15/11/2017. Land Assembly in Town Centres 20:20 Vision: The Future of our Town Centres. What we will cover. Development Agreements

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1 womblebonddickinson.com Land Assembly in Town Centres 20:20 Vision: The Future of our Town Centres 22 November 2017 Jonathan Bower What we will cover Development Agreements CPO Promotion Making the CPO Implementation Compensation CPO Report update Development Agreements 1

2 Structure Key Drivers Structure Key Drivers Council s objectives: Regeneration, Income & Capital (including overage) Council s appetite for development risk Vires & Available resource Likely Development Scenario Some land in Council ownership Other land in third party ownership EU Procurement Land transactions Enforceable Contractual obligation note Faraday Development Limited v. West Berkshire Council [2016] EWHC2166 to facilitate the comprehensive regeneration of the Property in such a way as to maximise preserve and improve the returns from the Property and development potential of the development sites Best Consideration S.123 LGA 1972./ s.233 TCPA General Disposal Consent Circular 06/03. State Aid Vires Features of a Development Agreement Associated land transaction including provision for resale to Council Rent sharing lease Building lease followed by subsequent freehold transfer Usually conditional Planning consent Highways orders etc. Site Assembly Land interests (freehold and leasehold) Covenants / Easements / Other restrictions on development Anchor tenants Pre-let condition (e.g. 60 % of ERV of Scheme) Building Contract Viability CPO Promotion 2

3 Getting started Key considerations What is the Scheme? What is the extent of the Site? What statutory powers will support the CPO? Is the development which the CPO will deliver supported by Government Guidance & local policy? Need for a compelling case in the public interest to override private interests Negotiations with landowners and public consultation Existing ownership of the site - what interests need to be acquired? No impediments to the Scheme proceeding, e.g. Planning Permission Funding Reasonable timeframe for development to proceed Special Category land Common land/ open space and exchange land Crown land Statutory undertaker land Revised CPO Guidance (England only) Compulsory Purchase Order Schedule Updated guidance on the compulsory purchase process Oct 2015 Procedural guidance substantially the same: more concise, & reflects developments since 2004 Encourages AAs to take into account the overall costs of promoting a CPO in advance of compulsory purchase: "( ) In order to reach early settlements, public sector organisations should make reasonable initial offers, and be prepared to engage constructively with claimants about relocation issues and mitigation and accommodation works where relevant." (page 7) Land referencing- begin well in advance of making CPO Requisitions, survey powers Temporary possession currently no general power in a CPO Prescribed form Interests to schedule following service of requisitions Freehold, lessee and occupier interests Rights to be acquired Easements/ covenants/ restrictions Some subjectivity: S.12(2A) ALA 1981: who the AA thinks is likely to be entitled to make a 'relevant claim' Operative provisions / special additions e.g. mining code 3

4 Committee Report Statement of Reasons Council's authority to use CPO powers; scrutinised by objectors Ensure members aware of land and interests to be acquiredideally append CPO schedule and plan Public Sector Equality Duty - consideration of section 149 of the Equality Act 2010 and actual assessment Consideration of impacts on Human Rights; key provisions are usually: Article 1 respect for peaceful enjoyment of possessions Article 8 respect for private and family life, home and correspondence Set out the compelling case in the public interest Justify the compulsory purchase of land and/or rights So in 'tick box' terms - Project which brings demonstrative public benefits Site suitability Planning permission (policy support) Funding Developer (if applicable) New Guidance (Eng) - Section 11 list now includes new: "(ix) if the mining code has been included, reasons for doing so (xii) what steps the authority has taken to negotiate for the acquisition of the land by agreement Appropriation (1) Appropriation (2) Another matter to pick up in the Committee Report Power to override easements and other rights, including restrictions on use Old section 237 Town and Country Planning Act 1990 repealed July 2016 replaced by sections Housing and Planning Act 2016 Previously LPA power, now broadened categories of specified authority As before, to use the power, need planning permission for the development for which the right needs to be overridden Development which the power is being engaged to deliver must be related to the purposes for which the land has been acquired or appropriated Protection from interference with rights is afforded to statutory undertakers & rights conferred by the electronic communications code, and land belonging to the National Trust 4

