What are compulsory purchase and statutory rights?
This is when central government, a local authority or a private company has the legal right to buy or take rights over your property if it falls within a public or private development project. Such projects range from large scale airport expansions through to smaller scale expansions of sewer, water or gas pipelines.
In all cases, owners and occupiers directly affected by a project are served 'notice', and will be offered 'compensation' to reflect the losses and disturbance caused by a compulsory purchase or a 'statutory' scheme.
Notices
Authorities wishing to acquire land or rights by compulsory purchase have to serve each individual who will be affected with a notice stating the effects of the scheme. This includes landowners, tenants, occupiers, nearby residents, and so on.
The notice will state a period of time within which people can object to the scheme. The period must be at least 21 days from the date the notice is served.
Objections
Objections need to be submitted, in writing, to the 'acquiring' authority within the time period set out in the notice. Only objections to the development scheme which are made within the stated period by people who will be directly affected have the right to be heard at a Public Inquiry.
'Acquiring' authorities will usually try to negotiate with objectors prior to the Public Inquiry. They may be prepared to change a scheme to allow the objection to be withdrawn.
We would strongly advise that before withdrawing an objection, you make sure that any agreement reached is contained in a legally enforceable agreement. Your solicitor will be able to advise on this.
Compensation (when land is taken)
Compensation received following compulsory purchase of land is based on the principle of 'equivalence'. This means that you should be no worse off or better off in financial terms after the loss of the land than you were before.
People affected by a compulsory purchase order are expected to 'mitigate' (or minimise) any losses incurred by them as a result of the compulsory purchase or statutory scheme. If your losses are increased as a result of your actions (or lack of action), you will not be entitled to receive compensation for these losses.
If you receive a compulsory purchase order to purchase your land, or a statutory notice to lay pipes or cables, it is up to you to tell your local authority how the scheme will affect you and your property. For example, you will need to explain exactly how it will affect your enjoyment of your property.
Once the compulsory purchase process starts, it is important that you keep records of all communications with the 'acquiring' authority. Also, you must keep a record of all the expenses you have incurred and the losses you have sustained. This will give you a stronger basis for recovering these costs as part of your claim for compensation.
It is important to know that the effect of a compulsory purchase order on the value of a property is not taken into account when compensation is assessed. The value of the land and / or property is worked out on the basis of its open market value, without any increase or decrease in that value which might result from the development scheme.
Compensation (when no land is taken)
A right to compensation sometimes arises when no land is taken, but when statutory powers are exercised. In these circumstances, your claim for compensation should include any reduction in the value of your land or property caused by both the construction of the public works, and also by the use of the works following construction.
Compensation for the adverse effects of development
As well as decreasing the value of land, development works can cause inconvenience and discomfort to people living in the area. 'Acquiring' authorities have certain duties and powers to take action which will help to reduce the impact of a development scheme. These actions are known as 'mitigation works'.
If you are affected by a compulsory purchase scheme or statutory works, you should ask for mitigation works. These can limit the effects of a scheme on your property. For example, if a road is to be built at the end of your garden, mitigation works could include a tree planting scheme to reduce the effects of increased traffic noise.
More information
More information on compulsory purchase and compensation is contained in guidance booklets 1 to 5 of the ‘Compulsory Purchase and Compensation’ series of publications which is produced by the Department of Communities and Local Government. To see these documents, click here.
