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Compulsory purchase: your rights if your property is subject to a CPO

Felicity Hannah
by Lovemoney Staff Felicity Hannah on 08 November 2012  |  Comments 7 comments

The letter lands on your doormat, warning that your home is to be compulsory purchased. Where do you stand if you do want to go? And what are your rights on compensation?

Compulsory purchase: your rights if your property is subject to a CPO

Compulsory purchase orders (CPOs) have been in the news a lot recently. Liverpool families living in the shadow of Anfield stadium face being turfed out of their homes to make way for an expansion.

And further south, hundreds of households in the path of the planned High Speed Rail (HS2) route could be forced to sell up.

Not all compulsory purchases are this high profile, but it must be extremely upsetting for any household to be forced to sell up. Unless you’re keen to move already, a CPO could feel like an eviction notice from a house you’re deeply attached to.

So what are your rights if one lands on your doorstep?

Who can issue a CPO?

The vast majority of purchase orders will be made by local authorities. So in the Anfield case, for example, the football club isn’t able to issue the CPOs. Instead, it’s working with Liverpool City Council, which has said it could be issuing the orders very soon.

Residents might be dismayed at losing their homes next to the historic football club, but at least it will be an end to the uncertainty that has dogged them over recent years and made many properties there virtually unsellable.

In order to issue a CPO, the local authority must be able to show that the planned development is in the public interest.

The would-be acquirer should also show that they have attempted to purchase your property with your agreement before issuing the CPO. The good news is that a purchase order is unlikely to arrive out of the blue.

How much money can you get?

The idea of a CPO is that the property owner should be in no worse a position as a result of the purchase and that all costs that can reasonably be associated with it are met. Unfortunately, they aren’t entitled to be better off as a result either, so a CPO is rarely a windfall.

Homeowners should be offered an amount that covers the market value of the property, professional fees, moving costs and a payment for the disturbance.

However, you have a duty to ‘mitigate’ any losses or you risk not receiving full compensation. For example, if you need a removals firm to shift your belongings then you should get quotes from three and choose the cheapest reputable firm.

Residents affected by the HS2 high speed rail link plans have been offered the value of their properties plus an additional 10%, up to a maximum value of £47,000.

They are also being offered the chance to sell their homes now and rent them back until the land is needed, to give them greater flexibility.

Sometimes a project or development will increase the value of property in an area. For example, the redevelopment of the Anfield site is likely to do so in Liverpool.

However, if your home is subject to a compulsory purchase, you’re unlikely to qualify for additional compensation as a result of the project enhancing the value.

Can you appeal?

If a CPO letter lands on your doormat and you’re less than delighted, all is not lost. You can object to the order and should do so within 288 days.

Any objections you raise must relate to the actual planned project, rather than because you don’t feel you’ve been offered enough compensation.

Once all objections are in, there will be a public enquiry into the project and it’s up to Parliament whether or not the CPO goes ahead. This can be a really long process, often taking more than a year and a half.

How soon will you have to leave your home?

After a CPO has been approved, the authority acquiring it has to act within three years, or its right to do so will end.

What if your home is affected but not purchased?

While it may be bad news that your home is to be purchased and knocked down, it could be even worse to discover your property will be devalued by a nearby development.

A power station, a train line, a motorway; close proximity to these kinds of projects can easily knock the value of your home.

You can potentially claim for a loss of value caused by the eventual use of a new development, but also for a reduction in the value caused by the actual construction.

The amount you could claim will depend hugely on the project being undertaken and the impact it will have on your home and its value. There’s a really useful flow chart available in the Government guide Compulsory Purchase and Compensation Booklet 4: Compensation to Residential Owners and Occupiers which can help.

If your home is already on the market when the plans are made public, then that can understandably affect your ability to sell it. If you have to dramatically reduce the price in order to make a sale, you could have a right to compensation, even if the order doesn’t go ahead.

Of course, the information in this article can only be general and doesn’t constitute legal advice. So much depends on the individual circumstances that it’s important to consult an independent legal adviser as soon as you’re made aware of the local authority’s plans.

Finding advice

If you’re affected, get legal advice as soon as possible.

This could be from a local solicitor or chartered surveyor, who can advise you on your rights in your specific case and act on your behalf.

If you’re on a restricted income then you may be able to get some financial help towards this cost. More information on this is available in the leaflet ‘The Community Legal Service’, which you can pick up at your local Citizens Advice Bureau or Legal Services Commission.

There’s also a limited amount of free advice available. The Royal Institution of Chartered Surveyors operates a Compulsory Purchase Helpline, which puts you in touch with local chartered surveyors. They will provide up to 30 minutes of free advice.  The helpline number is 0870 333 1600.

Have you ever fought a Compulsory Purchase Order? Do you think it’s right that a homeowner can be forced to sell? Share your thoughts with other readers in the comments below.

