A Compulsory Purchase Order is an order served on a property owner by the Local Authority or other Government Agency (we will refer to these as ‘Acquiring Authorities’) forcing the property owner to sell the property to them.
The Compulsory Purchase powers exercised usually by the Local Authority or other Government Agency are designed to enable the Acquiring Authorities to buy up land for the purpose usually of clearing the way for an infrastructure scheme ( railway, road and so on) or for the regeneration of an area (for example, clearing slums to make way for new housing). The key element is that the Acquiring Authority must show that the scheme is in the ‘Public Interest’ before they can use their Compulsory Purchase powers.
The two most commonly used Compulsory Purchase powers are:
A Compulsory Purchase Order based on a specific Act of Parliament ( an example here is HS2); and
An Order under the Transport and Works Act 1992
For this Article we will concentrate on Compulsory Purchase Orders.
The Stages Involved in a Compulsory Purchase Order:
Acquiring by Agreement
Before a Compulsory Purchase Order is applied for, the Acquiring Authority will usually attempt to purchase the property by coming to an agreement with the owner of the property. If the owner is aware that their property is in an area which may be subject to a Compulsory Purchase Order, for example, if they know the Local Authority is considering building a new road through the area, it is prudent to contact the Local Authority and see if they would be inclined to purchase the property by agreement – the property owner is likely to get the best price for their property before the Compulsory Purchase Order is confirmed.
The Formulation stage is the first stage in the process of a Compulsory Purchase Order. This is when the Acquiring Authority will decide which land is required for the infrastructure project or housing scheme. It is at this stage that a feasibility study will take place and boundaries will be defined.
This is likely to be the first time that property owners in the affected areas become aware of the pending Compulsory Purchase Order and this is when the property owner may have a chance of entering into an agreement to acquire.
There are statutory powers that may be used to enable the Acquiring Authority to enter the property to obtain information and conduct surveys.
This is the second stage of the Compulsory Purchase Order process. This is the point where the Aquiring Authority sets out a formal resolution to use the Compulsory Purchase Powers. The formal resolution with accompanying reports will then be considered by a committee, usually of the Local Authority, who will then make a decision as to whether or not Compulsory Purchase Powers can be used.
Referencing is the third stage in the Compulsory Purchase process. At this stage, the Acquiring Authority collect and record information on land ownership and occupation – identifying everyone that has a legal interest in the property be it a Freehold, Leasehold or merely a tenancy. To obtain this information they will serve a ‘requisition for information’ form on all occupiers of the property.
Creating the Compulsory Purchase Order.
Once the Referencing stage is completed and all the information collated, the Acquiring Authority is reading to make the Compulsory Purchase Order.
The land to be acquired will be identified in the heading and the main body of the Order will set out the details of the Act under which the Compulsory Purchase Order is being served and the powers that are being used.
As an appendix, the Compulsory Purchase Order will contain a schedule detailing all the properties and land to be acquired and full details of the ownership and legal interests in those properties and land. Each plot of land will have a unique reference number.
It is also usual for the Compulsory Purchase Order to contain a ‘Statement of Reasons’ outlining the reasons for the serving the Order and the Acquiring Authorities reasons for acquiring the land.
Notification and Publicity
Having served the Compulsory Purchase Order the Acquiring Authority must serve notice on every ‘qualifying person’, being all those with a legal interest in the property and also those that may have a right to claim compensation on the basis that their rights or legally held easements over the land may be interfered with or that the value of their neighbouring land will be diminished. The notice must state the effects of the order. Notices will also be placed on the site of the property and also in the local press.
The Notices must state:
that a CPO is about to be submitted to a Government Minister (or to the Welsh Assembly Government) for confirmation.
Specify the time within which objections to the CPO can be made. This must be at least 21 days from the date the notice is posted.
Specify the manner in which objections to the CPO may be made.
Say where in the locality the CPO and map may be inspected.
Objections to the Compulsory Purchase Order must be made within 21 days of the Notice of the Order has been served. Article II of this series will deal with the Objection procedures involved.
After considering the various reports and documentation (including the Inspectors Report in the event of an Inquiry) the Minister will decide to confirm, modify or reject the Compulsory Purchase Order and will notify the Acquiring Authority of his decision.
Confirmation of the Compulsory Purchase Order
Once the decision letter from the Minister has been received by the Acquiring Authority they must publicise the decision in the local press. Notices must also be place at the site and served on the qualifying persons (see above).
Following the confirmation of a Compulsory Purchase Order, the following methods will be used by the Acquiring Authority to purchase the land:
Following a Notice to Treat/Notice of Entry;
By a General Vesting Declaration (GVD);
By procedures for acquiring “short tenancies”
In response to a Blight Notice.
Each of these methods will be considered in Part III of this series of articles.