Compulsory Purchase And Compensation Flashcards
(79 cards)
1
Q
What section of the Land Compensation Act 1961 governs compensation?
A
Section 5
2
Q
What are the 6 rules of compensation under s.5 of the LCA 1961
A
- No allowance because the acquisition is compulsory
- Based upon open market value & no scheme world
- Special suitability disregarded
- Illegal uses disregarded - no planning/green belt
- Where no market equivalence (comparables), reinstatement can be the basis
- Rule 2 does not affect compensation matters other than land take - IA, severance, disturbance
3
Q
What is the principle of equivalence?
A
This is the principle that people whose land is acquired compulsorily should be left neither better nor worse off financially as a result of their land being acquired
4
Q
What is the ‘compensation code’?
A
No code exists as such, but it is generally taken to mean the law set out in the LCA 61 and 73, and Compulsory Purchase Act 1965
5
Q
What is the difference between a CPO and a DCO?
A
CPO is a smaller project decided by the Local Authority – new roads, mains sewers, new substations
DCO is a larger project that is an NSIP and decided by the SoS and Planning Inspectorate – ESSO Solent CO2 Pipeline, Norwich to Tilbury.
6
Q
What is the process of obtaining a CPO?
A
- Information gathering
- Report, plan and statement of reasons
- Resolution
- Application to the LPA
- Serve Requisition for Information Notice
- Serve notice on landowners – 21 days to respond
- Public Enquiry
- Heard by a planning inspector
- Post Inquiry
LPA submit to SoS to determine application
7
Q
What is the process for a DCO?
A
- Pre application (6 months)
- Acceptance (PI has 28 days to accept)
- Pre examination
- Examination (6 months)
- Decision (3 months to make a recommendation)
- Post Decision
8
Q
What are the timescales of a DCO?
A
- Consultation: 6-8 months
- 28 days for PINS to accept
- 6 months for PINS to examine
- 3 months for PINS to make recommendations to SoS
- SoS has 3 months to issue decision
- Approx 15 months in total
9
Q
What is the valuation date of a CPO?
A
The earliest date of:
1. Date of entry
2. The Vesting Date
3. Date when compensation was agreed
10
Q
What are the Head of Claims for a CPO?
A
- Land take – value of land to be acquired
- Severance – land to also be sold
- Injurious Affection – diminution in value of remaining land
- Basic Loss– the lower of 7.5% of the value of the interest or £75,000
- Occupiers Loss – lower of 2.5% of the value of the interest or £25,000
11
Q
What is a Blight Notice?
A
To bring anticipated acquisition of land by the Public Authority to a time that suits the landowner, rather than waiting for a CPO from the authority
12
Q
What legislation governs Blight?
A
Schedule 12 of the Town and Country Planning Act 1990
13
Q
What are the Crichel Down Rules?
A
The Crichel Down Rules are government guidelines requiring surplus public land, originally acquired by compulsory purchase, to be offered back to the former owners or their successors before being sold on the open market.
14
Q
What does the Planning Act 2008 govern?
A
DCOs
15
Q
What does the Acquisition of Land Act 1981 govern?
A
CPOs by local and other authorities
16
Q
What case law relates to compulsory purchase and compensation?
A
Equivalence - Horn v Sunderland (1941)
No scheme principle - Point Gourde v Crown (1947)
17
Q
What is covered under the Compulsory Purchase Act 1965?
A
Compulsory Purchase but also IA compensation and the McCarthy Rules
18
Q
What are the 4 McCarthy rules?
A
- IA must be as a result of LA exercising powers
- IA must arise from actions that, without statutory authority, would give rise to legal action
- Comp. limited to direct physical interference, not for damage to trade, personal loss or inconvenience
- Damage must arise from the execution of the works, not from their authorised use
19
Q
What are the criteria for a blight claim?
