Compulsory purchase in England and Wales

Compulsory purchase is the power to acquire rights over an estate in land, or to buy that estate outright, regardless of the willingness or otherwise of its current owner, in return for recompense. In England and Wales Parliament has granted several different kinds of compulsory purchase power, which are exercisable by various bodies in various situations. Such powers are "for the public benefit", but this expression is interpreted very broadly.

Perhaps the most general power originally appeared in the Leasehold Reform Act 1967. Under that Act, the Leasehold Reform Act 1987, and the Leasehold Reform, Housing and Urban Development Act 1992, private individuals who are leaseholders have the power in certain circumstances to compel their landlord to extend a lease or to sell the freehold at a valuation. Utility companies have statutory powers to, for example, erect electrical substations or lay sewers or water pipes on or through someone else's land. These powers are counterbalanced by corresponding rights for landowners to compel utility companies to remove cables, pipes or sewers in other circumstances (see for example S185 of the Water Industry Act 1991).

Recompense, under compulsory purchase, is not necessarily a monetary payment of open market value (see James v United Kingdom Government [1986]), but in most cases a sum equivalent to a valuation made as if between a willing seller and a willing purchaser will fall due to the previous owner.

Compulsory purchase only applies to the extent that it is necessary for the purchaser's purposes. Thus, for example, a water authority does not need to buy the freehold in land in order to run a sewer through it. An easement will normally suffice, so in such cases the water authority may only acquire an easement through the use of compulsory purchase.^[1]

Procedure

In most cases a Compulsory Purchase Order (CPO) is made by the purchasing authority or the Secretary of State. The CPO must unambiguously identify the land affected and set out the owners, where these are known. The order is then served on all owners and tenants with a tenancy with more than a month to run, or affixed to the land if some owners or tenants cannot be traced. A period of at least 21 days is allowed for objections.

If there is a valid objection that is not withdrawn, an inquiry chaired by an inspector will take place. The inspector reports to the Secretary of State. If the Secretary of State confirms the CPO, then it becomes very difficult to challenge.

Once the CPO is confirmed, the purchasing authority must serve a Notice to Treat within three years, and a Notice of Entry within a further three years. It may take possession of the land not less than 14 days after serving the Notice of Entry.

The Notice to Treat requires the land's owner to respond, and is usually the trigger for the land's owner to submit a claim for its value. If no claim is submitted within 21 days of the Notice to Treat, the acquirer can refer the matter to the Lands Tribunal.

If the land's owner cannot be traced and does not respond to a Notice to Treat affixed to the land, then the purchasing authority must pay the compensation figure to the Court.

Crichel Down rules

The Crichel Down principles oblige central and local government, when, having acquired an estate compulsorily, they find they no longer need it, to offer it in the first instance to the person from whom they acquired it at its market value. However, this only applies where the land has not materially changed in character, and does not withstand the principle that councils may not dispose of land "for a consideration less than the best that can beobtained".^[2] This means that where it is difficult to value land for some reason, the land may need to be sold by tender or auction.

Partial table of statutes

• Acquisition of Land Act 1981
• Acquisition of Land (Assessment of Compensation) Act 1919
• Acquisition of Land (Authorisation Procedure) Act 1946
• Channel Tunnel Act 1987
• Compulsory Purchase Act 1965
• Compulsory Purchase (Vesting Declarations) Act 1981
• Highways Act 1959
• Highways Act 1980
• Land Charges Act 1972
• Land Compensation Act 1961
• Land Compensation Act 1973
• Leasehold Reform Act 1967
• Local Government Act 1972
• Planning and Compensation Act 1991
• Planning and Compulsory Purchase Act 2004
• Transport and Works Act 1992
• Water Industry Act 1991

Partial table of statutory instruments

• Compulsory Purchase by Ministers (Inquiries Procedure) Rules 1967
• Compulsory Purchase by Non-Ministerial Acquiring Authorities (Inquiries Procedure) Rules 1990
• Compulsory Purchase of Land Regulations 1990

Bibliography

• Denyer-Green, Barry: Compulsory Purchase and Compensation, 8th edition. London: The Estates Gazette Limited, 2005. ISBN 978-0-72820481-9
• Sydenham, Angela; Monnington, Bruce; and Pym, Andrew: Essential Law for Landowners and Farmers, 4th edition. Chapter 8: Compulsory Purchase and Compensation. pp. 118–135. Oxford: Blackwell Science Limited, 2002. ISBN 978-0-63205796-3

Notes

1. ^ Although this principle protects the land above the pipe, in practice, water pipes and their associated manholes and inspection chambers are owned by the water authority in fee simple, until the pipe reaches the boundary of the property it serves, irrespective of who owns the land above.)
2. ^ Local Government Act 1972, section 123.