COMPULSORY PURCHASE

UPDATE

RICS, Ludlow

5 February 2015

Charles Cowap

Compulsory

purchase

procedures and

preliminaries –

brief summary

• Acquiring authority makes CPO and other cpscheme (e.g. highway scheme)

• Objections lead to public inquiry

• CPO confirmed by minister or sometimes acquiring authority (2004 Act)

• AA proceeds by Notice to Treat or Vesting Declaration

• Notices to Treat served on all substantial interests

• Responses to Notices to Treat include claimants’ details and notification of claim

• AA agrees compensation or serves Notice of Entry

• Accommodation works agreed

• Advance payments (90%) available

• Importance of Enabling Act

• Consider enlarging Notice to Treat by Counter Notice?

• Consider Blight Notice?

CLAIMS

Owner-occupiers

• Land Taken

• Severance & Injurious Affection

• Disturbance

Owners (not in occupation)

• Land taken

• Severance and Injurious Affection

• Very limited disturbance

Tenants

• General basis for longer-term tenants

• Notice to Quit or Notice of Entry?

• s20 (CPA 1965) basis for annual/shorter tenancies

• ‘value tenant’s interest’ & other heads of claim (- 4 yrs rent reorganisation payment, s12 Agriculture Act 1968)

No land taken

• Execution of works: McCarthy rules

• Use of works: Part One claim

Valuation dates

• Entry

• Settlement/LT Award

• First anniversary of ‘qualifying date’ for Part One claims

Other items of claim

• Home Loss payments

• Farm Loss payments abolished

• Basic Loss payments

• Occupier Loss payments

• Valuer’s fees: was: Ryde’s Scale (1996); now: Quantum Meruit

• Disputed compensation to Upper Tribunal (Lands Chamber) (formerly the Lands Tribunal)

SEVERANCE AND INJURIOUS

AFFECTION

• Right to enlarge Notice to Treat for part of house, manufactory or garden - material detriment test

• Right to enlarge Notice to Treat/Entry for part of farm - reasonably capable of being farmed test

• Small severed areas of land (<0.5 acre)

• Betterment?

Procedural

Aspects

Making and

confirmation of

CPOs

Compulsory Purchase Order

Specifies land

• Subject to Minister's confirmation

• Rights of Objection

Procedure:

• Acquisition of Land Act 1981

• covers CPOs under most public general acts

Draft CPO

Advertised

Notice to

• owners, lessees, occupiers

• anybody who would be entitled to notice to

treat, e.g. mortgagee, trustee

• anybody entitled to s10 claim under

Compulsory Purchase Act 1965 (injurious

affection from carrying out works)

CPO Notice states

• land required

• purpose of CPO

• where copies and plans can be

inspected

• Time limit for objections

– (at least 21 days)

OBJECTIONS TO DRAFT CPOs (ALA

1981)

Made to confirming minister

• may require them in writing

• can ignore any which can be dealt with by Lands

Tribunal (Upper Tribunal Lands Chamber)

• Public local inquiry (or hearing) if objections not

withdrawn.

• May also be dealt with by written representations

or private hearing

– (Planning and Compulsory Purchase Act 2004)

‘RELEVANT OBJECTIONS’ UNDER

PLANNING AND COMPULSORY

PURCHASE ACT 2004

• Concept of Relevant Objection i.e

• Objection from anybody entitled to be

notified of CPO (as above)

CPO can be confirmed without inquiry if

• No relevant objections

• Or Relevant Objections are withdrawn

CPO can be confirmed in stages

Acquiring Authority may confirm CPO itself

in limited circumstances

• Prior approval from Confirming Minister

• No objections

• No modifications

• Cannot be confirmed in stages

Compensation Aspects

following 2004 Act

1. Basic Loss

Payments

2. Occupier Loss

Payments

3. Abolition of Farm

Loss Payments

Basic and Occupier’s Loss Payments

• Amendments to LCA73

Basic Loss Payment

S106/s33A

• 7.5% of value of interest taken

• Maximum £75,000

• Freehold interest or tenancy of more than

one year seems to qualify

Occupier’s Loss Payment, Other Land

s107/s33C

Maximum of

1. 2.5% of value of interest

2. Land Amount,

– £2.50/square metre or £2,500 whichever is more

where all the land is acquired.

– £2.50/square metre or £300 whichever is more

where only part of the land is acquired

3. Buildings Amount, i.e. £25/square metre GEA

• Total claim limited to £25,000.