A
- Must be living at the property or with 3 years on lease
- Made a reasonable effort to sell the property at a realistic price, and that you have been unable to do so
- Unable to receive genuine offers close to the unblighted property value
- If CPO has been confirmed, no requirement to prove that you have tried to sell
- Land is in the are mapped by the acquiring authority as land that is required – cannot for surrounding area
20
Q
What is the process for a Blight notice?
A
- Must be served in writing on the standard form, available from the council or public authority
- State the interest in land
- Statutory ground for serving the notice
21
Q
How can the Blight notice be responded to?
A
- AA accepts
Notice to Treat is deemed to have been served. 3 years to purchase property under CPO terms - Rejects
Can object on certain grounds (land not relevant/AA not proposing to acquire any of the land/claimant is ineligible) - Does not reply within 2 months
Notice will automatically be accepted
22
Q
What is a GVD?
A
General Vesting Declaration
Where a CPO is in place, a GVD is the formal procedure in which the AA has the right to take ownership of a property
23
Q
What legislation governs GVD?
A
s.1 Compulsory Purchase (Vesting Declarations) 1981
24
Q
What is the GVD process?
A
- Starts with a constructive Notice to Treat
- Executed at least 2 months after the preliminary notice
- The title is vested to the AA, at least 28 days after the notice
25
What is a notice to treat?
An invitation to negotiate given by the AA with the CPO to the owner of the interest in land that they wish to acquire
A formal request to agree a price for the property
26
What is the process of a Notice to Treat?
1. AA serves NTT as an intention to carry out the CPO process
2. Minimum of 14 days before the Notice of Entry is then served, with 3 months’ notice
3. NoE reflects date access will be taken, but ownership is not granted until conveyance and comp. is agreed.
4. AA has 3 years from CPO to agree comp. or go to Tribunal
27
What must a notice to treat contain?
1. Specify the land to which it relates
2. Request particulars of the addressee’s interest and rights in the land
3. State that the aa is willing to treat (negotiate) for the purchase of the land and to pay compensation
4. Ask for the addressees’ claim in respect of the land with a specific period, usually 21 days)
28
How must a notice to treat be served?
1. Delivered to person whom it is being served
2. Leaving it at the usual or last known place of abode
3. Sending via pre-paid registered letter or recorded delivery
4. Via electronic communication
5. Incorporated company or body – deliver to secretary/clerk or via prepaid/recorded delivery
29
What is in a Notice of Entry?
Once a NtT has been service, the AA can take possession of the land following service of a NoE
NoE must specify a date when the AA proposes to enter and take possession of the land - minimum of 3 months’ notice
Vesting of the title will occur once compensation is settled
Date of entry is the valuation date
30
What is an enabling act?
An Act or legislation that a CPO is served under
Schedule 3 of the Electricity Act or Gas Acts. s.155 for WIA
31
What is a Certificate of Appropriate Alternative Development, a CAAD?
The right for an affected interest in land to claim increased compensation in the event of likely planning permission to be granted
32
What is the definition of Injurious Affection?
Injurious Affection is the reduction in the value of a property or piece of land due to the presence of a public service. In this example, my client was National Grid, and relates to their overhead lines and the towers (pylons), and the impact these have on the value of a landowner’s property.
33
What legislation governs IA?
1. s.10 CPA ’65 – land taken
2. Part 1 claim - Land Compensation Act 1973 – no land taken
34
How would you define and calculate IA
The diminution in value of land or property as a result of apparatus or a CPO scheme.
Claimable for construction of works & subsequent use
1. s.10 CPA 1965
35
What would you claim IA for?
1. Impact of construction – visual/noise/smell
2. Non-physical factors – reduction in quality of the local area
36
What makes a good comparable?
1. Comprehensive - need to be multiple
2. Similar property type
3. Recent
4. Result of an arm’s length transaction
5. Verifiable
6. Result of underlying market condition
37
What are NG fee scales?
NG Payment of Surveyors’ Fees, 2022, Version 6
A scale based on agreeing access, negotiation and settlement of compensation. Can be used for easement negotiation.
