Read our linked article - Part 2/2: Compulsory Purchase - Compensation for Businesses by Phil Osborne

What is a Compulsory Purchase Order?

A Compulsory Purchase Order (CPO) grants public bodies such as government departments, local authorities, highways, regeneration agencies and utility companies (known as the Acquiring Authority), the right to compulsorily acquire land for a specific public purpose. Examples of the purposes for which CPOs may be sought include road or rail improvements and urban regeneration projects.

Due to the potentially draconian nature of a CPO, before a CPO can be made the Authority will need to demonstrate that:

1. It is authorised by statute to purchase land compulsorily for a specific purpose and that a CPO is necessary to achieve that purpose;

2. There is a compelling public interest case that justifies the exercise of compulsory purchase powers; and

3. The finance necessary to implement the CPO and the scheme it seeks to deliver is (or is likely to be) in place within a reasonable timescale.

What is the procedure for obtaining a CPO?

1. The Authority will carry out a feasibility study to determine the extent of the land that is required for a particular scheme (for example, building a new leisure centre).

2. If your land is identified as being required, the Authority will usually attempt to agree terms with you for the purchase of your property before it resorts to exercising compulsory purchase powers. Therefore, it is likely that you will become aware of the Authority’s plans to acquire your land before you receive notice of a proposed CPO.

3. Once the Authority has identified the land it requires, it will pass an internal resolution authorising the use of compulsory purchase powers for the scheme; this will define the land (usually be reference to a plan) and state why it requires the land.

4. The Authority will then gather further information about and identify everyone who has a legal interest in the land; this includes freehold and leaseholder owners, tenants and occupiers. Usually, the Acquiring Authority will serve a request for information form (known as a “requisition for information”) on everyone it believes owns or occupies some part of the land necessary for the scheme. The request will ask for details of the interest in the land, whether anyone else holds an interest (such as a tenant or occupier) and the boundaries of the land. A period of at least 14 days must be given to respond to the request, although it can take longer to gather all the information. It is important that the request is answered carefully because a failure to provide the information or making a false or reckless statement is a criminal offence. Therefore, if you receive a request for information we recommend that you seek legal advice.

5. Once the Authority has all of the information it needs about the interests in the land it will make the CPO. When making the Order the Authority will also prepare a Statement of Reasons that sets out why the proposed Scheme and the CPO meet the desired public interest. The Authority will then serve notices on all owners, leaseholders and tenants and occupiers of the land affected by the CPO who may have the right to claim compensation. The notice will specify a period of at least 21 days from the date of the notice in which any objections may be made to the CPO.

Can I object to a proposed CPO?

Anybody can object to a CPO, even if they have not been personally served with notice of it. The only requirement for the notice is that it is in writing; it does not need to be a particular format. However, the grounds on which an objection to a CPO can be made are limited.

If you have received notice of a CPO and wish to object you should seek legal advice immediately because an objection must be made within strict timescales.

If valid objections to the CPO are received, there will be a Public Inquiry scheduled before a Planning Inspector. Alternatively, objections can be considered by the Planning Inspector through a written representations procedure.

Following the Public Inquiry, the Planning Inspector will prepare a report to the Secretary of State or confirming Minister making recommendations whether the CPO should be confirmed as drafted, modified or rejected.

What happens after the CPO is made?

Notices are placed in the newspaper, affixed to the land and served on every person with an interest in the property affected. There is then limited window of 6 weeks within which the validity of the CPO may be challenged by judicial review.

If the CPO is confirmed, the powers it grants to the Authority must be exercised within 3 years of the date of the Order.

How does the Authority take possession of my property?

After confirmation of the CPO, the Authority can acquire the land in a number of ways. These include:

1. By negotiated agreement with land owner.

2. By serving a document known as a Notice to Treat followed by a Notice of Entry.

A Notice to Treat is effectively a notice issued by the Authority stating that it is willing to negotiate with the landowner for the purchase of the land and to pay compensation.

If you receive a Notice to Treat, you have to respond to the questions it asks and submit a claim for compensation within the time period specified in the notice, which will usually be not less than 21 days. There is no particular format that the notice of claim must take.

If no notice of claim is submitted within the timescale specified in the notice, the Authority can refer the question of the amount of compensation to be paid to the Lands Tribunal (see below) or withdraw the Notice to Treat and abandon the proposed purchase. If the Authority makes a reference to the Lands Tribunal, then any failure to comply with the timescale for submitting a claim may result in the landowner not being awarded some of its costs or having to pay some of the Authority’s costs of the Lands Tribunal proceedings.

After serving a Notice to Treat, the Authority can serve a Notice of Entry which must specify a date at least 14 days away when the Authority can enter onto the land and take possession of it (although the legal title to the land will not pass at that stage).

3. By Making a General Vesting Declaration (GVD).

A GVD is an alternative to the Notice to Treat / Notice of Entry procedure and not only gives the Authority the right to enter and take possession of the land but also results in the title to the property being acquired by Authority.

If the Authority uses the GVD procedure, the land owner will first receive a notice called a “Form of Statement of Effect of a General Vesting Declaration”. The Authority can then execute the GVD two months after that notice. Once the Authority has executed the GVD the land owner will receive a further notice confirming the GVD has been executed and specifying a date not less than 28 days away, when the land will be transferred or vested in the Authority (this is known as the ‘Vesting Date’). The Vesting Date is the date on which the Authority is then entitled to enter and take possession of the land.

The Vesting Date is also significant as it is the date from which the limitation period for the land owner to bring a claim for compensation in the Lands Tribunal under this procedure starts to run (see below).

What should I do next?

Read our linked article - Part 2/2: Compulsory Purchase - Compensation for Businesses by Phil Osborne