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What is a Compulsory Purchase Order?

Emma Lunn

Written by

9th Aug 2021 (Last updated on 21st Sep 2021) 6 minute read

If there is a Compulsory Purchase Order (CPO) on your home, you could be forced to sell up – whether you want to or not.

A Compulsory Purchase Order allows certain bodies to obtain land or property without the consent of the owner. Orders are usually used to allow large-scale infrastructure projects to go ahead, such as the building of motorways, rail links or airports.

If your home is subject to a Compulsory Purchase Order, it’s important to know what your rights are. You might not be able to stop the acquisition of your property going ahead, but knowing your legal position will enable you to negotiate better terms.

Your property won’t be bought from you immediately – Compulsory Purchase Orders are one step in a long process with many never actually being implemented

This article will cover the following:
  1. How Does a Compulsory Purchase Order Work?
  2. What Does ‘Compelling Case in the Public Interest’ Mean?
  3. Who Can Make a Compulsory Purchase Order?
  4. How Much Do They Have To Pay Me For My Home?
  5. What is the Compulsory Purchase Order Process?
  6. What Happens When a Compulsory Purchase Order is Confirmed?
  7. Who Can Help With a Compulsory Purchase Order?
  8. Taking a Case to the High Court
  9. Learn More About Conveyancing

How Does a Compulsory Purchase Order Work?

Compulsory Purchase Orders allow certain bodies to force homeowners to sell up if their property obstructs a regeneration project. In effect, a CPO gives an organisation a statutory right to buy your property or take a right over it. In order to exercise these rights, the body must meet set criteria laid down by the law.

Compulsory Purchase Orders are typically imposed by councils, highways authorities, English Heritage and other agencies such as utility companies. To be allowed to issue CPOs to homeowners, these organisations must prove a ‘compelling case in the public interest’ and that the relevant project is for the ‘public good’ and not for private gain.

What Does ‘Compelling Case in the Public Interest’ Mean?

To put forward a ‘compelling case in the public interest’ an acquiring authority must demonstrate that the proposed purpose will contribute to improvement of the economic, social or environmental wellbeing of the area.

It must also prove that the purpose for acquiring the land and property could not be achieved by other means. During the process the acquiring authority must consider alternative plans put forward by land and homeowners.

The organisation planning the Compulsory Purchase Order must also prove the financial viability of the proposed scheme.

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Who Can Make a Compulsory Purchase Order?

Compulsory Purchase Orders can be issued by various acquiring authorities. These include:

  • local government
  • regional development authorities
  • utility companies
  • government agencies
  • transport companies

A Compulsory Purchase Order might be used to:

  • progress major building projects such as airport expansions or flood defence works
  • improve transport infrastructure such as rail or road links
  • regenerate areas of bad or rundown housing
  • take over a listed building

How Much Do They Have To Pay Me For My Home?

If a Compulsory Purchase Order is made, the organisation who made the order will be required to pay you the market value of your home plus an amount for compensation. They should also pay the expenses you incur in the process.

However, there may be some disagreement about the ‘market value’ of your home during the compulsory purchase order valuation. You should be paid the value of your home as it would be in the absence of the regeneration scheme prompting the CPO.

However, if property prices have fallen since you bought your home, you may get less than you paid for it.

In addition, you are usually entitled to 7.5% or 10% of your property’s value as compensation.

You’ll also be entitled to payment for your expenses during the Compulsory Purchase Order process. These might include:

  • The cost of appointing a specialist surveyor to advise you during the CPO process.
  • The solicitor fees for selling a house to cover the conveyancing if/when your home is sold to the purchasing organisation.
  • ‘Disturbance’ compensation which covers certain costs involved in buying another home or covers losses relating to your existing home such as fittings, carpets and disconnections.

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What is the Compulsory Purchase Order Process?

Getting to the stage when you are forced to sell your home can take years as there are certain steps that must be followed. Briefly, these are:

  1. The acquiring authority decides that land is required for a particular purpose or that it is prepared to use CPO powers to achieve this. The authority will gather information and may enter into early negotiations with land and homeowners. Some homes may be sold by negotiation at this stage.
  2. The acquiring authority will make a ‘formal resolution’ to use compulsory purchase powers.
  3. The acquiring authority will serve 'requisition for information' notices on everyone it believes owns or occupies the land it wants to acquire. There will be a deadline to respond to this notice and failing to provide information, or making false statements, is a criminal offence. Homeowners should not ignore this letter.
  4. The acquiring authority might apply for a ‘right to enter land’ survey and value it before it decides to make a CPO.
  5. The acquiring authority will make the CPO. The order will contain details of why the CPO is being made. It will include a ‘statement of reasons’ which will demonstrate that the proposed scheme is in the public interest and will deliver social, environment and economic wellbeing.
  6. Notices will be served on all land and homeowners, leaseholders, tenants and other occupiers of affected land. The CPO will also be publicised in local press. The notice will state that a CPO is about to be sent to the Secretary of State for confirmation.
  7. There will be 21 to 28 days to make objections to the CPO. If at least one objection is made there will be a public inquiry. If there are no objections the government will confirm, modify or reject the CPO.

What Happens When a Compulsory Purchase Order is Confirmed?

Once a Compulsory Purchase Order has been confirmed, there are several ways the acquiring authority can exercise the CPO. These include:

  • By negotiated agreement with land and property owners.
  • A Notice to Treat followed by a Notice of Entry. The Notice to Treat is a formal request from a local authority to agree a price for a property. There will be a date set for when compensation has to be settled and paid and the land or property transferred. This will happen in a minimum of 14 days. After serving a Notice to Treat, the authority can serve a Notice of Entry which must specify a date at least 14 days away when the authority can enter the land or property and take possession of it.
  • A general vesting declaration (GVD). This is a formal procedure that gives a local authority the right to take over the ownership of property. This normally takes at least three months. Compensation will be agreed later.

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Who Can Help With a Compulsory Purchase Order?

Compulsory Purchase Orders are a very specialised area. If you find out your home could become the subject of a CPO you should seek professional advice from a chartered surveyor with the relevant experience. The acquiring authority should cover the cost of this. Your surveyor can help you make a claim for compensation.

Taking a Case to the High Court

If you object to a Compulsory Purchase Order and your objections are not upheld at a public inquiry you may challenge the CPO in the High Court under the Acquisition of Land Act 1981.

You’ll need to do this within six weeks of publication of the CPO and it can be very expensive.

The High Court will consider claims where:

  • The powers granted in the CPO go beyond the powers permitted by the act of parliament under which they are being sought.
  • The CPO procedure has not been followed correctly.
  • The government minister has not acted properly in reaching a decision.

Learn More About Conveyancing

This has been part of our conveyancing guide. In the next guide, we take a look at the risk of mining areas. To learn more, read buying a house in a mining area.

Emma Lunn

Written by Emma Lunn

Freelance Personal Finance Journalist,

Emma Lunn is an award-winning journalist who specialises in personal finance, consumer issues and property.

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