Compulsory Purchase Order

Question 1

What are the main legislations governing CPO?

Answer 1

1) Land Compensation Act 1961 = section 5 rules

2) Compulsory Purchase Act 1965 = procedure + additional compensation (McCarthy Rules) + section 8 MD

3) Land Compensation Act 1973 = part 1 claim + home loss + farm loss payments

4) Acquisition of Land Act 1981 = procedure

5) Town and Country Planning Act 1990 = all development proposals, including rights LPA to use CPOs + blight notices

Question 2

What powers are available to acquire land?

Answer 2

1) By Agreement

2) Notice to Treat followed by Notice of Entry

3) General Vesting Declaration.

Question 3

What is the process for acquiring land via the Notice to Treat/ Notice of Entry?

Answer 3

1) Notice to Treat 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) 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 4

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

Answer 4

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 5

What are the 5 (technically 6) rules of compensation in s5 of LCA 1961?

Answer 5

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 6

What are the Heads of Claim? (think to layout of LCE)

Answer 6

1) Land Taken

2) Severance and Injurious Affection

3) Disturbance

4) Loss Payments

5) Professional Fees

Question 7

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

Answer 7

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 8

What is Severance and Injurious Affection?

Answer 8

Severance - Where the land acquired has been severed from the land retained and this has caused a loss in the retained land value

Injurious Affection - Depreciation in value of the retained land as a result of the proposed construction on land acquired.

Question 9

What is Betterment?

Answer 9

Increase in value of the retained land.

Question 10

What is Pointe Gourde?

Answer 10

Increased in value of the land which the scheme is responsible for, so compensation should not be paid.

The purpose of this rule is to eliminate from the compensation any increase in value attributable to the special characteristics of land where:

(a) the land has special suitability or adaptability for a particular purpose; and

(b) that purpose is either of the following:

(i) a purpose which could not be carried out without statutory powers, or

(ii) a purpose for which there is no market apart from the special needs of a body having power to purchase land compulsorily.

Question 11

What was the case of Pointe Gourde Quarrying Co Limited v Sub Intendant of Crown Lands [1947] about?

Answer 11

Quarry acquired for the purposes of building a naval base, but that quarry included stone which had value/use to the acquiring authority in building said naval base. As whole site acquired, quarry owners could not sell the stone to the acquiring authority for the construction.

It was found as fact that only the acquiring authority, or a similar undertaker would be in a position to avail itself of this benefit, and as such any potential uplift in value as a result did not fall within the definition of market value.

Question 12

What are the loss payments?

Answer 12

i) Basic loss

ii) Home loss

iii) Occupiers loss

Question 13

What is Basic loss?

Answer 13

s33A LCA 1973

Reflect the inconvenience and disruption caused by the acquisition. You must have held an interest in the land for a year or more prior to possession.

Caps:
7.5% of the value of the interest subject to a maximum payment of £75,000.

Question 14

What is Home loss?

Answer 14

LCA 1973

To qualify for a home loss payment:

you must have lived in the dwelling, or a substantial part of it, as your only or main residence, for a period of not less than 1 year ending with the day you have to move out; and

your interest or right to occupy the property was freehold, leasehold or under certain statutory tenancies, contracts and licences (your professional adviser will be able to confirm whether any of these apply to you)

Caps:
10% of MV, subject to a minimum payment of £8,100 and a maximum payment of £81,000.

Question 15

What is Occupiers loss?

Answer 15

s33C LCA 1973

Only available to those in occupation of all or part of a building (whether they be an owner occupier or a business tenant).

Caps:
2.5% of the value of the interest
or
£25 per sq m of building taken (or £2.50 per sq m of land) subject to a minimum sum of £2,500 and a maximum payment of £25,000.

Question 16

What are the Crichel Down Rules?

Answer 16

Surplus government land acquired by, or under threat of, compulsion should be offered back to former owners, their successors or to sitting tenants.

The original rules (provided under DoE Circular 18/84 October 1992) stated the original owner or their heir in title, should be offered first refusal at current market
value.

The revised rules n Circular 06/2004: Compulsory purchase and the Crichel Down rules supersedes those which have gone before and part 2 of the memorandum includes specific guidance on the operation of the rules.

Question 17

What are the McCarthy Rules?

Answer 17

rule 1 - legal use
rule 2 -
rule 3 -
rule 4 -

s10 of the Compulsory Purchase Act 1965

Mechanism for claiming compensation where no interest in land has been acquired.

Compensation for Injurious Affection caused by the Execution of the works – NOT the use of the works
Right to compensation to anyone whose land or interest has been injuriously affected by the execution of the works
Damage must come from an interference with some right in land which adds value to the claimants property

Question 18

When should CPO powers be used?