Starts at £214 for £1-£99, and up in increments to £859 for £4.5-5k. Over is 2.5% or hourly rate if deemed appropriate
38
Case law for calculating IA
Ledburn Properties v Cheshire Council (2011)
40% for a road constructed on property boundary
39
Where do disputes of IA go to for determination?
Upper Tribunal (Lands Chamber)
40
What is severance and how is it calculated?
When the land acquired contributes to the value of the land which is retained, so that when severed from it, the retained land loses value
The value of the land purchased at open market value
41
What legislation does severance fall under?
s.7 Compulsory Purchase Act 1965
42
What could a severance claim be for?
1. New access
2. Costs of movement
3. Boundaries
4. Unusable areas
5. Altered drainage
43
What would you find in terms of engagement?
1. Identification and status of the valuer
2. Client
3. Property to be valued
4. Currency
5. Purpose of valuation
6. Basis of value
7. Valuation date
8. Special Assumptions
9. Nature and extent of the valuers work
10. Nature and source of information
11. 3rd party liability
12. RICS Valuation Standards
13. Description of report
44
What are special assumptions?
Things that are not true but will be assumed to be true, e.g.
1. Vacant possession when the property is in fact occupied
2. Planning consent has been obtained
3. Building works have been completed
45
What is a disturbance compensation?
Costs or losses arising from compulsory acquisition and dispossession not directly based on the value of land
46
What can be included in a disturbance claim?
1. Temporary & permanent loss of profits
2. Loss of crops
3. Cost of seeking suitable alternative premises
4. Costs of fitting out alternative premises
5. Stamp duty on new premises
6. Close down of business if relocation not possible
7. Reasonable legal and surveyor fees
To note - does not include cost of alternative premises – it is assumed C has received value for money for the land acquired
47
What is section 172 of the Housing and Planning Act 2016?
A right of entry for Acquiring Authorities to survey land in connection with a proposal to acquire an interest in or a right over land. 14 days’ notice.
Can be for non-intrusive and intrusive surveys
48
What categories would objections to a CPO fall into?
1. Agree, but would like to see minor amendments to minimise the impact on you - visual or noise
2. Agree, but that the scheme should be elsewhere
3. Object completely - this cannot be down to just disagreeing with the planning policy, the objection must have valid reasons - environmental, economic or social concerns
49
What is the Land Compensation Act 1973?
Covers injurious affection when no land is taken, usually from public works like roads or railways
50
What is the difference between the LCA ’73 and CPA ’65 in relation to IA?
CPA ’65 covers IA when land is taken, whereas LCA ’73 is for when no land is taken but property is negatively affected by public works
51
What covers CPO in the Electricity Act 1989
Schedule 3
52
What covers CPO in the Gas Act 1986
Schedule 3
53
What legislation is home/basic/occupiers loss covered under?
Part 3 - Land Compensation Act 1973
54
What is the overarching aim of the CPA 1965?
Deals with the implementation of CPOs once they have been authorised, covering compensation, entry onto land and the rights of landowner during the acquisition process
55
What are the key differences between the Acts relating to Compulsory Purchase?
LCA 1961 - establishes rules for compensation
CPA 1965 - Outlines legal process for implementing CP orders, including entry onto land and compensation
LCA 1973 - Provides additional compensation - Basic/Occupiers/Home Loss
ALA 1981 - Sets out the procedural framework for authorising CP orders for public projects
56
What is marriage value?
The extra value created when two or more assets or interests are combined, making the total worth more than the sum of their individual values.
57
How do you seek an injunction?
1. Establish grounds
2. Prepare evidence
3. Follow pre-action protocols
4. Consult legal counsel
5. File with the court
58
How much does an injunction cost?
Depends on exact circumstances, and I would need to double check exact costs but court is £300 and legal fees can be up to £30k depending on scenario
59
What do you understand by the hierarchy of comparables?