Occupier’s Loss Payment, Agricultural Land

S107/s33B

Maximum of

1. 2.5% of value of interest

2. Land Amount, i.e. £100/ha up to 100 ha, and £50/ha for next 300 ha (to maximum claim of £25,000) OR £300 if more

3. Buildings Amount, i.e. £25/square metre GEA

Total claim limited to £25,000.

or

• payment under s12 Agriculture (Miscellaneous Provisions) Act 1968

• Both landlords and tenants may qualify for Basic

Loss payments in appropriate circumstances

• Strict time limits for payment

• Advance payments available

• No payment where CP due to owner’s neglect,

e.g. damage to listed building, unfit housing etc

• Discretionary power where acquisition by

agreement – practical point

Relationship to Home Loss Payment

• Loss Payments and Home Loss Payment may be paid together

– E.g. acquisition of farm or mixed hereditament

• Home Loss Payment calculated first, based on value

of home

– HLP = 10% of MV

– £4,900 to £49,000 range

• Value of home DEDUCTED from value of entire

property to arrive at Loss Payment

Home Loss Payments

wef 1 2014

Statutory Instrument 2014 No. 1966

The Home Loss Payments (Prescribed

Amounts) (England) Regulations 2014

• Min £4,900

• Max £49,000

• Tenants: £4,900

Planning Act 2008 Localism Act

2011• Infrastructure Planning Commission (IPC)

becomes part of Planning Inspectorate

• Nationally Significant Infrastructure Projects

(NSIPs)

• National Policy Statements

• Development Consent Orders

• Compulsory Acquisition Powers

26

NSIPs

• Generating stations

• Cables and Pipes

• Gas storage

• Highways

• Airports

• Harbours

• Railways

• Dams and water transfer

• Hazardous waste and waste water

• Size thresholds

27

The Application Process

28

1. Pre-

Application2. Acceptance

29

3. Pre-

Examination4. Examination

30

5. Decision 6. Post-decision

Pre-application: Adviser

• Procedural advice

• Information re. Land tenure and

occupation: 14 days deadline

• Consultation responses: 28 days

• Pre-entry surveys and compensation

claims

• Early alert to compulsory acquisition

31

2. Acceptance by IPC

• IPC time period 28 days to

accept or reject on grounds of

adequate consultation and

quality

32

Rookery South, Bedfordshire

Waste Combustion Plant, 65 MW,

Bedfordshire

First Application and DecisionDeveloper’s Artist’s Impression

33

3. Pre-Examination: Adviser

• Register as an ‘interested party’

• Make ‘relevant representation’

• Initial representations – in outline– Principal arguments

– NOT merits of NPS, compensation issues

• Respond to published representations: 21 days

• Preliminary meeting

• Clarify role: representative, expert witness

• Working up detailed representations

34

4. Examination: Adviser

• Preparation of detailed submissions: 28 days

• Preliminary hearings: procedures, requests for expert witness

• Respond to other submissions: 21 days

• Hearings: representative or expert witness

• Request compulsory acquisition hearing

• Respond to local authority Local Impact Report

• Land Acquisition negotiations

• Resolution of acquisition issues via ADR or Compulsory Acquisition Hearings

35

5. Decision: Adviser

National Policy Statements

• Energy

– Overarching

– Renewables

– Fossil fuels

– Oil and Gas

– Electricity network

– Nuclear

– Approved on 19 July

2011

36

6. Post-decision

• Legal challenge

37

.. And what IPC does not cover:

• Infrastructure below the NSIP thresholds

– Lower voltage electricity lines

– Local highways

– Smaller pipelines etc etc

• Proposals covered by Hybrid Bill

proposals

– Eg HS2, the high-speed northern rail link

38

IPC: All Change!• Localism Act 2011

– Powers and procedures transferred to Major Infrastructure Planning Unit within Planning Inspectorate

– All decisions will be taken by ministers:Commissioners will recommend based on National Policy Statements

– NPS therefore retained

Problems with tree rootsWright v Horsham DC [2011] UKUT319 (LC)

• Compensation for refusal of TPO consent to fell 3 oak trees

• Claims for underpinning work of £23,253.25 + £750 for distress etc

• Awarded in full– Cost of underpinning should be in

reasonable contemplation when consent is refused

More tree roots

Halifax Insurance v Teignbridge DC [2011] UKUT 213 (LC)

• TPO: Refusal of consent to thin crown on tree in 3rd party ownership

• Compensation awarded £7,602 for remedial works and preventive measures

• 3 tests for compensation:– Cause?