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Comments (7)

  • leaseholdreform
    Love rating 0
    leaseholdreform said

    I have a flat in Rowner - the Rowner Regeneration is credited to be a £144 million-pound regeneration— there was a problem at rowner --for seven years the 301 flat owners went to the Leasehold Valuation Tribunal over large service demands...

    In 2005, Taylor Woodrow bought a five-year option of the freehold--from the freeholder.

    Since that date, most of the 301 flats have sold to Gosport Council for around £20,000 for a two bed flat--or have traded it in for a new 25% share of a one bed flat--this means paying around £300 pcm in rent as well.

    The thing that I don't understand is that even though we have all been under the threat of

    CPO -- we have not been offered the same legal basics of CPO--our flats are being valued on their internal conditions--the fact about " you should get like for like "does not apply!

    Report on 11 November 2012  |  Love thisLove  0 loves
  • spencerturner
    Love rating 0
    spencerturner said

    If you are affected-or potentially affected, advice is also available from the compulsory purchase association-this is a multi disciplinary organisation, with members who can assist in all necessary professions. For more details see www.compulsorypurchaseassciation.com

    As a general rule, householders can get the following:

    -Market value for the house, assuming the sum that could have been achieved if sold in the market, assuming that the CPO never was to happen.

    -Home Loss, which is an additional 10% subject to a minimum and maximum sum that is reviewed periodically(was every year from 2001-2008).

    -Disturbance-to cover removal costs, and other items consequent to the CPO.

    Ir is important to realise that the process seeks to achieve as close a match as can be achieved--unfortunately this will mean that any element that ends up bigger, better or newer will not be claimable.

    Businesses will always need to get specific advice.

    In most cases, fees well be claimable as part of the compensation-but advice needs to be sought over the terms for this, from the start.

    Report on 11 November 2012  |  Love thisLove  0 loves
  • sludgeguts
    Love rating 56
    sludgeguts said

    I have a friend who is to be thrown out of his family home because of HS2 - a house that his family have lived in for generations, he has lived there for 50 years. It's not a mansion nor is it anything you would see on the cover of a magazine - but it's a nice house.

    THE most laughable thing about this situation - if he were in prison, he would be given all sorts of 'rights' under the human rights act ** and yet as an honest, decent, hardworking taxpayer, he gets diddly squat. Yes he is offered compo which is comparable to similar houses in the area but why should he be forced out of his home? Where are his human rights? **you only have to look at the many cases of terrorists, rapists etc who claim that they cannot be deported on human rights grounds as they will be persecuted in their own country - and, for the most part, they end up staying in our prisons.

    He has looked into this issue and it seems that HRA does not apply if there is a government order - so what makes them such a high authority? A government that only just got in by the skin of its teeth, a government that the majority of voters did not want in power.

    Report on 11 November 2012  |  Love thisLove  0 loves
  • alanbaker
    Love rating 0
    alanbaker said

    We had a 4 bedroom terraced house in Leeds about a mile from the university we let the property off as 3 flats and we didnt live there.

    We got a cpo on the property and we only got the rateable value due to us not living in the property.

    Our friend who lived next door got full house value and offererd a house to rent.

    Is this normal.

    This was back in 1976.

    Alan baker

    Report on 11 November 2012  |  Love thisLove  0 loves
  • leaseholdreform
    Love rating 0
    leaseholdreform said

    The Rowner Regeneration— Gosport Council now owns around 274 of the 301 leasehold flats--much of the of the site has been demolished, and a new Tesco will be opening its doors in March 3013— we will be CPOed on the 30th of November 2012.

    It is impossible to get from the Land Registry Office valuations of these 274 flats as they are being treated by them as NOT the market value -- but as acquisitions, by the council, therefore, we can't view the prices that they have paid for them!

    Report on 11 November 2012  |  Love thisLove  0 loves
  • CuNNaXXa
    Love rating 410
    CuNNaXXa said

    I remember when Tescos wanted to build a store behind the Southampton Road houses near Cosham. They issued a Compulsory Purchase Order via their friend, the local council.

    How can anyone argue that building a Supermarket will benefit anyone other than the supermarket owner.

    Naturally, many owners resisted offers made, until the CPO's started popping through letterboxes.

    People have been kicked out of properties so that other people can profit. Where is the sense in that?

    Report on 11 November 2012  |  Love thisLove  1 love
  • rbgos
    Love rating 86
    rbgos said

    Donald Trump has being trying to evict homeowners in countryside north of Aberdeen because he considers their properties to be eyesores around his shiny new golf course - even though the golf course can be built with them still there! After much outcry, he's given up on the CPOs, but the council were ready to back him at one point.

    While I think the resort will be good for Aberdeen's economy, the arrogant approach of Trump and particularly his threats of CPOs are utterly reprehensible.

    Report on 12 November 2012  |  Love thisLove  1 love

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