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Compulsory Purchase Update - Ludlow, 5 February 2015

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Slides to accompany a local RICS meeting held at The Feathers Hotel, Ludlow, on 5 February 2015. Includes the latest on HS2 hardship and other purchase schemes.

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Compulsory Purchase Update - Ludlow, 5 February 2015

  1. 1. COMPULSORY PURCHASE UPDATE RICS, Ludlow 5 February 2015 Charles Cowap
  2. 2. Compulsory purchase procedures and preliminaries – brief summary
  3. 3. • Acquiring authority makes CPO and other cp scheme (e.g. highway scheme) • Objections lead to public inquiry • CPO confirmed by minister or sometimes acquiring authority (2004 Act) • AA proceeds by Notice to Treat or Vesting Declaration • Notices to Treat served on all substantial interests • Responses to Notices to Treat include claimants’ details and notification of claim • AA agrees compensation or serves Notice of Entry • Accommodation works agreed • Advance payments (90%) available • Importance of Enabling Act • Consider enlarging Notice to Treat by Counter Notice? • Consider Blight Notice?
  4. 4. CLAIMS Owner-occupiers • Land Taken • Severance & Injurious Affection • Disturbance
  5. 5. Owners (not in occupation) • Land taken • Severance and Injurious Affection • Very limited disturbance
  6. 6. Tenants • General basis for longer-term tenants • Notice to Quit or Notice of Entry? • s20 (CPA 1965) basis for annual/shorter tenancies • ‘value tenant’s interest’ & other heads of claim (- 4 yrs rent reorganisation payment, s12 Agriculture Act 1968)
  7. 7. No land taken • Execution of works: McCarthy rules • Use of works: Part One claim Valuation dates • Entry • Settlement/LT Award • First anniversary of ‘qualifying date’ for Part One claims
  8. 8. Other items of claim • Home Loss payments • Farm Loss payments abolished • Basic Loss payments • Occupier Loss payments • Valuer’s fees: was: Ryde’s Scale (1996); now: Quantum Meruit • Disputed compensation to Upper Tribunal (Lands Chamber) (formerly the Lands Tribunal)
  9. 9. SEVERANCE AND INJURIOUS AFFECTION • Right to enlarge Notice to Treat for part of house, manufactory or garden - material detriment test • Right to enlarge Notice to Treat/Entry for part of farm - reasonably capable of being farmed test • Small severed areas of land (<0.5 acre) • Betterment?
  10. 10. Procedural Aspects Making and confirmation of CPOs
  11. 11. Compulsory Purchase Order Specifies land • Subject to Minister's confirmation • Rights of Objection Procedure: • Acquisition of Land Act 1981 • covers CPOs under most public general acts
  12. 12. Draft CPO Advertised Notice to • owners, lessees, occupiers • anybody who would be entitled to notice to treat, e.g. mortgagee, trustee • anybody entitled to s10 claim under Compulsory Purchase Act 1965 (injurious affection from carrying out works)
  13. 13. CPO Notice states • land required • purpose of CPO • where copies and plans can be inspected • Time limit for objections – (at least 21 days)
  14. 14. OBJECTIONS TO DRAFT CPOs (ALA 1981) Made to confirming minister • may require them in writing • can ignore any which can be dealt with by Lands Tribunal (Upper Tribunal Lands Chamber) • Public local inquiry (or hearing) if objections not withdrawn. • May also be dealt with by written representations or private hearing – (Planning and Compulsory Purchase Act 2004)
  15. 15. ‘RELEVANT OBJECTIONS’ UNDER PLANNING AND COMPULSORY PURCHASE ACT 2004 • Concept of Relevant Objection i.e • Objection from anybody entitled to be notified of CPO (as above) CPO can be confirmed without inquiry if • No relevant objections • Or Relevant Objections are withdrawn
  16. 16. CPO can be confirmed in stages Acquiring Authority may confirm CPO itself in limited circumstances • Prior approval from Confirming Minister • No objections • No modifications • Cannot be confirmed in stages
  17. 17. Compensation Aspects following 2004 Act
  18. 18. 1. Basic Loss Payments 2. Occupier Loss Payments 3. Abolition of Farm Loss Payments
  19. 19. Basic and Occupier’s Loss Payments • Amendments to LCA73
  20. 20. Basic Loss Payment S106/s33A • 7.5% of value of interest taken • Maximum £75,000 • Freehold interest or tenancy of more than one year seems to qualify
  21. 21. Occupier’s Loss Payment, Other Land s107/s33C Maximum of 1. 2.5% of value of interest 2. Land Amount, – £2.50/square metre or £2,500 whichever is more where all the land is acquired. – £2.50/square metre or £300 whichever is more where only part of the land is acquired 3. Buildings Amount, i.e. £25/square metre GEA • Total claim limited to £25,000.
