New guidance on compulsory purchase orders (CPOs) has been published to help property owners and occupiers navigate the process and get compensated properly.
More people could be set to receive CPOs because of new housing schemes and infrastructure planned as the country “builds back better”, according to The Royal Institution of Chartered Surveyors (Rics). However, the process can often be lengthy and complex.
Paul Astbury, co-author of the guide, said: “Compulsory purchase is an essential tool for delivering much needed housing and infrastructure in the UK, but it inevitably has a big impact on the lives of those losing their homes or business premises to make way for development.
“This guide is the first stepping stone for anyone affected by compulsory purchase to understand what to expect, how to find professional advice and how the cost of advice can be met.”
What is a compulsory purchase order (CPO)?
Compulsory purchase is a legal process where the state allows property — including land and/or buildings — to be acquired in the public interest, even if the owner does not agree.
This can be to make way for infrastructure such as roads or railways — a notable recent example is HS2 — or to regenerate an area with housing and amenities to meet its needs better.
As part of the legal process, owners and occupiers will be paid compensation for any property or rights taken from them.
How will a CPO affect me?
The compulsory purchase process can be lengthy and complex for those affected.
According to the RICS guide, the first step is consultation and engagement where the acquiring authority (the body seeking compulsory purchase powers) will contact all affected parties to explain the scheme.
People affected may be sent letters, brochures or invitations to events to learn about the scheme and its impact, as well as any early purchase or mitigation schemes they are offering.
What you can do about a compulsory purchase
If you may be affected by a compulsory purchase, it’s important to engage in the process to understand the impact, timing and your rights.
The engagement and consultation stage gives people affected an opportunity to speak to the acquiring authority.
If you find out you are going to be affected, you should consider getting professional advice as soon as possible, according to RICS. It recommends seeking advice from a qualified RICS member (chartered surveyor) who can guide you on the process, your compensation rights and how to object and/or negotiate.
What CPO compensation am I entitled to?
Compensation will be paid to reflect the market value of the property that is being compulsorily acquired.
The amount of compensation is determined by a complex body of law called the ‘Compensation Code’ so RICS again recommends people affected seek specialist advice from a professional.
As well as the market value, compensation may cover losses specific to the claimant.
For example businesses may be entitled to ‘disturbance compensation’ to cover costs and losses such as relocating, redundancies or loss of trade.
Homeowners may be able to claim for removal services, or items they are unable to take with them when they move. Claimants may receive further ‘loss payments’ as extra compensation.
People who only have part of their property, including land acquired, may be entitled to compensation for the loss in value of what they have kept.
According to RICS, keeping all expenses logged and documented is crucial, to provide evidence to support any compensation claim.
What to do if you’re served with a notice
It’s important to pay attention to all the legal notices you receive and not ignore them, according to RICS.
If you have any concerns and questions, contact the acquiring authority. You can also ask them if they will pay for professional advice.
How to object to a CPO
After the acquiring authority has checked who owns and occupies the land, it will submit an order application to the Secretary of State for authorisation.
The opportunity for a property owner or occupant to object is during a limited period after receiving notice of the order.
According to RICS, people who are considering objecting should seek professional advice, although they do not have to in order to make a representation.
Objections or representations can be made in writing to the address given on the notice. If the objection qualifies, there will be an inquiry, where people affected can make their case in person or via a legal representative.
After the inquiry, it can take several months for a decision to be made.
What happens if a CPO is authorised?
If the order is authorised by the Secretary of State, the acquiring authority will send a notice to those affected. They may then use their legal powers to acquire the land as soon as possible.
All this and more can be found online in RICS consumer guide: A clear, impartial guide to compulsory purchase.