RTPI SW Workshop: Compulsory Purchase policy and law David Richardson, Ashfords Elisabeth Osborne, Ashfords Simon Mole, Carter Jonas
Scope of the workshop Update on recent changes to the law of compulsory purchase. Scenario 1 (CPO procedure) + discussion. Scenario 2 (CPO compensation) + discussion. General discussion: the future of CPO? What are the political parties saying, and can it be a key tool to fix the housing market?
Compulsory Purchase Update Simon Mole, MRICS Partner, Carter Jonas LLP
Housing & Planning Act 2016 Quick Overview Royal Assent - 12 th May 2016 1. Rights to enter and survey land 2. Notice to Treat/Notice of Entry 3. General Vesting Declaration 4. Confirmation of Compulsory Purchase Orders 5. Judicial Review Majority of changes are now in force Some changes are subject to transitional provisions Overall Aim: Clearer, Faster & Fairer
Rights to Enter and Survey Land S172- S179 HPA 2016 In Force Old Provisions Limited range of survey powers available to certain acquiring authorities through numerous Acts New H&PA Provisions General power applying to all* acquiring authorities. New right for a person authorised by an Acquiring Authority to enter and survey or value land in connection with a proposal to acquire an interest in or a right over land Definition of Acquiring Authority means the Minister, local authority or other person who may be authorised to purchase the land compulsorily Compensation limited to damages => Lands Chamber to deal with disputes
Rights to Enter and Survey Land S172- S179 HPA 2016 In Force Restrictions on Exercising Power May only enter land at a reasonable time May not use force unless a warrant has been issued If unoccupied/occupier absent => must leave land as secure as it was upon entry Authorised Person must if required produce: Evidence of authorisation A copy of any warrant Crown Land permission from appropriate authority (s293 TCPA 1990) Statutory Undertakers objection within 14 days on grounds seriously detrimental to carrying out of undertaking => need authorisation from Secretary of State
Rights to Enter and Survey Land S172- S179 HPA 2016 In Force S174 - Notice Requirements 14 days prior notice Served on every owner and occupier Notice include: a. Statement of recipient's right to compensation b. A copy of the warrant (if applicable) Notice must include details of any: i. Searching, boring or excavating ii. Leaving apparatus on land iii. Taking samples iv. An aerial survey v. EIA Directive or Habitats Directive compliance related activities
Rights to Enter and Survey Land S172- S179 HPA 2016 In Force S173 Warrant authorising use of force to enter and survey land Warrant can be issued by magistrate if they are satisfied: a) that another person has prevented or is likely to prevent the exercise of that power; and b) Reasonable to use force Force limited to what is reasonably necessary Warrant must specify number of occasions AA can rely on it Neighbourhood Planning Act Changes Extension of survey powers => Acquiring Authorities seeking Temporary Possession Powers (NOT IN FORCE)
Notice to Treat/Notice of Entry S186 HPA 2016 In Force (powers authorised on or after 3 rd February 2017) RECAP: Notice to Treat allows AA to take permanent possession of land before legal title is transferred. Property transfer takes place following agreement/determination of compensation. Notice of Entry served alongside or after service of NTT providing notice that possession will be taken Minimum Notice Period Old Rules: - Notice of Entry: allowed AA to take possession with at least 14 days notice New Rules: - Notice of Entry: allows AA to take possession with at least 3 months notice
Notice to Treat/Notice of Entry S186 HPA 2016 In Force (powers authorised on or after 3 rd February 2017) Further Notices of Entry Where: a) AA served Notice of Entry b) Not yet taken possession c) Become aware of additional party not yet served with a notice (but should have been) Previous NoE remains valid BUT must serve new NTT + NoE on additional party Possession can be taken once notice period for new NoE has elapsed New NoE minimum notice period is either: a) 14 days where: Person is occupier & AA given misleading info Person is not an occupier b) 3 months - In all other cases
Notice to Treat/Notice of Entry S187 HPA 2016 In Force (powers authorised on or after 3 rd February 2017) Counter-Notice Party served with NoE can serve a counter notice requiring AA to take possession by a certain date This date must be: a) Not before end of notice period stated in NOE (i.e. at least 3 months) b) At least 28 days after counter-notice serve Where occupier gives up possession prior to specified date then the AA are treated as having taken possession on that date KEY POINT: AA must carefully consider when to serve notice of entry
General Vesting Declarations S183-S185 - In Force (powers authorised on or after 3 rd February 2017) Old System Notice of Intention - provided at least 2 months notice of AA s intention to execute a GVD - No legal obligation for AA to acquire the land Execution of GVD - Once executed AA the property will transfer to AA at confirmed Vesting Date - Vesting Date: 28 days notice New System Notice of Intention abolished GVD minimum notice period changed from 28 days to 3 months Result: occupiers will have greater certainty throughout full notice period
Judicial Review S201-202 In Force Quashing the Decision Old Rules Aggrieved Parties - 6 weeks to make application to High Court Successful legal challenge => the Order is quashed => restart whole process Changes New power for High Court to quash the decision to confirm the Order either generally (i.e. powers can be reconfirmed without public inquiry) or so far as it relates to applicant s property (i.e. AA will still be authorised to acquire other property interests) Extension of Time Limit on Powers New powers to stop the clock on time limits for exercising powers when legal challenge occurs Clock is stopped for period between lodging challenge and it being resolved BUT up to 1 year.