  22. 22. Occupier’s Loss Payment, Agricultural Land S107/s33B Maximum of 1. 2.5% of value of interest 2. Land Amount, i.e. £100/ha up to 100 ha, and £50/ha for next 300 ha (to maximum claim of £25,000) OR £300 if more 3. Buildings Amount, i.e. £25/square metre GEA Total claim limited to £25,000. or • payment under s12 Agriculture (Miscellaneous Provisions) Act 1968
  23. 23. • Both landlords and tenants may qualify for Basic Loss payments in appropriate circumstances • Strict time limits for payment • Advance payments available • No payment where CP due to owner’s neglect, e.g. damage to listed building, unfit housing etc • Discretionary power where acquisition by agreement – practical point
  24. 24. Relationship to Home Loss Payment • Loss Payments and Home Loss Payment may be paid together – E.g. acquisition of farm or mixed hereditament • Home Loss Payment calculated first, based on value of home – HLP = 10% of MV – £4,900 to £49,000 range • Value of home DEDUCTED from value of entire property to arrive at Loss Payment
  25. 25. Home Loss Payments wef 1 2014 Statutory Instrument 2014 No. 1966 The Home Loss Payments (Prescribed Amounts) (England) Regulations 2014 • Min £4,900 • Max £49,000 • Tenants: £4,900
  26. 26. Planning Act 2008  Localism Act 2011 • Infrastructure Planning Commission (IPC) becomes part of Planning Inspectorate • Nationally Significant Infrastructure Projects (NSIPs) • National Policy Statements • Development Consent Orders • Compulsory Acquisition Powers 26
  27. 27. NSIPs • Generating stations • Cables and Pipes • Gas storage • Highways • Airports • Harbours • Railways • Dams and water transfer • Hazardous waste and waste water • Size thresholds 27
  28. 28. The Application Process 28 1. Pre- Application 2. Acceptance
  29. 29. 29 3. Pre- Examination 4. Examination
  30. 30. 30 5. Decision 6. Post-decision
  31. 31. Pre-application: Adviser • Procedural advice • Information re. Land tenure and occupation: 14 days deadline • Consultation responses: 28 days • Pre-entry surveys and compensation claims • Early alert to compulsory acquisition 31
  32. 32. 2. Acceptance by IPC • IPC time period 28 days to accept or reject on grounds of adequate consultation and quality 32
  33. 33. Rookery South, Bedfordshire Waste Combustion Plant, 65 MW, Bedfordshire First Application and Decision Developer’s Artist’s Impression 33
  34. 34. 3. Pre-Examination: Adviser • Register as an ‘interested party’ • Make ‘relevant representation’ • Initial representations – in outline – Principal arguments – NOT merits of NPS, compensation issues • Respond to published representations: 21 days • Preliminary meeting • Clarify role: representative, expert witness • Working up detailed representations 34
  35. 35. 4. Examination: Adviser • Preparation of detailed submissions: 28 days • Preliminary hearings: procedures, requests for expert witness • Respond to other submissions: 21 days • Hearings: representative or expert witness • Request compulsory acquisition hearing • Respond to local authority Local Impact Report • Land Acquisition negotiations • Resolution of acquisition issues via ADR or Compulsory Acquisition Hearings 35
  36. 36. 5. Decision: Adviser National Policy Statements • Energy – Overarching – Renewables – Fossil fuels – Oil and Gas – Electricity network – Nuclear – Approved on 19 July 2011 36
  37. 37. 6. Post-decision • Legal challenge 37
  38. 38. .. And what IPC does not cover: • Infrastructure below the NSIP thresholds – Lower voltage electricity lines – Local highways – Smaller pipelines etc etc • Proposals covered by Hybrid Bill proposals – Eg HS2, the high-speed northern rail link 38
  39. 39. IPC: All Change! • Localism Act 2011 – Powers and procedures transferred to Major Infrastructure Planning Unit within Planning Inspectorate – All decisions will be taken by ministers: Commissioners will recommend based on National Policy Statements – NPS therefore retained
  40. 40. Problems with tree roots Wright v Horsham DC [2011] UKUT319 (LC) • Compensation for refusal of TPO consent to fell 3 oak trees • Claims for underpinning work of £23,253.25 + £750 for distress etc • Awarded in full – Cost of underpinning should be in reasonable contemplation when consent is refused
  41. 41. More tree roots Halifax Insurance v Teignbridge DC [2011] UKUT 213 (LC) • TPO: Refusal of consent to thin crown on tree in 3rd party ownership • Compensation awarded £7,602 for remedial works and preventive measures • 3 tests for compensation: – Cause? – Compensation reasonably foreseeable? – General rules on damages
  42. 42. Staying underground O’Donoghue & others v SoS for Transport [2011] UKUT 203 (LC) • Subsoil beneath 26 properties in North and East London • £50 each nominal payment for ‘tube’ of subsoil for underground railway – the St Pancras link to the Channel Tunnel Rail Link (‘HS1’)
  43. 43. Bocardo v Star Energy High Court 2008 • Surrey oilfield • Bocardo Estate, Oxted • Star Energy: Petroleum Production Licence • 1990 – 2007: 1 million barrels + • 800 feet deep • Trespass? Value of Wayleave?
