Understanding the CPO & Compensation Process

The rules surrounding the operation of CPOs and how land can be taken were changed by the Housing and Planning Act 2016 and accompanying regulations, which was implemented in part during 2016 and part 2017.

As soon as a CPO has been made the acquiring authority needs to serve a notice on each and every ‘qualifying person,’ detailing the nature and extent of the Order. Obvious qualifying persons are owners, tenants and other occupiers of affected land, but also less obviously anyone who has rights attaching to that land, or if the value of their own (neighbouring) land would be adversely affected (blight) may qualify. The acquiring authority will then seek to take possession of the land typically either by way of a notice to treat/entry or a General Vesting Declaration (GVD), or sometimes in response to a Blight Notice; where one claims their interest in land is so adversely affected by the CPO that although their land is not the subject of the CPO itself, they should be compensated and their land also taken.

The main difference in the procedures is that a notice to treat specifies a date when the acquiring authority will take possession of the land (it must give 28 days notice) but it does not transfer ownership of the land. A GVD however vests title to the land as well as giving possession, so it is the preferred method in most cases; here at least 2 months notice must be given.

If you are affected you will be able to make a claim for compensation, once your interest in the land affected has been properly valued. The underlying principle in considering payment of compensation is that it should leave one in no better or worse position than before the CPO.

Compensation may extent to disturbance and distress (of your occupation)(also known as ‘home loss payments’) and sums to cover (wholly or partially) professional fees of surveyors and solicitors. Compensation may also be claimed if the CPO or associated construction works reduces the value of your land. Some with otherwise valid interests in land such as tenants at will/ licensees or tenants who are holding over are not entitled to any compensation and their occupation can be terminated. Since the new rules coming into effect on 13 July 2016, it is now possible to claim an advance payment of compensation to allow those affected to put their financial affairs in order if certain rules are followed.

It is important to remember that compulsory purchase only applies to the extent that it is necessary for the acquiring authority’s purposes. So for example, a water authority does not need to buy the freehold in land in order to run a sewer through it where an easement will normally suffice. Thus, CPOs can be used only to acquire an easement.