FAQs about compulsory purchase orders
Compulsory purchase powers are provided to enable acquiring authorities (for example a local authority, highways agency, development corporation) to acquire land, property and other interests (including new rights) compulsorily to carry out a public function.
Compulsory purchase powers are authorised by the making of a Compulsory Purchase Order (CPO) by the relevant acquiring authority and may be used to secure public development such as new roads, airport extensions, town centre developments and urban regeneration.
Who authorises a compulsory purchase order?
Herefordshire Council will make the Compulsory Purchase Order (CPO) but approval is required from the Secretary of State by way of confirmation (after a Public Inquiry if objections to the order are made and not withdrawn). CPO powers cannot be exercised until after the order has been confirmed by the relevant Secretary of the State.
Do I lose my property if I receive notice that a CPO is being served in my property?
No, not immediately.
Land, property and other interests (including new rights) can only be acquired after the order has been confirmed by the Secretary of State. Owners, lessees, tenants and occupiers will be given notice of the making of the Compulsory Purchase Order by Herefordshire Council. This notice will provide details of how and to whom an objection to the order may be made. A similar notice will also be published in the press, also stating how an objection may be made.
What is the CPO process?
As described above, CPO powers are authorised by way of confirmation of the order by the relevant Secretary of State and once the CPO is confirmed, notice of its confirmation must be given by the acquiring authority. The acquiring authority has three years from that date in which to implement its CPO powers. The authority can do this by either making a general vesting declaration, or by service of notice to treat and notice of entry. If the order is confirmed, the authority will advise affected owners, lessees, tenants and occupiers how it intends to exercise the order powers and will be required to serve notices relating to the making of a general vesting declaration, or notices to treat and notices of entry, as part of the acquisition process. Compensation will be paid, in accordance with the statutory compensation code, to parties from whom land, property and interests are acquired.
What circumstances make a CPO viable?
The council must demonstrate that the taking of land is justified and that there is a 'compelling case in the public interest' for the acquisition of the land. The council will prepare and issue a statement of reasons for the making of the order when the Compulsory Purchase Order is made, explaining the reasons and justification for the order. Any objections made which are not withdrawn will be considered by the inspector at the inquiry.
Can I object to a CPO?
Yes. Owners, lessees, tenants and occupiers can object to a CPO. Members of the public and others may also object. The objection period must be a minimum of 21 days and will be specified in the notices given to owners, lessees, tenants and occupiers and to be published in the press. Objections relating to compensation may be disregarded by the confirming Secretary of State, since there is a separate procedure for resolving disputes regarding compensation through the Upper Tribunal (Lands Chamber). Objections must therefore challenge the purposes of the order.
How long do I have to relocate?
If the whole of the premises is affected by the Compulsory Purchase Order, it may be necessary for owners, lessees, tenants and occupiers to relocate to other premises. The council will notify parties if relocation is considered necessary and inform them of the timescales for achieving relocation.
The council will also endeavour to provide assistance to affected parties wishing to relocate, if assistance is required.
Once a CPO is confirmed how long will I have before I have to leave the property?
The council has a three year period to exercise its powers. We will notify you of our requirements in relation to the taking of the land and timescales for this. We will also serve formal notices when we intend to exercise the Compulsory Purchase Order powers to acquire and take possession of land, property and other interests required.
What are my rights for compensation?
The principle of compulsory purchase compensation is generally to seek to place the affected party in no better or worse position than prior to the compulsory purchase. Compensation is assessed and paid in accordance with the statutory compensation code which applies to the compulsory acquisition of land, property and other interests.
We can provide you with information about the code and how you claim compensation. The nature and amount of compensation payable will depend on the specific circumstances. Typical heads of claims may include: market value of property, disturbance costs, basic loss and occupiers loss payments, professional fees and cost of reinvestment where relevant and appropriate.
In addition, you may also claim reasonable costs incurred in consequence of the transaction, including surveyors or agents fees for negotiating compensation and legal costs properly incurred in consequence of the purchase by the acquiring authority.
Can I claim for the affects of the CPO on my business?
Yes, if appropriate and justified. The statutory compensation code makes provision for this. Information regarding what may be claimed can be provided to you by the acquiring authority. If you appoint a surveyor or agent, they will negotiate compensation with the authority on your behalf and advise you on your entitlement.
Who will pay for my professional costs arising from a compulsory acquisition?
The council will in all usual circumstances be responsible for the payment of your professional costs arising from the compulsory acquisition and negotiation of compensation, including reasonable and properly incurred surveyors or agents fees and legal costs.
If compensation is not agreed, it may be determined by the Upper Tribunal (Lands Chamber) who may make an award of costs in favour of the claimant or the acquiring authority. We would not be responsible for your costs in objecting to the Compulsory Purchase Order unless the inspector at inquiry rules this following a successful objection.
How long will it be before compensation is paid for a compulsory acquisition?
Once compensation is agreed with the council then this will be paid at the earliest opportunity. Once possession of land is taken, it is possible to seek an advance payment of compensation under the provisions of the Land Compensation Act 1973.
If you request an advance payment, this must be paid within three months. The balance of the claim can be settled by negotiation or determination of the Lands Tribunal. We can provide you with information about the circumstances in which a request for an advance payment may be made.
What are loss payments?
What are loss payments?
Loss payments are statutory payments to qualifying claimants in addition to any other compensation payment.
The basic loss payment for qualifying residential claimants is calculated at 10% of the market value of the interest being compulsorily acquired, subject to a minimum of £6,300 and maximum of £63,000 (from 1 October 2018 and subject to periodic change).
The basic loss payment for business owners and occupiers is payable to qualifying interests ( who have an interest of greater than one year). This is calculated at 7.5 per cent of the value of an interest up to a maximum payment of £75,000. In addition, an occupier's loss payment to an occupier (whether owner or tenant) can also be made which is (in the case of non-residential or agricultural properties) either an additional 2.5 per cent of the value of an interest in property or £25 per square metre of building occupied subject to a minimum of £2,500 (if an entire property is taken) up to a maximum of £25,000.
We can provide you with information on your entitlement to loss payments and further information on compensation generally is available from Ministry of Housing, Communities and Local Government guidance documents. Alternatively, you may seek advice from a surveyor or agent appointed to act on your behalf. There are specific rules that apply in relation to agricultural land.
Where a surveyor or agent is appointed, they may request an advance payment on behalf of a claimant.