  44. 44. Bocardo v Star Energy 27.8.2008 EWHC 1756 Ch Bocardo Estate
  45. 45. • Trespass – 17 years without being noticed – Simple ownership of minerals does not convey right to enter and remove them • Wayleave – 9% of value of the oil (£6.9 million) – Limitation – deliberate concealment (by Star) would have prevented a limitation period defence
  46. 46. Bocardo (2) The Court of Appeal  Supreme CourtCourt of Appeal • Supported finding that oil extraction was a trespass, even though B’s use and enjoyment was not affected ‘one iota’ • Compensation: based on s8(2) Mines (Working Facilities and Support) Act 1966. • Star proposed £82.50: £50 for a deep tunnel plus special purchaser uplift plus 10% • CA awarded £1,000 Supreme Court [2010] UKSC 35 • Confirmed trespass: unanimous all 5 judges • Nominal award of damages only: 3:2 majority
  47. 47. And sticking with the Supreme Court Transport for London v Spirerose Ltd [2009]UKHL 44 • A lengthy case • Concluded that hope value, rather than full development, value should be reflected in award • Lengthy consideration of Point Gourde, value to owner and how to discount value attributable solely to the scheme
  48. 48. Ongoing effects of Spirerose Persimmon Homes (Midlands) Ltd v SoS for Transport [2009] UKUT126 (LC) • Four key questions – Would there be a sustainable highways objection in the ‘no-scheme world’? – Would there be a sustainable planning objection in the ‘no-scheme world’? – If there was an objection, is there hope of future development? – Should betterment be set off against contiguous land?
  49. 49. Ignoring the effects of the scheme Are we to imagine 1. That ‘the scheme’ had never been thought of? – In other words unravel several years’ worth of policy development OR 2. That ‘the scheme’ has been ‘cancelled’ immediately prior to the valuation date?  
  50. 50. Statutory Planning Assumptions What’s the point of these? • They set the valuation ‘scene’ – a series of assumptions about planning uses in the absence of compulsory purchase Where were they found? • In sections 14-17 of the Land Compensation Act 1961 Where do we find them now? • Section 232, Localism Act 2011has inserted new ss 14, 16 and 17 in LCA 1961 and repealed s15.
  51. 51. The New Statutory Planning Assumptions • Regard to any planning permission in force at valuation date – On relevant land or other land • Regard to prospect of planning permission, subject to assumptions: – Scheme has been cancelled on the launch date; – No action taken by AA for the scheme (eg acquisitions); – No prospect of the same or a similar scheme in exercise of a statutory function or with CP powers; – For highway schemes, that no highway will be built to meet the same needs • NB Application to other land New Section 14, LCA 1961 Also repeals old Section 15 LCA 1961
  52. 52. Planning assumptions continued • Assume planning permission for the AA’s proposals – No change here – Note complementarity with Rule 3, Section 5, LCA 1961: • Any value attributable to scheme requiring statutory powers is left out of account • Assumption of PP for development within Sch 3, TCPA 1990 is abolished – Mainly concerned buildings which had stood on sites before 1947 TCPA – an anachronism New Section 15, LCA 1961
  53. 53. Section 17 Certificates of Appropriate Alternative Development (LCA 1961) • Certificate must now relate to valuation date, not application date. • Appeals now lie to the Upper Tribunal Lands Chamber instead of Planning Inspectorate
  54. 54. The Creeping Impact of Localism on Land Management • DCLG Circular 06/04: Compulsory Purchase and the Crichel Down Rules – Amended in 2011, p57 • Local authorities must consider requests to use CP powers for community assets that are in danger of being lost, particularly if they come from voluntary or community organisations • Link to Assets of Community Value (Localism Act) and proposed Local Green Area Designations – (Nat Env White Paper): Beware!