– Compensation reasonably foreseeable?

– General rules on damages

Staying underground

O’Donoghue & others v SoSfor Transport [2011] UKUT 203 (LC)

• Subsoil beneath 26 properties in North and East London

• £50 each nominal payment for ‘tube’ of subsoil for underground railway – the St Pancras link to the Channel Tunnel Rail Link (‘HS1’)

Bocardo v Star Energy

High Court 2008

• Surrey oilfield

• Bocardo Estate, Oxted

• Star Energy: Petroleum Production

Licence

• 1990 – 2007: 1 million barrels +

• 800 feet deep

• Trespass? Value of Wayleave?

Bocardo v Star Energy

27.8.2008

EWHC 1756 Ch

Bocardo Estate

• Trespass

– 17 years without being noticed

– Simple ownership of minerals does not

convey right to enter and remove them

• Wayleave

– 9% of value of the oil (£6.9 million)

– Limitation – deliberate concealment (by Star)

would have prevented a limitation period

defence

Bocardo (2)

The Court of Appeal Supreme

CourtCourt of Appeal

• Supported finding that oil extraction was a trespass, even though B’s use and enjoyment was not affected ‘one iota’

• Compensation: based on s8(2) Mines (Working Facilities and Support) Act 1966.

• Star proposed £82.50: £50 for a deep tunnel plus special purchaser uplift plus 10%

• CA awarded £1,000

Supreme Court [2010] UKSC 35

• Confirmed trespass: unanimous all 5 judges

• Nominal award of damages only: 3:2 majority

And sticking with the Supreme

Court

Transport for London v Spirerose Ltd [2009]UKHL 44

• A lengthy case

• Concluded that hope value, rather than full development, value should be reflected in award

• Lengthy consideration of Point Gourde, value to owner and how to discount value attributable solely to the scheme

Ongoing effects of Spirerose

Persimmon Homes (Midlands) Ltd v SoS for Transport [2009] UKUT126 (LC)

• Four key questions– Would there be a sustainable highways objection

in the ‘no-scheme world’?

– Would there be a sustainable planning objection in the ‘no-scheme world’?

– If there was an objection, is there hope of futuredevelopment?

– Should betterment be set off against contiguous land?

Ignoring the effects of the scheme

Are we to imagine

1. That ‘the scheme’ had never been thought of?– In other words unravel several

years’ worth of policy development

OR

2. That ‘the scheme’ has been ‘cancelled’ immediately prior to the valuation date?

Statutory Planning AssumptionsWhat’s the point of these?

• They set the valuation ‘scene’ – a series of assumptions about planning uses in the absence of compulsory purchase

Where were they found?

• In sections 14-17 of the Land Compensation Act 1961

Where do we find them now?

• Section 232, Localism Act 2011has inserted new ss14, 16 and 17 in LCA 1961 and repealed s15.

The New Statutory Planning

Assumptions• Regard to any planning permission in force at

valuation date– On relevant land or other land

• Regard to prospect of planning permission, subject to assumptions:– Scheme has been cancelled on the launch date;

– No action taken by AA for the scheme (eg acquisitions);

– No prospect of the same or a similar scheme in exercise of a statutory function or with CP powers;

– For highway schemes, that no highway will be built to meet the same needs

• NB Application to other land

New Section 14, LCA 1961

Also repeals old Section 15 LCA 1961

Planning assumptions

continued• Assume planning permission for the AA’s

proposals– No change here

– Note complementarity with Rule 3, Section 5, LCA 1961:

• Any value attributable to scheme requiring statutory powers is left out of account

• Assumption of PP for development within Sch 3, TCPA 1990 is abolished– Mainly concerned buildings which had stood on sites

before 1947 TCPA – an anachronism

New Section 15, LCA 1961

Section 17 Certificates of

Appropriate Alternative

Development (LCA 1961)

• Certificate must now relate to valuation date, not application date.

• Appeals now lie to the Upper Tribunal Lands Chamber instead of Planning Inspectorate

The Creeping Impact of Localism

on Land Management• DCLG Circular 06/04: Compulsory Purchase and

the Crichel Down Rules– Amended in 2011, p57

• Local authorities must consider requests to use CP powers for community assets that are in danger of being lost, particularly if they come from voluntary or community organisations

• Link to Assets of Community Value (Localism Act) and proposed Local Green Area Designations –(Nat Env White Paper): Beware!

