The recent High Court judgment in Euro Accessories Limited  EWHC 47 (Ch) has shed some light on the interpretation of “fair value” for a compulsory transfer initiated by a...
Obtaining or objecting to Compulsory Purchase Orders
Certain statutes allow public bodies to acquire property to enable them to carry out public development projects (within their statutory functions) where the landowner is not willing to sell by agreement. These projects might involve the construction of new transport infrastructure or public buildings, such as hospitals and schools. However, the purpose must be ‘for the public good’ and not for personal profit or gain.
The intention of a CPO is to require a landowner to sell. However, the sale does not have to happen immediately, and the process could take years to complete. Even then the application may be rejected. For instance, the HS2 project is governed by several pending hybrid Acts of Parliament which means the power for compulsory purchases first requires such Acts to obtain Royal Assent. This could take as long as 10 years to complete. Often, however, the homeowner is offered a compensation package and encouraged to sell their property voluntarily by agreement.
If you are forced to sell your property then you must be paid the current market value, assessed without regard to any increase or decrease in value arising from the proposed project, plus an additional 7.5-10% in compensation. You may also be able to claim compensation for connected issues, such as disturbance, that can recoup some of your costs of purchasing a new property. The general principle of compensation being that an owner should not be left worse off than if the land had not been acquired but, by the same token, the owner should not gain any undue advantage.
Simply ignoring any correspondence concerning the compulsory purchase of your property could compromise your legal rights and entitlements under the law. This could include your ability to challenge the legal authority of the proposed compulsory purchase (and the proposed project) being affected or leaving you unable to dispute the value of the assessed compensation by the acquiring authority. It is important to respond in all cases and to seek legal advice to guide you through the process, either through the Institute of Chartered Surveyor’s CPO helpline, or your legal representative.
Whilst you can object against a compulsory purchase and, importantly, the specific project for which such powers arose, be prepared for a long and potentially expensive battle. The organisation seeking to acquire your property must disclose all contact details of the appropriate government minister in charge of the process.
You can also object in person, or even try to negotiate a better price for your property but, again make sure you have legal representation and advice available before entering any negotiations.