  55. 55. A fourth head of claim? Should we be formulating a fourth head of claim? • Valuation of land taken • Severance and Injurious Affection • Disturbance • Matters not directly based on the value of land?
  56. 56. Pattle and Pattle v SoS for Transport [2009] UKUT 141 (LC) • Rule 6, s5, LCA 1961 – Compensation for Disturbance or any other matter not directly based on the value of the land • Lost rent not directly based on value of land (???) – As a disturbance claim, the owner was not in occupation to qualify for compensation – But as any other matter, possession is not required in order to claim
  57. 57. BLIGHT Blight has a strict meaning in compulsory purchase and planning
  58. 58. Blight Notices Procedures Compensation Discretionary Blight
  59. 59. Blight procedures are used to force authority to purchase property from you: compulsory purchase in reverse We need to consider • Who qualifies: Qualifying persons • What is blight? • Procedural aspects • Compensation
  60. 60. To qualify for statutory blight protection you must be one of: 1. Resident owner-occupier of dwellinghouse 2. Owner-occupier of hereditament of less than £34,800 annual value (= rateable value) (England and Wales, £30,000 in Scotland) 3. Owner-occupier of agricultural unit
  61. 61. The property must be BLIGHTED in whole or part • Schedule 13, Town and Country Planning Act 1990 (as amended) e.g. – Roads – Designated in development plan for public authority functions – Draft CPO, or allocated in Special Act AND
  62. 62. REASONABLE EFFORTS TO SELL • Must have FAILED, (other than at substantial discount) Requirement to market property does NOT apply if: • CPO has been confirmed • Special Act shows land required
  63. 63. Procedures • Blight Notice served on • Relevant authority – (i.e. authority which would have CP powers)
  64. 64. Authority Action on receipt of blight notice • Accepts notice, OR • serves Counter- Notice – 2 month time limit for counter-notice, otherwise blight notice becomes valid
  65. 65. Reasons for valid counter-notice • No blight • No qualifying interest • No interest • No intention to acquire • No intention to acquire in next 15 years • Intend to buy only part of the property
  66. 66. Upper Tribunal (Lands Chamber) Claimant refers notice & counter-notice to UT (LC) (formerly Lands Tribunal) 2 month time limit UT (LC) confirms validity (or not), in whole or part
  67. 67. Exercise: extent of blight notice Do you serve Notice for whole of property or just the area affected by the draft CPO?
  68. 68. Material detriment: s8, Compulsory Purchase Act 1965 • Material detriment test where part of a ‘house, building or manufactory’ required for compulsory purchase. • In CP generally, cannot be required to sell part of a ‘house etc’ if there is serious affect on amenity or convenience
  69. 69. Effect of confirmed Blight Notice • Relevant authority deemed to have served Notice to Treat • Which leads to compensation claim under usual headings, e.g. – Land taken – Severance & injurious affection – Disturbance – Home Loss payments (since 1991), Basic and Occupier Loss etc
  70. 70. Farms and Blight • Owner-occupier of agricultural unit must have occupied whole of unit – Including dwellings and buildings occupied for purpose of farming • Section 158 1990 Act: deals with Affected Area and Unaffected Area of farms • Unaffected Area must not reasonably [be] capable of being farmed
  71. 71. Reasonably capable of being farmed • A physical not an economic test – Eg Johnson and Johnson v North Yorkshire • The unaffected area is considered with other relevant land – Land in the same agricultural unit – Land in another agricultural unit of which claimant is ‘owner’ • Freehold or lease > 3 years unexpired
  72. 72. Agricultural Unit Land which is occupied as a unit for agricultural purposes, including any dwellinghouse or other building occupied by the same person for the purpose of farming the land.
