Compulsory Purchase Orders might not seem the most glamorous of topics, but with the urgent need for more homes, and a new Prime Minister showing great enthusiasm for big infrastructure projects, now’s the time to get to grips with CPOs whether you’re a promoter, landowner or have any other interest in property.
In this short series of blogs we aim to demystify CPOs, provide some practical tips for landowners and promoters, and address the thorny issue of compensation.
So what is a CPO?
CPOs grant a person (or body) the power to acquire someone-else’s land or rights over land. This could include, for example, erasing rights of light or rights of way over land. In addition to “typical” CPOs, CPO powers can be found in various Acts of Parliament (as with HS2), or development consent orders, and many of the principles explained here will apply in those cases too.
Although CPOs are usually thought about in the context of large regeneration or infrastructure projects, they have a very wide application, and can crop up in all sorts of scenarios ranging from high speed rail lines to listed buildings that are not being properly cared for.
However, given the serious nature of these powers, they can’t be exercised on a whim and there are legal tests which must be satisfied in each case. Although the tests will vary depending on the purpose of the CPO, there are some common factors:
The public interest
The exercise of the compulsory purchase powers must be in the public interest. However, public benefits are given a pretty broad interpretation and it can sometimes seem like any “improvement” to an area is adequate.
There must also be a realistic prospect that the relevant scheme and its benefits will be delivered. This usually means that any significant project needs to have planning permission in place and the promoter will need to identify where the funding will be coming from.
Use of the powers should also be necessary. CPO should be a tool of last resort.
However, disparate ownership of a site is often cited as a reason why the CPO is needed and in practice, many authorities, use the threat of the CPO to bring landowners to the negotiating table.
Even so, a promoter should actively engage with landowners at the outset and try to acquire the land/interest by agreement. Failure to do so can count against it when the CPO application is considered.
Failure to satisfy any of these, or any other elements of the relevant tests, may ultimately lead to the CPO powers not being confirmed.
Who can use the powers?
Generally local authorities and government departments have potential compulsory purchase powers as do some public bodies, such as statutory undertakers.
However, it is not unusual for acquiring authorities to make a CPO on behalf of a private developer in return for the developer covering all costs. Where this happens, the relevant tests must still be satisfied – it is not enough that a developer simply wants to build a new shopping centre; they must also be able to demonstrate that this will deliver benefits for the area. However, given the broad interpretation of this test, it is often pretty easy to satisfy.
What happens when there’s a CPO?
The seeking, granting, and exercise of compulsory purchase powers is a long and procedurally complex process. The exact details vary depending on matters such as: the powers being sought; when the CPO is made (this is an area where governments love to tinker), and whether the powers are granted by a standard CPO or via another route.
In most instances, there will be a public forum to voice opposition to the CPO (such as a public inquiry) as well as a raft of notices and other documents served at different times as the procedure nudges forward. The nature of the process means that specialist advice should always be sought, as failure to engage as necessary can have serious implications.
How long will it all take?
It is not at all unusual for the whole process to take a number of years. This can have both pros and cons for landowners. If someone is to be dispossessed of their business, the time can be taken to find alternative premises, causing less disruption to operations. However, in most cases the uncertainty of success whilst waiting for the powers to be confirmed and exercised can bring their own complications.
In the next blog in this series we will consider some of the key steps that a landowner can take to minimise the impact of an impending CPO.