Compulsory Purchase, Compensation and High Speed 2-

Jonathan Stott MRICSMarch 2016

© 2016 Hamer Associates. Registered in England and Wales. Company No. 03948095104-106 Colmore Row, Birmingham, B3 3AGTel: 0121 212 0002

HAMER ASSOCIATES – OVERVIEW

Compulsory Purchase & Compensatio

n

RICS Registered

ValuersEasements & Wayleaves

Accredited Project

Managers

Accredited Expert

Witnesses

Birmingham - 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

MY PROJECTS

WHY IS CPO REQUIRED?

To ensure that development which is in the public interest is not frustrated by private landowners

To set a timeframe for obtaining possession and for payment of compensation

Used 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 CPO

Channel Tunnel Rail Link (HS1) – Hybrid Bill Off-shore windfarms – Development Consent Orders London Olympics – TCPA CPO Crossrail – Hybrid Bill Oxford – Bicester railway – Transport and Works Act Order Birmingham Bullring – TCPA CPO Woodberry Down – Housing Act CPO Hinkley Point nuclear power plant – DCO

CPO – THE PROCESS1. Identify requirement for CP powers to be used (often following approach from developer)2. Identify most appropriate enabling Act (i.e. TCPA, Housing Act etc)3. Seek Cabinet resolution to apply for CP powers4. Develop case for requiring CP powers and prepare application documents including

Statement of Reasons, Map and Schedule5. ‘Make’ the CPO (i.e. submit application to SoS)6. Objection period of 4 weeks; often triggers public inquiry7. Prepare Statement of Case and expert evidence (from Surveyors, Planners etc)8. Public inquiry9. Inspector writes report and makes recommendation to SoS10. SoS announces decision. If positive notices are served on all interested parties and CP

powers may be implemented within three years.

CPO – THE KEY TESTS

Set out in recently updated Government guidance (October 2015) Guidance on Compulsory Purchase process and The Crichel Down Rules Replaced 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 OLYMPICS When 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 2005 Included 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 easy Powers 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 LAND

Usually two options: Notice to Treat and Notice of Entry; or General Vesting Declaration

Some 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 enacted

GVD 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 - OVERVIEW The 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 - OVERVIEW The ‘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 - BIRMINGHAM Precision grinding business

Specialist machinery Located in close proximity to Spaghetti Junction 10 year lease with 7 years remaining

Subject 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 them We assisted the business throughout its relocation and ensured that it obtained multiple quotes for all

costs incurred and kept records of Directors time Negotiated compensation under rules 2 (capitalisation of profit rent) and 6 (disturbance) Whole process took circa 3 years to complete.

HIGH SPEED 2 - OVERVIEW

New railway connecting London with Birmingham and eventually with Leeds and Manchester

Being 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 powers Anticipated 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 SCHEMES HS2 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 Sell Express Purchase Cash payment Homeowner payment (up to 300m)

Examples of HS2 cases: DHL Dunton Hall Grimstock 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 MORE

www.rics.org www.compulsorypurchaseassociation.org Contact me!

Routes to working in CPO CPA website will soon have a jobs section Speak to me about short-term opportunities TfL is recruiting at the moment HS2 is recruiting at the moment There is a shortage of CP surveyors and a long-term requirement…..great

opportunities!

QUESTIONS?

Jstott@hamerassociates.com 0121 200 2001 @MisterCPO @HamerAssocs www.hamer-associates.co.uk www.hamer-associates.co.uk/blog

© 2016 Hamer Associates. Registered in England and Wales. Company No. 03948095104-106 Colmore Row, Birmingham, B3 3AGTel: 0121 2120002