The Housing and Planning Bill – housing heaven or headache? Compulsory purchase

The Bill lays out the framework through which the government hopes to deliver new homes under a faster and more streamlined process. As with many new pieces of legislation, however, it will be the detailed draft regulations and guidance still to be issued that will provide a clearer picture of how this will impact on the delivery of homes and how the various initiatives will operate together.

However, there are practical implications that can be considered now. In the latest in a series of articles that focus on issues related to the delivery of housing via the planning system, we look at how the government intends to use the Bill to deliver improvements to the compulsory purchase order (CPO) regime.

Background

Hopes for a comprehensive overhaul of the complex and antiquated compulsory purchase and compensation code evaporated in 2004, when the then government decided not to act on recommendations contained in the Law Commission's 'Towards a Compulsory Purchase Code' report. Instead, successive governments have engaged in piecemeal reform within successive planning acts, of which the new Bill is the latest.

The proposed amendments are generally sensible tweaks to existing legislation intended to make the CPO implementation process easier to manage, together with a number of provisions providing greater protection to affected landowners.

The difficulty in reforming compulsory purchase and compensation law is apparent from the debate that the Bill's modest proposals have already prompted amongst specialists. Some of the reforms will generally be welcomed and we can be confident that they will be enacted, although much of the detail will be in regulations and guidance. Others, such as reform of the severance provisions and overriding of easements, as outlined below, are more controversial and may be subject to amendment.

Rights to enter upon and survey land

At present, only a limited number of public bodies are entitled to enter onto land in order to survey it before making a CPO – for example, to check the location of utilities or take samples. Clauses 111 to 117 of the Bill would extend this right to any body which could seek compulsory purchase powers.

If the landowner seeks to prevent access, the authority would be able to seek a warrant from a justice of a peace allowing for forced entry. Obstruction, and the sharing of confidential information by a person who undertakes a survey, would also be an offence.

At least 14 days' notice of entry would have to be given, and the notice must say what the authority proposes to do on the land. Compensation would be payable for any damage suffered by a landowner as a result of the exercise of the power, with any disputes referable to the Upper Tribunal.

CPO process

A welcome innovation is the requirement on the Secretary of State to publish timetables of the steps to be taken by confirming authorities in confirming a CPO, except the Welsh Ministers who would publish their own.

A confirming authority may delegate its confirmation powers to an Inspector either in respect of a specific CPO, or a class of CPOs. Should powers be delegated it would speed up the confirmation process by 2-3 months in many cases.

Implementation of CPOs

The Bill would introduce some minor amendments to make it clear that a notice to treat (NTT) or a general vesting declaration (GVD) cannot be served if three years have expired since the CPO came into force.

At present, once an NTT has been served the acquiring authority can serve another notice, which is usually called a notice of entry (NOE). The NOE states that possession can be taken of the property, but not before any earlier than a specified date - although there is no obligation to take possession on that date. This date need only be 14 days after the date of the notice.

Many occupiers consider this time period wholly insufficient to allow them to make the practical arrangements needed to vacate the property - something that is recognised by many authorities. For example, the 2008 Crossrail Act and the High Speed 2 Bill both extend the minimum period to three months. The Bill adopts a common minimum notice period of three months whether the NTT/NOE or GVD process is adopted. It would also introduce a helpful amendment allowing a fresh NOE to be served if the acquiring authority becomes aware of an owner, lessee or occupier who has not been served.

The Bill would also remove the preliminary notice of intention to make a GVD. Instead, a prescribed notice would be included in the confirmation notice.

Counter-notice by occupier

A common complaint by occupiers of land subject to an NOE is that the notice does not have to specify a date on which possession will be taken. This leaves some occupiers in limbo since compensation is not payable unless entry is taken.

The Bill seeks to resolve this issue by allowing an occupier to serve a counter-notice requiring possession to be taken on a specified date. At least 28 days' notice would have to be given, which could be extended by agreement.

Compensation

Currently, the Secretary of State may prescribe a form for claiming compensation. One complaint by acquiring authorities is that claim forms have scant details of the claim. The Bill would amend the process for advance payments considerably.

At present, the authority must only pay 90% of its own estimate of compensation, and may put off making any payment by requesting more information. Some authorities have been accused of deliberately manipulating the system to avoid making payment, encouraged by the fact that the statutory interest rate is currently 0%. The claimant's only recourse is to start legal proceedings in the Upper Tribunal.

The Bill would put a process in place through which the Secretary of State would prescribe a claim form. The authority would have to decide within 28 days whether it requires more information or not. It would then have two months from the receipt of this information to arrive at its estimate and make a payment. The Treasury would be able to set a specific interest rate on compensation unpaid by an authority in breach of these time limits.

Disputes

A sensible amendment to the Acquisition of Land Act would be made by the Bill, allowing a court to quash the Secretary of State's decision to confirm a CPO either in whole or in so far as it relates to the specific property of the applicant. Currently, a court can only quash the whole CPO which requires the authority to start the process afresh. This is widely regarded as unsatisfactory, particularly where a decision is quashed due to a technical error by the Secretary of State or the Inspector in their report.

Where a CPO is challenged in the High Court, the three-year period for implementing it would be extended for the length of the judicial review proceedings, up to a maximum of one year.

The Bill would also harmonise the complex provisions relating to a notice of severance served by a landowner who wants the whole, rather than a part of, the land required. Currently, where a GVD is made, the authority cannot take possession of any part of the land if a notice of severance is served. This is not the case where an NTT is served. The Bill would allow possession to be taken while the question of severance is resolved.

Easements and other rights

The Bill proposes repealing the useful power in the 1990 Town and Country Planning Act to override easements, restrictive covenants and other rights and replacing it by a more substantial provision.

The relevant land would no longer have to be held by a local authority for planning purposes. Clause 137 would allow building and maintenance works to be carried out even if it would interfere with a right or breach a restriction provided that:

• there is planning consent for the work;
• the land on which the work is carried out has been vested or acquired by a specified authority - which could be a local authority, the Crown, a statutory undertaker or another body established by an Act of Parliament; and
• the land could be acquired compulsorily for the works.

However, rights belonging to statutory undertakers cannot be interfered with under this provision. Compensation is payable for any interference with a right or breach of a restriction.

Richard Ford and Raj Gupta are housing and planning law experts at Pinsent Masons, the law firm behind Out-Law.com

For further information, please contact:

London: Richard Ford, Raj Gupta,

Birmingham: Heidi Slater

Leeds: Jonathan Riley

Manchester: Mike Pocock