Compulsory purchase orders explained

You may welcome development and regeneration in your local area as it can transform it for the better. However, you may not be so happy about it if you have to move out of your home for the project to be completed. Dealing with a compulsory purchase order can be worrying and stressful.

The process relating to compulsory purchase orders is complex but there are procedures that have to be followed and you may be able to influence what happens. This guide will help you understand how it works so you can achieve the best outcome.

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A compulsory purchase order is a way for certain bodies such as councils to legally buy land without the owner’s consent to deliver projects in the public interest. These bodies are known as acquiring authorities.

Owners or occupiers of the land could be residents, businesses or farms. It could have homes, shops or factories on it or be land used for agriculture.

The CPO doesn’t in itself allow the acquiring authority to force you to sell your home. Once the authority makes the order it must be approved by a government minister or an inspector appointed to make the decision on their behalf.

There’s a lengthy process with a number of stages. It could be several years from when you first hear about a proposal to buy your land to the authority actually taking possession of your property.

These are the stages of the CPO process. How long it takes depends on the circumstances and can vary widely:

1. The acquiring authority considers what land is needed for the project and attempts to buy it by agreement.

2. The authority decides to use its compulsory purchase powers and gathers detailed information about who owns the land. It then makes the CPO to the ‘confirming authority’ (the government minister or inspector).

3. If your home is affected by the CPO, you’re invited to make objections to the confirming authority within a specific period. This must be at least 21 days.

4. The confirming authority considers the CPO. If there are objections, this is usually done through a public inquiry.

5. The confirming authority makes a decision. It will either confirm, modify or object to the CPO.

6. The acquiring authority takes ownership of your property. You’re entitled to be paid the market value for it. The effect the development project will have on the value is disregarded.

CPOs help bodies deliver projects that are in the public interest and will bring positive change to an area. This could be socially, economically or environmentally. However, CPOs are meant to be used as a last resort. The acquiring authority should try to come to an agreement with the owner of the land to buy it first.

Compulsory purchase powers are granted by a number of different laws. The ones used most often are:

• The Transport and Works Act 1992. This allows for transport projects to be built and operated

• The Planning Act 2008. This relates to building and operating major infrastructure projects

• Acts of parliament authorising specific projects, such as the Channel Tunnel and Crossrail

These Acts set out which bodies have compulsory purchase powers. They include local authorities, government departments, utility companies and transport bodies.

The procedures for CPOs are set out by the Acquisition of Land Act 1981. There may be differences depending on the legislation being used to grant the powers but there are elements that apply to every case. You can object and challenge decisions with all CPOs. Your right to compensation – in other words, to be paid for your property – is the same too.

The types of projects where compulsory purchase orders can be used are wide ranging. Examples include:

• Improving roads

• Building new housing

• Installing electricity pylons

• Creating flood defences

• Improving sewers or water mains

• Expanding airports

• Building shopping centres

• Repairing or demolishing dangerous buildings

• Looking after listed buildings

Any project that will benefit the public could potentially use a CPO as a tool to help with its delivery. The body involved just needs to have compulsory purchase powers according to the law.

Who pays the legal fees in a forced house sale?

If you want to sell your home, you can try to negotiate with the acquiring authority to buy your property early before the CPO is submitted. Another possibility is serving a ‘blight notice’ on the authority so you can sell it earlier. This is where the value of your property is reduced by the threat of a CPO.

Selling through a CPO can affect how much you end up getting for your property. This is because the market value you’re entitled to doesn’t take into account how the completed project would affect the value of your property. The valuation is done as if the project didn’t exist – known as the ‘no scheme principle’.

If you were selling your property on the open market, potential buyers might be willing to pay a premium because of the value a local development project would add. Examples of projects likely to boost value include better transport links and town centre regeneration.

On the flipside, if the value of your property would decrease as a result of the project this isn’t taken into account either. Reasons why a project might reduce value include that it would increase traffic or the area would become more crowded.

With a CPO, however, you can also claim compensation for the expenses involved in having to move out of your home, such as the cost of:

• Removals

• Legal fees, survey fees and stamp duty when you buy a new home

• Altering items, such as curtains, to fit your new home

• Redirecting your post

• Disconnecting and reconnecting services

You have a duty to minimise your expenses as much as possible. For example, by getting a quote from more than one removal firm. It’s important to keep detailed notes of all your costs and losses so you can claim compensation. You can also claim for the cost of professional advice.

You may become aware of a CPO in your area when the acquiring authority starts planning its project. During this stage, it might visit the land it could need to deliver the project and consult owners and occupiers about its proposals.

The acquiring authority must contact you directly if your property is affected. It also has to publish notices in the local press and place notices on or near the land it wants to buy.

If you hear there may be a CPO affecting your area but you don’t know who the acquiring authority is, you should first contact your local council. It can let you know whether it intends to use its compulsory purchase powers or whether it knows of other bodies that are. Once you find out who the acquiring authority is, you can contact it for more information.

You can view a register of decisions made about CPOs relating to housing, planning and regeneration projects submitted to the relevant Secretary of State on Gov.uk. This includes grounds for any objections that were made.

If you find out that your home is affected by a CPO, first look for a qualified professional who can give you advice, such as a chartered surveyor or solicitor specialising in CPOs. They will be able to advise you on your rights and help you object and negotiate.

You can find a surveyor with experience of CPOs on the Royal Institution of Chartered Surveyors website. To find a solicitor visit the Law Society website.

Another source of information and advice is the Compulsory Purchase Association.

Once you receive a notice that a CPO affecting your property is about to be submitted, you can make an objection. You must do this in writing within the specified number of days.

You could object for the following reasons:

• You agree with the scheme but think minor changes should be made to reduce its impact on you

• You think the scheme should be located somewhere else

• You object to the scheme

The acquiring authority will then usually try to negotiate with anyone objecting. It could agree to make changes or limit the use of its powers so the objections are withdrawn. If any objections aren’t withdrawn, the case will be considered in detail by the minister involved or an independent inspector they appoint.

If the CPO is then confirmed, you can still challenge its validity in the High Court if there are grounds to do so. These are:

• The powers granted go beyond what’s allowed by law

• The rules haven’t been followed correctly

• The confirming authority hasn’t acted properly in making the decision