A fourth head of claim?

Should we be formulating a fourth head of claim?

• Valuation of land taken

• Severance and Injurious Affection

• Disturbance

• Matters not directly based on the value of land?

Pattle and Pattle v SoS for Transport [2009] UKUT 141 (LC)

• Rule 6, s5, LCA 1961– Compensation for Disturbance or any other

matter not directly based on the value of the land

• Lost rent not directly based on value of land (???)– As a disturbance claim, the owner was not in

occupation to qualify for compensation

– But as any other matter, possession is not required in order to claim

BLIGHT

Blight has a strict meaning

in compulsory purchase and

planning

Blight Notices

Procedures

Compensation

Discretionary

Blight

Blight procedures are used to

force authority to purchase

property from you: compulsory

purchase in reverse

We need to consider

• Who qualifies: Qualifying persons

• What is blight?

• Procedural aspects

• Compensation

To qualify for statutory blight

protection you must be one of:1. Resident owner-occupier of

dwellinghouse

2. Owner-occupier of hereditament of less than £34,800 annual value (= rateable value) (England and Wales, £30,000 in Scotland)

3. Owner-occupier of agricultural unit

The property must be BLIGHTED

in whole or part• Schedule 13, Town and

Country Planning Act 1990 (as amended) e.g.

– Roads

– Designated in development plan for public authority functions

– Draft CPO, or allocated in Special Act

AND

REASONABLE EFFORTS TO

SELL

• Must have FAILED, (other than at substantial discount)

Requirement to market property does NOT apply if:

• CPO has been confirmed

• Special Act shows land required

Procedures

• Blight Notice

served on

• Relevant authority

– (i.e. authority which

would have CP

powers)

Authority Action on receipt of blight

notice

• Accepts notice, OR

• serves Counter-Notice

– 2 month time limit for counter-notice, otherwise blight notice becomes valid

Reasons for valid counter-notice

• No blight

• No qualifying interest

• No interest

• No intention to acquire

• No intention to acquire in next 15 years

• Intend to buy only part of the property

Upper Tribunal (Lands Chamber)

Claimant refers notice & counter-notice to UT (LC) (formerly Lands Tribunal)

2 month time limit

UT (LC) confirms validity(or not), in whole or part

Exercise: extent of blight notice

Do you serve Notice for whole of

property or just the area affected

by the draft CPO?

Material detriment: s8, Compulsory

Purchase Act 1965• Material detriment test

where part of a ‘house, building or manufactory’ required for compulsory purchase.

• In CP generally, cannot be required to sell part of a ‘house etc’ if there is serious affect on amenity or convenience

Effect of confirmed Blight Notice

• Relevant authority deemed to have served Notice to Treat

• Which leads to compensation claim under usual headings, e.g.

– Land taken

– Severance & injurious affection

– Disturbance

– Home Loss payments (since 1991), Basic and Occupier Loss etc

Farms and Blight

• Owner-occupier of agricultural unit must have occupied whole of unit

– Including dwellings and buildings occupied for purpose of farming

• Section 158 1990 Act: deals with Affected Area and Unaffected Area of farms

• Unaffected Area must not reasonably [be] capable of being farmed

Reasonably capable of being

farmed• A physical not an economic test

– Eg Johnson and Johnson v North Yorkshire

• The unaffected area is considered with other relevant land

– Land in the same agricultural unit

– Land in another agricultural unit of which claimant is ‘owner’

• Freehold or lease > 3 years unexpired

Agricultural Unit

Land which is

occupied as a unit for

agricultural purposes,

including any

dwellinghouse or other

building occupied by

the same person for

the purpose of farming

the land.

So Dealing with a Farm

• Establish Blight – reasonable effort to sell needed?