  73. 73. So Dealing with a Farm • Establish Blight – reasonable effort to sell needed? • Identify Affected and Unaffected Land • Identify extent of agricultural unit and any other agricultural units • Form view on whether unaffected land is incapable of reasonably being farmed – with other relevant land in same ag unit or other ag unit with owner’s interest • Serve Blight Notice in respect of whole agricultural unit
  74. 74. • Wait up to 2 months for counter-notice • Consider grounds of counter-notice • Refer to Upper Tribunal (Lands Chamber) within 2 months • UTLC confirms in whole or part depending on ‘reasonable capability of being farmed’ • Claim compensation on basis of deemed Notice to Treat
  75. 75. Compensation in farm claims • Usual headings: land taken, S&IA, disturbance, Basic and Occupier Loss etc • HOWEVER – Compensation for unaffected land – Limited to existing use value (s158, 1990 Act)
  76. 76. Discretionary Blight • Much more vague area • Discretionary Blight provisions in Highways Act, Planning and Compensation Act 2004 and Land Compensation Act 1973, s26 • Cover: – Land which is seriously affected by the carrying out of the works – Mitigation of adverse effects arising from the existence or use of public works – From time proposals are published
  77. 77. A discretionary power • Limited guidance • Blight by proximity for roads – Within 100 m of centre line – Reasonable efforts to sell • 20 weeks marketing • Offers at least 5% below MV • Moving for specific reasons: work, dependent relations etc • Qualifying Interests as Statutory Blight
  78. 78. HS2 • Phase 2 Exceptional Hardship Compensation Scheme
  79. 79. Coming to a home near you! Crewe Northwich
  80. 80. Eligible? • Owner occupier private residential property • Owner occupier business premises RV up to £34,800 • Owner occupier agricultural unit • Mortgagees in possession • Personal representatives – deceased had qualifying interest
  81. 81. Criteria 1. Property type and rights therein 2. Location 1. Close to route: likely to be adversely affected 2. But not over tunnel sections 3. Efforts to sell 1. Market for 3 months 2. No offers within 15% of realistic asking price 4. No prior knowledge of Phase 2 when purchased 5. Exceptional hardship
  82. 82. Stats on Phase 1EHS Outcome EHS Criteria 1 2 3 4 5 Accept 367 273 210 390 129 Reject 23 117 180 0 261 Total 390 390 390 390 390 EHS Criteria 1 Property type and interest 2 Location of property 3 Efforts to sell and impact of blight 4 No prior knowledge of HS2 5 Exceptional hardship
  83. 83. • 88% of accepted applications were within 400 m of route • 98% of rejected applications were more than 200 m from route. • 29 applications were accepted despite not meeting all the criteria (n=390) • 0/4commercial applications were accepted • 101/372 residential applications accepted • 3/14 agricultural applications accepted • Overall 104/390 applications accepted
  84. 84. Towards Formal CP&C for HS2 No compensation EHS Statutory blight Formal acquisition and compensation procedures Discretionary Blight Part 1 S10/McCarthy Claims SofS Safeguarding Orders Hybrid Bill ~ Statutory Blight (Sch13, T&CPA1990)
  85. 85. Queens Speech 9 May 2013 HS2 Hybrid Bill • Legal powers for compulsory purchase • Deemed planning permission to construct and maintain the railway High Speed Rail (Preparation) Act 2013 • Authorise govt expenditure • Allow expenditure on design, ecological surveys and other prep work • Require expenditure to be reported • “Demonstrate Parliament’s backing for cracking on with this vital project which already enjoys cross party support”
  86. 86. Current ‘Schemes’ for HS2 Blight Rural Support Zone • 60 – 120 m in rural areas • Owner occupied houses, small businesses and farms • Sell for unblighted value plus some costs • Or 10% cash payment to stay put
  87. 87. Home Owner Payment Scheme • Home Owner Payment • £7,500 to £22,500 (banded) • Comes into effect after Royal Assent Need to sell Scheme (replaces EHS)
  88. 88. Express Purchase Scheme • Applies in Safeguarded Zone – 60 m – Since April 2014 • Streamlined purchase at unblighted value + 10% (max £49,000) • 60 properties worth £54.2 million purchased under EPS by December 2014
  89. 89. Total property purchase HS2 December 2014 • Statutory blight: 60 • EHS Phase 1: 132 • EHS Phase 2: 41 • Total 233 properties, £157.4 million
  90. 90. Fee case Joshua v Southwark • Fee of £31,607 on claim of £129,000 • Reduced to £3,500 – Time allowed – Fee rates of £150 and £200 per hour Brickkiln Waste v NI Elec Board • Necessary wayleave • No evidence of actual devaluation • Nevertheless some injurious affection RAMAC v Kent CC • Value of land taken  existing use • Rest of impact  IA
  91. 91. Contact Details Translating new knowledge for rural professional practice  cdcowap@gmail.com  07947 706505 Twitter: @charlescowap Blog: http://charlescowap.wordpress.com/ Slideshare: http://www.slideshare.net/cdcowap

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