Neighbourhood Planning Act 2017 Royal Assent - 27 th April 2017. Key Changes: 1) Changes to No Scheme World Principle (IN FORCE) 2) Temporary Possession Powers (NOT IN FORCE)
Neighbourhood Planning Act 2017 Changes to No Scheme World Principle In Force Complex historic arrangement regarding how to adjust for the scheme in valuation terms Pointe Gourde Principle. NPA 2017 has sought to simplify the position Assumed the scheme (being the CPO) was cancelled on the relevant valuation date; Assumed that no action has been taken by the acquiring authority for the scheme; No prospect of the same scheme or any other project being carried out in the exercise of a statutory function or by the exercise of CPO powers; No prospect of the same scheme or any other project being carried out in the exercise of a statutory function or by the exercise of CPO powers if the scheme had been cancelled on the relevant valuation date; If there was a reduction in value of the land as a result of: The prospect of the scheme (including before the CPO was authorised) The land was blighted as a result of the scheme This is to be disregarded in the calculation of compensation Where a transport scheme allows regeneration which is secured by a separate CPO, the value added by the transport scheme will be disregarded.
Neighbourhood Planning Act 2017 New Temporary Possession Powers Not In Force Temporary powers already available to DCOs, TWAs but not CPOs Aims to provide powers across the board on a consistent basis Principles in the Act DCOs and TWAs brought into the NPA regime. Any Order that can include permanent acquisition will be able to include temporary use Order must state o purpose temporary use is for o o land affected total period over which temp powers may be used (but not dates)
Neighbourhood Planning Act 2017 New Temporary Possession Powers Not In Force Using the new powers (s21) Must give 3 months notice before taking entry Must state period of possession in the notice May serve subsequent notices for further period(s) but only with life of the Order May not end possession early unless all affected parties agree Those affected may serve counter notices limiting duration of temp. possession Compensation (s23) Any loss or injury for those with an interest in or right to occupy the land If carrying on a business includes loss for disturbance of business due to having to quit the land for the period of occupation
Scenario 1 CPO procedure Your authority has made a compulsory purchase order to facilitate land assembly for a mixed use town centre redevelopment. Members resolved to make the Order having seen draft CPO papers. Since that time, it has come to light that a small number of interests within the CPO redline are not listed in the CPO schedule, and equally some interests that are needed are in fact outside of the red line of the CPO. No thought has been given to whether rights are needed. The scheme the CPO supports has only recently been granted planning permission, but a judicial review action has been launched by objectors seeking to quash the permission. A stopping up order will also be required for the scheme to proceed, but this has not yet been applied for. To complicate matters, the developer has backed out of several of its commitments on developments elsewhere, and has asked to assign the CPO indemnity agreement to another group company. In the absence of the Council officer with most experience in CPO, who is snowed in, you have been asked to brief your service lead as to the status of the CPO and whether there are any red flags on the horizon (and if so what to do about them), as it has proved politically contentious and members are often in touch with officers asking for information.
Scenario 2 CPO compensation: urban extension of a Somerset Market Town
Scenario 2 CPO compensation: key points Current use is agricultural, land extends to 30 acres. Existing use value: circa 270,000. Land was included in the Call for Sites as being suitable for an urban extension. It was allocated as suitable for housing in the updated Local Plan (formally adopted in 2014). A national housing developer secured a 5 yr option in 2013 with the ability to extend for 5 yrs. The developer achieved planning permission in 2016 for 300 units (25% affordable housing). The local area is under severe housing pressures at all levels and the LPA is keen to ensure both sustainable growth to attract employers, and the viability of the town. The developer appears to be dragging their feet in implementing the permission which expires in 2019. The authority wishes to promote a CPO to acquire the land and procure a development partner to carry out the development in accordance with the planning permission to provide much needed housing. The land value as consented residential development land is worth in the region of 15,000,000.
Scenario 2 CPO compensation: questions How much should the authority pay for the land; or how much compensation should be paid? How will the authority ensure viability (a justification for the use of CPO) any more than the private sector? How does this interact with the compensation code and Human Rights legislation? When and how should any planning gain be captured? At the point of the gain being realised or through the completion existing CIL/S106 agreements Should there be a use it or lose clause inserted into the planning permission?
Discussion: what is the future of CPO? Conservative review of o o o build out speeds/ delivery of new homes land banking Labour proposals to change compulsory purchase compensation rules o Allow for CPO without payment of hope value
Conservative proposals Housing White Paper Fixing our broken housing market Feb 17. Autumn budget announces Independent review to tackle barriers to building. MHCLG review Jan 18 chaired by Sir Oliver Letwin: o o o Look to explain gap between number of permissions being granted against those built in areas of high demand. Stage 1 Information gathering/ Stage 2 recommendations. consider how to avoid interventions which might discourage house building or hinder the regeneration of complex sites.
Conservative proposals We ve got a housing crisis. We ve got no time for anyone who is just anti-development for the sake of it. I ve told Homes England, You mustn t be reluctant to use the powers of compulsory purchase when necessary. Often once it s well understood in the industry that you will be willing to use those powers and be more activist about it, you will find actually people quickly come on board and say no need for that, let s come to a deal. Sajid Javid Use it or lose it? Can the market be forced?
Labour proposals Proposals to allow for CPO without payment of hope value o change in the Land Compensation Act 1961 to allow compulsory purchase land at a price that excludes the potential for future planning consent. o o Creation of English Sovereign Land Trust cut cost of building 100,000 council houses a year by c. 10bn? The principle behind this idea is simple: the additional value of land publicly created by the granting of planning permission should flow to the local community rather than just as windfall profit to big developers, landowners and land agents. John Healey Feb 18
What do you think? Opposition/ support for the proposals Does land banking take place and if so is it prevalent? Use it or lose it can it work? Increase delivery of social housing? Should compensation ignore development / hope value? Should LPAs have broader CPO powers more akin to development corporations or Homes England? Realistically, is CPO too complex and costly to be a real factor?