What is a Compulsory Purchase Order?

UK Housing Market

If someone is subjected to a compulsory purchase order (CPO) on their home, they may have no choice but to sell. Norwich City Council described a CPO like this: “A CPO is an important tool for councils to use as a means of acquiring land needed to help deliver social, environmental, and economic change. The council is required to pay the owner compensation, which usually includes the value of the property and any relocation costs.”

Acquiring authorities must demonstrate that they are adhering to certain criteria, including demonstrating that they are acting in the public interest. CPOs are commonly used on projects such as airport expansions, road and rail improvements, and utility infrastructure development.

If you are concerned that a development in your area puts you at risk of being subjected to a CPO, or if you have already been served with one, then taking legal advice is essential. Having said this, let us look at some of the important aspects you need to know about CPO’s.

How do CPO’s work?

If a certain body, such as a local authority, deems your property an obstruction to a regeneration or essential public project, they can legally serve you with a Compulsory Purchase Order (CPO) to force you to sell it. The competent organisation serving the CPO has a statutory right to purchase your property to accomplish its public interest project. The CPO thus became part of a historic debate in property law as to what degree someone has “dominion” over their property and ownership of land.

The types of bodies that will serve a CPO on property owners are local councils, highway authorities, English Heritage, and energy providers, along with many other agencies undertaking essential public projects that constitute a “compelling case in the public interest.”

A “compelling case in the public interest”

The competent body serving a CPO must clearly demonstrate that there is a “compelling case in the public interest” by showing that the project will help improve the economic, social, or environmental situation of the affected area. In part, this also means that the financial viability of the project must be proven.

In addition to this, they must further establish that there was no other alternative means to acquire the land and property being served by the CPO. As part of the deliberation process, the body serving the CPO must listen to and consider ideas from the owners of the properties being served.

Acquiring bodies that are permitted to issue a CPO are varied and include local government, utility companies, government agencies, transport companies, and regional development authorities.

What compensation can you expect to receive?

Private homeowners are entitled to be compensated for their property or land.

Compensation should be based on the current market value of your property and land. However, sometimes there is a disagreement as to the “market value” of the land or property. Had the regeneration project not gone ahead, compensation should meet the value of the property. It’s also worth noting that your property price may have fallen since you bought it, so, in this case, you may end up getting less for it than you paid for it. In other words, if a CPO was served at a time of falling market prices, you could be particularly adversely affected.
You are entitled to compensation for “Injurious Affection”: compensation that reflects the impact of the value on any retained property you still own. For example, if only part of your land and property is required under a CPO, the remaining land or property may be affected in value.
Any compensation should be fair restitution: you should be put into the same financial position as if the CPO had not been served.
Temporary losses and professional costs can also be claimed for in some instances.
Expenses compensation can include things like the expense of hiring a specialist surveyor for advice; solicitor or conveyancer’s fees; and “disturbance” compensation for the trouble of buying a new home or for costs for loss of fixtures and fittings, carpets, and disconnections.

In summary, compensation should match the value of the land or property being acquired, along with loss from expenses and value incurred as a result of the CPO.

What are the steps for a Compulsory Purchase Order process?

The acquiring authority must do a feasibility study of the area so the land needed can be identified.
The acquiring body will liaise with the owners/occupiers being affected to negotiate and make necessary arrangements.
Following the conclusion of early discussions, a draught CPO may be served if the landowner refuses to sell. Landowners should contact the authorities to obtain further information about the procedure and what is anticipated. Additionally, you should keep note of any CPO-related activities and costs. After that, the acquiring body must produce a CPO report in preparation for both landowner discussions and an investigation by the appropriate authority.
At this point, the land and property owners should provide any relevant information required, such as proof of ownership with the Land Registry. It is an offence to not supply the requested information as well as give false or misleading information.
After collating all the necessary data, the acquiring authority can then move toward upholding the orders. The CPO should include all relevant information, such as the parties being affected and the owner’s particulars. The CPO must also be published in local media for public viewing.
All other potential affected parties by the CPO will be served a separate notice. Details of this notice will include how to object.
When the objection date has expired, a decision will be made as to whether an inquiry is required based upon the merits of the objections. If an inquiry does take place, the result will determine if the COP is enforceable.
If the CPO has been accepted, compensation steps are taken by the acquiring authority.