Running off empty

Great Yarmouth Council has built up a specialist expertise in handling compulsory purchases of empty homes for other local authorities. Chris Skinner explains what is involved.

At Great Yarmouth, the legal team offers something unique – besides carrying out work for the borough council, it has for some time provided a compulsory purchase service to other councils in England.  

There are two reasons for this: firstly, Great Yarmouth Council has for many years made wide use of its compulsory purchase powers and has built up expertise in this area; secondly, I have regularly lectured on the subject of CPOs. It was decided to put this experience to good use by setting up the consultancy service at Great Yarmouth Council in 2007.

Over the past couple of years we have dealt with all sorts of CPOs. Projects have included: land required for a travellers site in Lincolnshire; acquisition of a garage in Suffolk sold under the right to buy to enable an affordable housing scheme to proceed; and acquisition of a derelict hotel in Margate to enable a development project to go ahead.

Dealing with empty homes

However, by far the majority of the CPOs we deal with relate to empty properties. Empty homes are high up on the government’s agenda these days. Not only are they a wasted housing asset, but they are often scruffy and unkempt, and a nuisance to those living nearby.

Compulsory purchase of such properties can achieve a real gain to the local community. Of course, compulsory purchase might not be appropriate in all cases. It might be possible to achieve improvement to the appearance to the property by serving an amenity notice under section 215 of the Town and Country Planning Act 1990. It is possible that an empty dwelling management order might be appropriate.  

Compulsory purchase, though, does have the benefit of resolving the problem once and for all. Typically, when an empty property has been acquired, it is sold, sometimes by auction and sometimes through an estate agent, with a covenant that it is improved and reoccupied within set time periods. Such a covenant provides an answer to those who claim that the house may still remain empty and in a poor condition in the hands of the new owner.  

Empty property CPOs can generally be made under either section 17 of the Housing Act 1985 or section 226(1)(a) of the Town and Country Planning Act 1990. It matters little which power you decide to use. You must however remember that the planning power is only available where the property has a scruffy appearance and is in need of “improvement”. When the property looks satisfactory, then you can only use the housing power. As a rule of thumb about 75% of the empty property CPOs we deal with are under the planning powers.

Simpler and less expensive than you might think

Sometimes people think that the CPO process is particularly long and complicated. This is not the case. About 50% of orders do not receive an objection and can be confirmed by the local authority quickly. By way of example, a recent CPO made for Arun District Council was confirmed within three months, and within a further seven months it had been sold to a new owner. In the timescale of local government resolving a long-standing problem within 10 months is not bad.

What evidence do you need to get a CPO confirmed? Well, you must show that: the property has been empty for some time (at least two years would be a good rule of thumb); the council has tried to get the owner to bring the property back into use himself; and without the CPO there is every likelihood of the property both deteriorating and remaining empty for the future.

How do councils finance a CPO in these cash strapped times? Well, some authorities actually have an empty homes budget, to cover the acquisition costs of an empty property. In many cases however, the costs are not so great. The property is generally sold long before the compensation is paid over, and the money from the sale will meet most of the compensation claim.  

Budgeting for success

What does a council need in the way of a budget? There are the legal costs of making and advertising the order in the first place. These are not so great if the work is done in-house.

If there are objections to the order, then the council is responsible for paying the inspector’s costs for holding a public inquiry or dealing with written representations. A typical one-day public inquiry costs £5,000. A council will need to have this sum as a contingency as you cannot get this money back even if the order is confirmed. If the Order is not confirmed then you have to pay the objector’s costs for opposing it. Perhaps you will need a further £5-7,000 as a contingency to cover this. Assuming the CPO is confirmed there may be SDLT to pay and Land Registry fees. And finally there is the possibility of the compensation payable being more than the sale proceeds.  

It will be clear, however, that a contingency of, say, £25,000 will be more than enough to cover these costs. It should also be remembered that in some cases the council can make a profit out of the CPO process.  If the owner of the property cannot be identified, there is no one to pay compensation too. After six years, the right to claim compensation is lost. Certainly at Great Yarmouth we have had at least cases where an owner has never come forward.

Seeing the CPO process work effectively, particularly by bringing empty and rundown houses back into use, is very satisfying. And when neighbours thank the council for the action that has been taken, it really makes it all worthwhile.

Chris Skinner is head of central services at Great Yarmouth Borough Council