5 Appropriation (3) Restrictions on appropriation E.g. housing consent required of the Secretary of State under section 19 of the Housing Act 1985 Compensation (section 204) : consequence of overriding rights is the payment of compensation to the person affected by the interference Primary responsibility is with the party effecting the interference, but if they don't discharge the liability, local authority is liable Period of liability is 6 years from when claim arises the breach first happening could be completion or if a user restriction, when use first commences Making the CPO and Inquiry Process through to Decision On making the CPO If objections received Advertising procedures on making of the CPO (S11-12 Acquisition of Land Act 1981 (ALA) & Compulsory Purchase of Land (Prescribed Forms) Regulations 2004) Notice to those listed in the CPO schedule Newspaper notices Site notices Notice to the relevant Secretary of State (Para 24 CPO Guidance) Objection period- minimum 21 days, ideally allow 28 days Opposed CPO usually requires public inquiry Confirmation of CPO by AA if no objections (or all withdrawn) in certain circumstances (S13 ALA) Follow Compulsory Purchase (Inquiries Procedure) Rules 2007 Notification from PINs on intention to hold an inquiry- 'relevant date' letter Statement of Case within 6 weeks of the relevant date Pre-inquiry meeting (if held) Inquiry within 22 weeks of the relevant date or 8 weeks after the PIM Evidence preparation (statements & summary); submission 3 weeks before the inquiry opens Notice of inquiry 2 weeks before it opens 5

6 Continued negotiations with objectors (1) Continued negotiations with objectors (2) Continued negotiations at all times to seek to reduce objections and appearances at inquiry Aim to enter into agreements between AA and affected parties which are positive for: AA - it demonstrates that deals can be done Claimant de-risks the process & provides certainty Regularly used method for securing withdrawal of objection No 'rules' on content: it s a private treaty but note overarching obligations of a public authority Points to consider for the agreement: Withdrawal of CPO or undertaking not to use powers (or to only use in certain ways)? Conditional/non-conditional Compensation code, or alternative? Dispute resolution Who is bound in what happens if CPO not implemented? Developer fails? At the Inquiry Decision Last minute deals, be ready to negotiate during the Inquiry Paper trail for each objector Ensure you have details of all the objections, statements of case and statements of evidence AA opens and has the final word at the inquiry Timing and order of witnesses Summary statements Cross examination Inspector's report goes to Secretary of State Secretary of State decision Advertising procedures on confirmation of the CPO are similar to on making Triggers 6 week statutory challenge period 18 month timeframe overall from making the CPO to taking possession 6

7 GVDs v NTT: General Vesting Declarations Implementation GVD must be in prescribed form GVD must be executed within 3 years of the CPO becoming operative Notice of Execution of the GVD served on every occupier GVD takes effect (the vesting date) on a date being not less than 3 months after service of the Notice of Execution The date is indicated in the Notice of Execution but confirmed by later certification process when all Notices have been served GVD cannot be executed once a NTT is served unless it is subsequently withdrawn GVDs v NTT: Notice to Treat GVD v NTT: Which to use? No prescribed form for NTT but follow Guidance NTT must be served within 3 years of the CPO becoming operative Notice of Entry must be served within 3 years of NTT Notice of Entry allows entry after a minimum period of 3 months Occupuier may serve a counter notice requiring acquisition no later than a specified date No longer the benefits of early acquisition with NTT GVD cannot be applied to minor tenancies or where long tenancy about to expire Both GVD and NTT can be used to acquire whole or part of Order land NTT can be withdrawn; GVD cannot GVD cannot be used in respect of an interest in land that has already been subject to a NTT 7

8 Implementation by Agreement Temporary Possession of Land (Not yet in force) By agreement, either following service of a NTT or instead of NTT/GVD Provides certainty on compensation ie price set in the agreement: Allows that cost to be passed onto sponsor ie developer via indemnity agreement Likely to have a happier ex-owner Able to set completion date to suit owner/acquiring authority/developer Potential pitfalls: Price should be in full and final settlement of all claims by owner Does accelerate payment of cash; is the budget there and/or is the developer good to meet the cost? Will price paid set an unhelpful precedent? Can the owner deliver a clean title? Does the agreement fetter discretion of acquiring authority to fall back onto powers set out in the CPO? Neighbourhood Planning Act 2017 introduces ability to take temporary possession of land as part of a CPO Must give not less than 3 months notice of entry Notice must specify period land is being taken for Notice must be served within 3 years of the CPO becoming operative Leaseholder/freeholder may serve a counter notice limiting period to 12 months for any part of a dwelling or 6 years in any other case Leaseholder with right to occupy may serve a counter notice that the authority may not take possession Counter notice must be served within 28 days of original notice Authority can accept counter notice, withdraw notice of entry or proceed with compulsory acquisition Compensation: General Principles Compensation Principles and Practice The Principle of Equivalence No better or worse off The Open Market Value No scheme world, open market value without the impact of 'the Scheme' Mitigation of Loss Relocation or Extinguishment Advance Payment: occupier s loss payment & basic loss payment 8