• Identify Affected and Unaffected Land

• Identify extent of agricultural unit and any other agricultural units

• Form view on whether unaffected land is incapable of reasonably being farmed – with other relevant land in same ag unit or other ag unit with owner’s interest

• Serve Blight Notice in respect of whole agricultural unit

• Wait up to 2 months for counter-notice

• Consider grounds of counter-notice

• Refer to Upper Tribunal (Lands Chamber) within 2 months

• UTLC confirms in whole or part depending on ‘reasonable capability of being farmed’

• Claim compensation on basis of deemed Notice to Treat

Compensation in farm claims

• Usual headings: land taken, S&IA,

disturbance, Basic and Occupier Loss etc

• HOWEVER

– Compensation for unaffected land

– Limited to existing use value (s158, 1990 Act)

Discretionary Blight

• Much more vague area

• Discretionary Blight provisions in Highways Act, Planning and Compensation Act 2004 and Land Compensation Act 1973, s26

• Cover: – Land which is seriously affected by the carrying out of

the works

– Mitigation of adverse effects arising from the existence or use of public works

– From time proposals are published

A discretionary power• Limited guidance

• Blight by proximity for roads– Within 100 m of centre line

– Reasonable efforts to sell• 20 weeks marketing

• Offers at least 5% below MV

• Moving for specific reasons: work, dependent relations etc

• Qualifying Interests as Statutory Blight

HS2

• Phase 2

Exceptional

Hardship

Compensation

Scheme

Coming to a home

near you!

Crewe

Northwich

Eligible?

• Owner occupier private residential

property

• Owner occupier business premises RV up

to £34,800

• Owner occupier agricultural unit

• Mortgagees in possession

• Personal representatives – deceased had

qualifying interest

Criteria

1. Property type and rights therein

2. Location1. Close to route: likely to be adversely affected

2. But not over tunnel sections

3. Efforts to sell1. Market for 3 months

2. No offers within 15% of realistic asking price

4. No prior knowledge of Phase 2 when purchased

5. Exceptional hardship

Stats on Phase 1EHSOutcome EHS Criteria

1 2 3 4 5

Accept 367 273 210 390 129

Reject 23 117 180 0 261

Total 390 390 390 390 390

EHS Criteria

1 Property type and interest

2 Location of property

3 Efforts to sell and impact of blight

4 No prior knowledge of HS2

5 Exceptional hardship

• 88% of accepted applications were within 400 m of route

• 98% of rejected applications were more than 200 m from route.

• 29 applications were accepted despite not meeting all the criteria (n=390)

• 0/4commercial applications were accepted

• 101/372 residential applications accepted

• 3/14 agricultural applications accepted

• Overall 104/390 applications accepted

Towards Formal CP&C for HS2

No

compensationEHS Statutory blight

Formal acquisition and

compensation procedures

Discretionary Blight Part 1

S10/McCarthy Claims

SofS Safeguarding

Orders

Hybrid Bill ~

Statutory Blight

(Sch13, T&CPA1990)

Queens Speech

9 May 2013HS2 Hybrid Bill

• Legal powers for compulsory purchase

• Deemed planning permission to construct and maintain the railway

High Speed Rail (Preparation) Act 2013

• Authorise govt expenditure

• Allow expenditure on design, ecological surveys and other prep work

• Require expenditure to be reported

• “Demonstrate Parliament’s backing for cracking onwith this vital project which already enjoys cross party support”

Current ‘Schemes’ for HS2

Blight

Rural Support Zone

• 60 – 120 m in rural areas

• Owner occupied houses, small businesses

and farms

• Sell for unblighted value plus some costs

• Or 10% cash payment to stay put

Home Owner Payment Scheme

• Home Owner Payment

• £7,500 to £22,500 (banded)

• Comes into effect after Royal Assent

Need to sell Scheme (replaces EHS)

Express Purchase Scheme

• Applies in Safeguarded Zone

– 60 m

– Since April 2014

• Streamlined purchase at unblighted value

+ 10% (max £49,000)

• 60 properties worth £54.2 million

purchased under EPS by December 2014

Total property purchase HS2

December 2014

• Statutory blight: 60

• EHS Phase 1: 132

• EHS Phase 2: 41

• Total 233 properties, £157.4 million

Fee case Joshua v Southwark

• Fee of £31,607 on claim of £129,000

• Reduced to £3,500– Time allowed

– Fee rates of £150 and £200 per hour

Brickkiln Waste v NI Elec Board

• Necessary wayleave

• No evidence of actual devaluation

• Nevertheless some injurious affection

RAMAC v Kent CC

• Value of land taken existing use

• Rest of impact IA

Contact DetailsTranslating new knowledge for rural professional

practice

cdcowap@gmail.com

07947 706505

Twitter: @charlescowap

Blog: http://charlescowap.wordpress.com/

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