Answer 18

Acquiring authorities should use compulsory purchase powers where it is expedient to do
so.

A compulsory purchase order should only be made where there is a compelling case in the public interest.

Question 19

What are compulsory purchase powers?

Answer 19

Powers to enable public bodies on which they are
conferred to acquire land compulsorily. Compulsory purchase of land requires the approval of a confirming minister.

Question 20

Who have compulsory purchase powers?

Answer 20

i) Local authorities (which include for some purposes national park authorities)

ii) Statutory undertakers

iii) Some executive agencies, including Homes England

iiii) Health service bodies

Question 21

What is the procedure to make a Compulsory Purchase Order?

Answer 21

Set out under the Acquisition of Land Act 1981:

1) Formulation

2) Resolution

3) Referencing

4) Making the order

5) Notification and Publicity

6) Any Objections

7) Consideration of objections

8) The Inquiry

9) The Written Representation

10) The Decision

Question 22

Tell me about Horn Vs. Sunderland

Answer 22

Principle of equivalence

‘The owner shall be paid neither less nor more than his loss’ The fundamental principle underlying the ‘Compensation Code’ is that of ‘equivalence’.

In all situations several factors need to be identified to arrive at the compensation payable. They are:

the nature of the interest being acquired and whether this is subject to a tenancy or a restrictive covenant;

the extent and condition of the property;

the use and potential changes in use of the property;

the date of valuation;

the costs and losses incurred by the owner of the interest as a result of the acquisition (so-called ‘disturbance’).

Question 23

What is a Part 1 claim?

Answer 23

Part 1 of LCA 1973

Person who has been adversely affected by the operation of the scheme to be compensated but you CANNOT have had any land taken.

You CANNOT claim for a loss of view, privacy or inconvenience caused during construction of the road.

First claim day is 366 days after opening. Claim notice can be served anytime within the 6 years following first claim date.

Question 24

What are the 7 physical factors?

Answer 24

• Smoke
• Smell
• Fumes
• Noise
• Vibrations
• Discharge of solids and liquids onto the grounds
• Artificial lighting

Question 25

What is the main RICS documentation covering CPO?

Answer 25

RICS Professional Statement ‘Surveyors advising in respect of compulsory purchase and statutory compensation’ (2017).

Question 26

Which VPGA covers CPO?

Answer 26

RICS UK VPGA 16 Valuations for compulsory purchase.

Question 27

What is an Advanced Payment Report?

Answer 27

s52 LCA 1973

APR - Land or property is taken by the Acquiring Authority but the claim for compensation has not been settled, claimant can make claim for an advance payment on account of any compensation you are entitled to.

The level of advance payment is 90% of either:

the agreed sum for the compensation; or

the acquiring authority’s estimate of the compensation due, if the acquiring authority takes possession before compensation has been agreed.

Question 28

What is Material Detriment?

Answer 28

Claimant able to serve a counter-notice within 2 months of a CPO notice requesting the acquiring authority purchase the retained land if found that the part being compulsorily acquired cannot be taken without causing material detriment to the remainder, MD meaning usually that is no longer suitable or able to be farmed or used for its previous use. S8 of CPA 1965 gives right for Upper tribunal to require the AA to purchase land caused MD to as part of scheme.

Question 29

What is a blight notice?

Answer 29

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. Eg counter-notice within 2 months of receipt

Rules for eligibility on Statutory Blight are set out in s149 of Town and Country Planning Act 1990

For owner occupiers only (not on let property)

Grounds for AA countering (s151)

The person who served the blight notice can then refer the matter to Tribunals service within one month of receiving the counter notice.

Question 30

What are accommodation works?

Answer 30

Works which the acquiring authority may carry out in order to reduce the effect of severance and/or injurious affection on land.

Question 31

Can challenges be made to CPO’s?

Answer 31

After a compulsory purchase order (CPO) has been made and confirmed, a legal challenge can be made within six weeks in the High Court, on the grounds that the:

powers invoked are ultra vires (not within the powers of the authority to make the CPO)

procedural rules have not been followed correctly

minister or the inspector has not acted properly in reaching a decision, for example, there was no evidence to support the decision, or irrelevant factors were taken into account.

Question 32

What did the Housing & Planning Act 2016 bring in?

Answer 32

Powers of Entry for Survey Purposes
Changes to Advance Payment process
Dispute resolution
Counter-notice provisions

Question 33

What did the Neighbourhood Planning Act 2017 bring in?

Answer 33

Temporary Possession
“No Scheme” principle
Treatment of Minor Tenancies
Repeal of Part 4 of Land Compensation Act 1961