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What is today's blog about?
In this week’s blog, we look at the RICS Consumer Guide to Compulsory Purchase. Essential reading for all RICS APC and AssocRICS candidates involved with compulsory purchase.
You can download the full Guide here. It is primarily aimed towards clients, business owners and homeowners, explaining the compulsory purchase process and how surveyors can assist. It is not professional guidance for surveyors, but instead provides an easy to understand overview of the process.
In a future blog article, we will look at the technical detail of compulsory purchase from a surveyor’s advisory perspective.
What is compulsory purchase?
Compulsory process is a legal process whereby part or all of a property can be acquired in the public interest, even if this is against the wishes of the property owner. Compensation is paid to the property owner in respect of the property or rights acquired.
What can compulsory purchase be used for?
Compulsory purchase can be used to acquire privately owned land for new infrastructure, e.g., roads, railways or utilities, or for regeneration projects.
How are compulsory purchase rights created?
Compulsory purchase rights are created by three types of Order, which must be authorised by the Secretary of State:
Compulsory Purchase Orders (CPO)
Development Consent Orders (DCO)
Transport and Works Act Orders (TWAO).
These Orders create powers authorising the use of compulsory purchase for a specific project (e.g., HS2) or more widely by a public body.
What are the stages of compulsory purchase?
The specific procedures for each type of Order differ, however, the overarching stages are outlined below.
Consultation and engagement – the acquiring authority contacts affected parties to consult on the scheme and proposals for compulsory purchase. Landowners and their surveyors should use this opportunity to find out as much information about the scheme as possible.
Land referencing – the acquiring authority identifies landowners and ownership to be included in the Order.
Order application – the acquiring authority submits the Order to establish compulsory purchase rights.
Objections and inquiry – affected parties have a limited period to make written objections against the Order. Representations may be heard if a qualifying objection is made.
Authorisation – the Order will be authorised following inquiry if the Secretary of State deems it appropriate and necessary.
Acquisition of land – the acquiring authority will use their powers under the Order to acquire the affected land. At various stages, legal notices will be served by the acquiring authority. Typically, negotiations will begin much earlier on and compulsory purchase powers used if these do not succeed.
How is compensation calculated for compulsory purchase purposes?
Compensation is paid to reflect the market value of the interest that is being compulsorily acquired, disregarding any impact of the scheme underlying the acquisition.
The assessment of compensation is guided by the ‘Compensation Code’, which is not a single document but is based upon various Acts of Parliament and caselaw precedent.
There are also additional specific payments that property owners may be entitled to, such as disturbance compensation or statutory loss payments.
If only part of a property is acquired compulsorily, then compensation may be paid based on the loss in value of the property that is retained.
There are also certain situations where a property owner can compel an acquiring authority to purchase the whole, rather than just part, of a property. There are strict requirements for where this is possible, based on the material detriment to the use or enjoyment of the retained land.
How do surveyors get involved with compulsory purchase?
Surveyors can specialise in providing advice on compulsory purchase. This could include:
Advice on the compulsory purchase process, including compensation rights
Negotiations with the acquiring authority
Advice on relocating to a new property
Objecting against a proposed compulsory purchase Order
What guidance do surveyors need to follow?
Surveyors must follow the mandatory RICS Professional Statement Surveyors Advising in Respect of Compulsory Purchase and Statutory Compensation 1st Edition.
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Stay tuned for our next blog post to help build a better you.
N.b. Nothing in this article constitutes legal, professional or financial advice.