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Compulsory Purchase, Compensation and High Speed 2-Jonathan Stott MRICS
2016 Hamer Associates. Registered in England and Wales. Company No. 03948095104-106 Colmore Row, Birmingham, B3 3AGTel: 0121 212 0002
HAMER ASSOCIATES OVERVIEW
Easements & WayleavesAccredited Project ManagersAccredited Expert WitnessesBirmingham - Bristol - Leeds - London
Jonathan Stott MRICSManaging Director and Head of Compulsory PurchaseMember of Compulsory Purchase Association National CommitteeMember of National Infrastructure Planning AssociationAccredited Expert Witness
BA (Hons) Planning and International Development (University of Liverpool)PG Dip Estate Management (College of Estate Management, Reading) ABOUT ME
WHY IS CPO REQUIRED?To ensure that development which is in the public interest is not frustrated by private landownersTo set a timeframe for obtaining possession and for payment of compensationUsed across the world, often referred to as eminent domain
Primarily available to Local Authorities but other public sector organisations may also be granted powers. More recently through TWAOs (1992) and DCOs (2008) powers may be obtained by private companies. Could powers be available for residential developers in the future?
PROJECTS THAT WOULD NOT HAPPEN WITHOUT CPOChannel Tunnel Rail Link (HS1) Hybrid BillOff-shore windfarms Development Consent OrdersLondon Olympics TCPA CPOCrossrail Hybrid BillOxford Bicester railway Transport and Works Act OrderBirmingham Bullring TCPA CPOWoodberry Down Housing Act CPOHinkley Point nuclear power plant DCO
CPO THE PROCESSIdentify requirement for CP powers to be used (often following approach from developer)Identify most appropriate enabling Act (i.e. TCPA, Housing Act etc)Seek Cabinet resolution to apply for CP powersDevelop case for requiring CP powers and prepare application documents including Statement of Reasons, Map and ScheduleMake the CPO (i.e. submit application to SoS)Objection period of 4 weeks; often triggers public inquiryPrepare Statement of Case and expert evidence (from Surveyors, Planners etc)Public inquiryInspector writes report and makes recommendation to SoSSoS announces decision. If positive notices are served on all interested parties and CP powers may be implemented within three years.
CPO THE KEY TESTSSet out in recently updated Government guidance (October 2015)Guidance on Compulsory Purchase process and The Crichel Down RulesReplaced Circular 06/04 (the Bible!)Key tests are:Is there a compelling case in the public interest? (including consideration of Articles 1 and 8 of the First Protocol of the European Convention on Human Rights)Does the acquiring authority have a clear idea of how it intends to use the land and can it demonstrate that all necessary resources are likely to be available to achieve that end within a reasonable timeframe?Are there any planning impediments to implementation? (does not necessarily mean that planning needs to have been obtained but the underlying scheme must be considered to have a realistic prospect of being consented)
CPO CASE STUDYLONDON OLYMPICSWhen Olympics were awarded to London the site was effectively a wasteland. Part occupied by industrial uses of varying pedigree.LDA promoted the Lower Lea Valley, Olympic and Legacy CPO in 2005Included circa 1,000 interested parties of which over 250 were business that needed to be relocated.Significant effect on land values throughout east London. Industrial property values increased significantly between 2005 and 2009.Many businesses required specific licences to operate; finding sites was not easyPowers were granted and implemented relatively quickly (funny that!)Site cleared by 2008 to enable works to commence.Many compensation settlements continued to be negotiated for years after the Games. Majority finally settled in 2014 (6 year rule)
TAKING ENTRY TO LANDUsually two options: Notice to Treat and Notice of Entry; orGeneral Vesting DeclarationSome Orders include powers to take land temporarily whereby a temporary notice may be served.NTT/NoE takes minimum of 14 days. Due to increase to 3 months when Housing and Planning Bill is enactedGVD takes 3 months. Provides clean title and interests automatically vest in the AA on the vesting date (usually also the date of possession)Temporary notices usually provide minimum of 14 days notice (HS2 = 28 days)
COMPENSATION CODE - OVERVIEWThe over-riding principle is of financial equivalence. Referenced in various cases, most famously by Scott LJ in Horn v Sunderland (1941):The principle of equivalence .is at the root of statutory compensation, which lays it down that the owner shall be paid neither less nor more than his loss.Important to note that equivalence only relates to finances. Very different from like for like properties.
COMPENSATION CODE - OVERVIEWThe Compensation Code is not codified at all. It is a complex mix of case law and statute. In need of reform.The 6 central rules of compensation can be found within section 5 of the Land Compensation Act 1961. Most important are Rules 2 (market value) and 6 (disturbance).Other sections of various Acts govern issues including:Compensation where no land is taken (s.10 1965 Act and Part 1 1973 Act)Compensation for injurious affection and severance (s.7 1965 Act)Material detriment (s.8 1965 Act)Loss payments Blight
COMPENSATION CASE STUDY:RELOCATION OF SPECIALIST MANUFACTURING BUSINESS - BIRMINGHAMPrecision grinding business Specialist machineryLocated in close proximity to Spaghetti Junction10 year lease with 7 years remainingSubject to a CPO by Birmingham CC for purpose of redeveloping an industrial estate to deliver an advanced manufacturing hub.We were instructed to object to the CPO. Prior to public inquiry a compromise agreement was reached providing extended notice (12 months)We identified potential replacement properties and negotiated terms for a lease on one of themWe assisted the business throughout its relocation and ensured that it obtained multiple quotes for all costs incurred and kept records of Directors timeNegotiated compensation under rules 2 (capitalisation of profit rent) and 6 (disturbance)Whole process took circa 3 years to complete.
HIGH SPEED 2 - OVERVIEWNew railway connecting London with Birmingham and eventually with Leeds and ManchesterBeing consented through a series of Hybrid Bills Phase 1 has passed through HoC Select Committee and is due to pass through HoL, starting April 2016.Bill includes compulsory purchase powersAnticipated that Bill will receive Royal Assent early 2017. Construction will commence immediately Phase 1 due to open for public service by 2026. Phase 2 by 2030/31.As with all major infrastructure projects HS2 has had a long-term blighting effect on local communities and property markets
HS2 DISCRETIONARY COMPENSATION SCHEMESHS2 Ltd (i.e. DfT) has acknowledged blighting effect and introduced a number of discretionary schemes, available for owner-occupiers of residential properties and small businesses (RV>34,800)Exceptional Hardship / Need to SellExpress PurchaseCash paymentHomeowner payment (up to 300m)
Examples of HS2 cases:DHLDunton HallGrimstock Hotel
WHEN DO SURVEYORS GET INVOLVED - WORKING FOR PROMOTERS
WHEN DO SURVEYORS GET INVOLVED - WORKING FOR CLAIMANTS
WHY I WOULD RECOMMEND GETTING INVOLVED
HOW TO FIND OUT MOREwww.rics.orgwww.compulsorypurchaseassociation.orgContact me!
Routes to working in CPOCPA website will soon have a jobs sectionSpeak to me about short-term opportunitiesTfL is recruiting at the momentHS2 is recruiting at the momentThere is a shortage of CP surveyors and a long-term requirement..great opportunities!
QUESTIONS?Jstott@hamerassociates.com0121 200 2001@MisterCPO@HamerAssocswww.hamer-associates.co.ukwww.hamer-associates.co.uk/blog
2016 Hamer Associates. Registered in England and Wales. Company No. 03948095104-106 Colmore Row, Birmingham, B3 3AGTel: 0121 2120002