CPO land referencing

Compulsory purchase order land referencing just got a whole load easier, writes Chris Skinner.

Those lawyers making compulsory purchase orders will know the need to identify “qualifying persons” in relation to the order land. They need to be listed in the schedule to the order and served with notice of the making of the order. There are two categories of “qualifying persons”. The first is easy to identify. It includes owners, lessees, tenants and occupiers. The second can be more problematic. It includes those who could theoretically be entitled to a notice to treat. This might include mortgagees. It also includes a person the acquiring authority thinks is likely to be entitled to make a claim for compensation under section 10 of the Compulsory Purchase Act 1965. It is this latter group of people with which this article is concerned.

When land is compulsorily acquired for a statutory function of the local authority, such as a new road, covenants and easements (“rights”) affecting the order land that are incompatible with the project are extinguished during the period that the land is used for the project. If someone owns land that is not being acquired under the CPO, but who has rights over the order land that will be extinguished, he can make a claim for compensation under s10 of the Compulsory Purchase Act 1965. This type of compensation is known as “injurious affection”. It is equivalent to the amount by which the land is devalued by reason of no longer enjoying the rights.

If land is being CPO’d for development by a private sector partner, rights are not automatically extinguished. In the past CPOs made under section 226 of the Town and Country Planning Act 1990 allowed the ultimate developer to take advantage of section 237 of the Act. If land acquired under section 226 was subsequently developed in accordance with a planning permission incompatible with rights affecting the land, they were permanently extinguished. Section 237(4) provided that the compensation should be payable under…section 10 of the Compulsory Purchase Act 1965 on the basis of it amounting to injurious affection. Because the claim for compensation under section 237 of the 1990 Act was specifically stated to link to an injurious affection claim under section 10 of the Compulsory Purchase Act 1965, it seemed sensible in the past to treat people with rights over the land that were to be extinguished by the development as qualifying persons. Consequently much time would be spent examining title to the order land, and title to adjoining land, just to see what rights might exist that needed to be included in the CPO schedules. It does not take much imagination to realise what a big task this could be for a multi plot CPO project.

However sections 203 to 206 of the Housing and Planning Act 2016 have removed this problem entirely. Section 237 of the 1990 Act has been repealed and replaced with new provisions. Whilst the basic principle of the extinguishment of rights upon carrying out development is continued by section 203, the compensation provisions have been altered significantly. Section 204 of the 2016 Act provides as follows:

(1) A person is liable to pay compensation for any interference with a relevant right or interest or breach of a restriction that is authorised by section 203.

(2) The compensation is to be calculated on the same basis as compensation payable under sections 7 and 10 of the Compulsory Purchase Act 1965.

So now the position is that compensation is payable under section 204(1) of the Act, and not section 10 of the Compulsory Purchase Act 1965. It is merely the case that the compensation payable under section 204(1) is, by virtue of section 204(2), calculated in the same way as compensation under section 10 of the Compulsory Purchase Act 1965. This subtle change in wording introduced by the 2016 Act means that people with rights that will eventually be extinguished by the carrying out of the development will no longer be “qualifying persons”. They no longer have a claim for compensation under section 10 of the 1965 Act, but a claim for compensation under section 204(1) of the 2016 Act.

Of course, you will still want to know the extent of any rights that may be extinguished so that you know what the total compensation package for the project is likely to be. And you will want to make reference to these rights in your report seeking authority to make the CPO, so that members are aware of this fact when making a decision to approve the CPO. It does however mean that you don’t have to fill up your CPO schedule with a myriad of adjoining landowners who have rights over the property.

Chris Skinner is a Solicitor with nplaw (the shared legal service hosted by Norfolk County Council) and head of its CPO Consultancy Service which assists councils in England and Wales on CPO projects, large and small. He can be contacted on 01603 223736 or by email.