Compulsory purchase – what does this mean?

Owners have a right to peaceful enjoyment of their property. However, there can be occasions where that right is overcome forcing the owner to sell up and move out. One of these occasions is when the owner receives a Compulsory Purchase Order.

What is a Compulsory Purchase Order?

A Compulsory Purchase Order (CPO) is a mechanism allowing a public authority to gain possession of someone else’s property. This mechanism is also available to certain companies who provide public services. Examples include water or electricity companies.

If you receive a CPO, it means the authority intends to acquire ownership of your property and you will be faced with having to transfer ownership to them.

Why might a Compulsory Purchase Order be created?

A CPO might be created where there is to be a major development. For example, land required for a new hospital or a major housing development. It might be served by an electricity company who wish to create a new substation or a water company who wish to install a main sewer. Typically, new road and rail works lead to the issue of Compulsory Purchase Orders. One of the recent high-profile instances of the use of CPOs was the HS2 project.

What are the steps taken in creating and issuing a Compulsory Purchase Order?

When an public authority or utility company wishes to acquire land for a project, it goes through a series of steps.

The first step is to determine the extent of land required. They then need to identify the owners of the land they wish to acquire. Once this has been established, those who are affected are invited to object to the CPO. It then addresses objections either through written representations or a public enquiry. When these steps have been completed, the CPO is confirmed. The authority or company then takes steps to acquire ownership of the property that is subject to the CPO.

Can you object to a Compulsory Purchase Order?

Yes, you can. You should notify the issuing authority if you object to a CPO or make representations at any public enquiry. It is unlikely you will be recompensed for any expenditure you incur in objecting to the CPO.

Right to compensation

Those affected by a CPO have a right to compensation. However, the right only runs to putting you in no worse financial position than before the CPO was served. You will be paid the market value of the land (and buildings) and you may receive additional compensation where there are other costs incurred as a direct result of the CPO. An example of this would be removal expenses for moving house. The UK government has issued guidance in relation to making a compensation claim.

Making a compensation claim

To ensure you receive the correct compensation you should consider instructing a professional. Chartered surveyors can represent you in your compensation claim and reach an agreement as to the amount of compensation you should receive. The UK government has published a Compulsory Purchase model compensation claim form and guidance notes to assist in your compensation claim.

Summary

If you are served with a Compulsory Purchase Order, it is essential you obtain professional advice. Dealing with a CPO can be challenging. A solicitor or surveyor will guide you through the process should you wish to object. They will also ensure the compensatory payment you receive does not leave you out of pocket.