New legislation for compulsory purchase orders

A Government technical consultation on improvements to compulsory purchase processes has just closed (9th June 2015). These are proposals to make the process clearer, faster and fairer and the aim is to bring forward more brownfield land for development. 

Section One: Improving guidance

The guidance will be improved and provided online. It will be divided into three main tiers: an overview of the process and compensation; the range of powers available to compulsorily purchase land; technical procedural issues. It will also contain guidance on the separate, but related, issues of purchase notices and the Crichel Down Rules on the disposal of surplus land acquired by, or under the threat of, compulsion.

The consultation also proposes allowing more flexibility to the public sector in terms of making more reasonable initial offers, so as to avoid the need for a CPO, as the higher offer will still be lower than the cost of the CPO and all parties will benefit.

Section Two: improving the development and confirmation processes

It is often necessary to access land to survey it before making a CPO, but not all acquiring authorities have the power to do this, and those that don’t must negotiate with the landlord. This can cause delays and additional costs.

The consultation proposed a warrant for power of entry to consolidate all powers and improve transparency, as well as to introduce a standard notice period for entry.

The Government wants to make the timescales for the confirmation stage of the compulsory purchase process more streamlined and transparent, but without compromising the ability of parties to engage properly in the process and make their views known, or compromising the quality of the decisions.

There will be statutory targets and timetables for the entire process to reduce delays and eliminate the double handling of some cases. There will be time targets for orders subject to a public enquiry once the enquiry is complete, and transparent reporting on the performance against these targets.

There is also the proposal to change the method of challenging a decision not to confirm a compulsory purchase order from being a judicial review to becoming a statutory High Court challenge.

Section Three: improving the implementation stage

There are a number of proposals to set time limits to a number of stages including:

The notice period before entry to land where the CPO has been authorised at three months

To introduce ways to ensure that entry happens at that point – the “on” date – rather than allowing the authority to leave it open

To clarify that the date of exercising the powers is the date of execution of the General Vesting Date, and that an acquiring authority should be treated as having exercised powers by service of notice to treat or by execution of a general vesting declaration but not otherwise

When obtaining entry by means of a General Vesting Declaration, it must be executed within three years of the date of operation of the compulsory purchase order

The Government also wishes to make the process of advance payments fairer and faster, so that the person or business concerned does not suffer financial hardship, and proposes these changes:

A new requirement for the claimant to submit a formal claim form to obtain an advance payment, where the details can be amended as negotiation proceed

Bringing forward the earliest date when advance payment can be made to before the date of entry

A new faster mechanism for determining the amount and enforcing the making of advance payments by acquiring authorities

The consultation asked whether there should be a sanction for acquiring authorities who do not make payments on time.

They also propose changing the prescribed interest rate to peg it at 1% above the Bank of England base rate, so that persons and businesses do not find the value of their compensation declines in real terms because of delays.

Where there is a CPO and the claimant has negative equity, the Government proposes to work with lenders and the Financial Conduct Authority to secure a voluntary agreement on porting mortgages between properties.

Further information

You can read the full consultation document here.

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