Refers to the reliability of data sources when valuing assets. Ranks sources from most to least reliable based on their objectivity, market relevance, and direct comparability
60
What is the hierarchy of comparables?
Category A - direct transactional evidence
Category B - general market data providing guidance rather than a direct indication of value, such as evidence from published sources, commercial databases, indices, historic evidence and demand/supply data
Category C - other sources, such as transactional evidence from other property types and locations and other relevant background data
61
What is the RICS guidance for comparables?
RICS Global Professional Standards & Guidance Comparable Evidence in Real Estate valuation 2019
62
What assumptions are in a Val report?
1. No onerous restrictions
2. Free from contamination
3. If you can’t access you note it but assume they are in good condition
4. If no EPC assume minimum EPC rating
63
What valuations are exempt from the Red Book?
1. Agency (market appraisals)
2. Litigation
3. Internal
4. Expert Witness
5. Statutory Functions
64
What are the differences between GVD and NtT
The main difference is how ownership and compensation are handled in compulsory purchase
GVD – transfers ownership of the land on a set date, whilst comp. is settled separately
NtT – a notice served on the landowner by the AA of their intention of buy the land, requiring negotiation or a tribunal decision.
65
What are the timeframes for a GVD?
1. Has to be served within 3 years of CP powers being granted
2. Preliminary notice sent with 2 months’ notice
3. Notice sent announcing the GVD with vesting date at least 28 days away
66
What property cannot be served a GVD?
1. A minor tenancy - a tenancy with 1 year, or which runs from year to year
2. A long tenancy about to expire - that is a tenancy for a longer period than a minor, but which has a period left to run that is less than the period specified in the GVD
67
What is the NTT procedure?
1. NTT
2. NoE
3. Conveyance
68
What are the timeframes for NTT?
NTT and NoE served with a minimum of 14 days
After this date, comp has to be settled and paid and a transfer taken of the land, or a deed completed for new right
69
Benefits of a GVD compared to NTT?
Enables both title and right to possession of the land to be secured in as little as 3 months – assuming min. vesting period of 28 days is specified.
Property rights caught in a GVD will be converted into compensation, which has to be paid following the making of the GVD
70
Benefits of an NTT compared to a GVD?
Flexible and relatively quick. Where it is important to secure the possession of the land early, NTT can be preferred option. However, acquisition of title can take months/years to complete.
NTT can extend the CPO for a further 3 years
71
Why can an NTT be extended by a further 3 years?
Where a NTT is given within the 3 yr period, the authority power will have been duly exercised with the time lime and the NT will remain valid for a further 3 years.
s.4 CPA 1965
72
What does a GVD include?
1. Legislation under which GVD is being exercised
2. The property being vested
3. If any mines/minerals are being vested
4. Schedule
5. Signatures
6. Plans
73
What does an NTT include?
1. Particulars of the land the notice relates to
2. Demand particulars of the recipient’s estate and interest in the land
3. AA are willing to treat for the purchase of the land, and pay compensation for the damage sustained
4. Plans
74
How many years do you have to settle your GVD claim?
6
75
What legislation is a GVD governed by? And what does the legislation say?
Limitation Act 1980.
Sets time limits for bringing legal claims in England and Wales, typically 6 years for contract and tort cases.
76
What are Contract cases in relation to the Limitation Act 1980?
Disputes over breaches of agreements between parties.
77
What are Tort cases in relation to the Limitation Act 1980?
Claims for wrongful acts causing harm, like negligence or defamation.
78
What would you do if you couldn't agree agents fees?
1. Establish that the rate they were proposing was commensurate with the work entailed and their experience
2. Escalate to a senior colleague to see if they could agree
3. Not agreeing fees is not a reason not to progress a job, ultimate recourse would be to refer to Lands Tribunal
79
RICS guidance on CPO?
RICS professional standards Surveyors advising in respect of compulsory purchase and statutory compensation 2024
