Exclude any increase or decrease in value of the land due to the scheme.

Pointe Gourde Quarrying Co Limited v Sub Intendant of Crown Lands [1947]

Question 37

What is the No Scheme Principle?

Answer 37

This is where the effect of the scheme underlying a CPO is required to be disregarded in assessing compensation.

Question 38

Level 2 examples:

Answer 38

National Grid ZP & ZPA:
Steelworks replacement scheme
Settling compensation, covering costs such as disturbance, landowners time, reinstatement, and crop loss.
All claims evidenced by quotes or the agricultural budgeting and costing book.

HS2 - Affected Landowner:
Assisted with Blight Notices.
Landowner received letter from HS2 stating intention to serve a CPO on his commercial property, but was never actually served.
Landowner enquired about right to claim losses.
HS2 cancelled but link was still to be acquired for another project.
No claim was to be considered for a commercial property until formal CPO notices were served.

Question 39

Level 3 examples:

Answer 39

Pipeline Easement Renewals CPO:
drafted CPO schedule - advised all landowner details needed to be up-to-date and titles ordered over 3 years ago would not be sufficient.
Identified unregistered areas and advised that notices would need to be erected on-site to establish landowner details.
Produced an online landowner questionnaire to confirm additional interests and details.

National Grid - Sheffield Cables:
CPO for new land and rights for a 275kV electricity cable
Assisted in drafting CPO schedule in table 2
Issuing Notices of Making
Erected and checked notices on site on a weekly basis
Removed once objection period had expired
Informed Client and confirmed CPO compliance
Worked with senior colleagues to liaise with the objectors in an effort to resolve any concerns and enable objections to be withdrawn prior to the inquiry.

Question 40

Level 3 advice given:

Answer 40

Pipeline Easement Renewals CPO:
Advised landowner details needed to be up-to-date and titles ordered over 3 years ago weren’t sufficient.
Advised notices needed to be erected to establish unregistered land parcels.

Sheffield Cables:
Advised the Client that notices had been erected, removed and have been in compliance with CPO guidance.

Question 41

Notice of making?

Answer 41

The notices of the making of the CPO invite submissions to the confirming authority.

Question 42

Objection period?

Answer 42

• Must be in writing
• within objection period stipulated in the notice (at least 21 days from the date of notice)
• Inquiry held once objection period has expired

Question 43

Difference between General Vesting Declaration and a Notice to Treat?

Answer 43

Both are very similar, but a General Vesting Declaration can obtain the title more quickly but can take longer to gain possession and for development to start. A notice to Treat has a longer process to obtain the title, but can possibly gain possession and start development earlier than a General Vesting Declaration.

Question 44

RICS guidance on Compulsory Purchase?

Answer 44

Surveyors Advising in Respect of Compulsory Purchase and Statutory Compensation (2017)