9 Compensation: Heads of Claim Value of Land Taken Valuation date Disturbance Costs and losses Management Time Severance and Injurious Affection Depreciation in value or part retained Professional Fees Pre-reference v post-reference Where is the evidence? CPO Report Update CPO Report: Key messages CPO Report: Statistics CPOs are a vital tool for regeneration Success rates remain high Planning CPOs submitted 87% succeeded Planning CPOs submitted 82% succeeded There are a range of reasons, from technical to evidential, why some CPOs are not confirmed A large number of local authorities use compulsory purchase powers, but do so sparingly 9

10 CPO Report: Statistics CPO Report: Determination 2015 and 2016 figures are towards the lower end of the range of CPOs submitted annually No sign of a return to prerecession levels Unopposed Planning CPOs take an average of 98 days to determine (excluding 2 outlier decisions) Opposed Planning CPOs take an average of 383 days to determine It appears more CPOs are being determined by written representations CPO Report: Orders not confirmed The Liverpool City Council (Welsh Streets Phases 1 and 2) Compulsory Purchase Order CPOs not confirmed in 2015 and 2016: Liverpool, Stroud, Hastings, Hartlepool, Southwark Of which: 3 determined by public inquiry; and 2 determined by written representations The scheme was for the redevelopment of a site including construction of new homes and refurbishment of existing houses Objection submitted by Save Britain's Heritage: they submitted there were better alternatives, the public benefit did not outweigh the harm and the scheme did not comply with local and national planning policy The Inspector recommended confirmation, but the Secretary of State disagreed Reasons not confirmed: There was a conflict with the Ministerial Statement and the Council had failed to assess alternative schemes 10

11 The Stroud District Council (Stroud Water Navigation and Thames and Severn Council)(No 12)(Lodgemore Bridge) Compulsory Purchase Order 2015 The Hastings Borough Council (55 Victoria Avenue) Compulsory Purchase Order 2014 The CPO sought to acquire 0.005ha to facilitate the replacement of an existing rigid canal bridge The Hartley Property Trust Ltd lodged an objection because there were discrepancies between the order and the planning permission and the CPO would prejudice the objector's ability to develop its own land The Inspector concluded that the CPO was not needed because the bridge had already been replaced by the time of the site visit Reasons not confirmed: No longer any need for confirmed order and the Council made a late attempt to change the purpose of the CPO The CPO sought to acquire an end of terrace house which was not in a habitable condition The owner objected as the house was required to provide future income and he fully intended to refurbish the house At the time of the site visit the refurbishment was substantially complete Reasons not confirmed: The owner had carried out improvements, there was a lack of detail in the Council's case as to compliance with Guidance and the Council had failed to assess alternatives The Council of the Borough of Hartlepool (Longscar Building, The Front, Seaton Carew) Compulsory Purchase Order 2015 The London Borough of Southwark (Aylesbury Estate Site 1B-1C) Compulsory Purchase Order 2014 The CPO was for the acquisition of the Longscar Building to improve the amenity of the seafront The owner objected on the basis it was planning to refurbish and re-open the building for leisure use Reasons not confirmed: the planning permission was not conclusive of need, the matter was finely balanced so the Inspector gave the owner the "benefit of the doubt" A planning application for refurbishment has yet to be submitted by the owners nearly a year later The most high profile order in recent years The CPO was for part of a phased regeneration to deliver 4,000 homes, two previous CPOs had already been confirmed and the first houses were ready for occupation The Inspector found considerable economic and social disbenefits in terms of consequences for existing leaseholders Reasons not confirmed: The Council did not take reasonable steps to acquire by agreement and so it had not complied with its public sector equality duty Secretary of State's decision quashed and a new public inquiry to be held in Q

12 Contact us Jonathan Bower Partner T: E:

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