I visited a semi-detached house in Manchester recently that had found its way into the auction rooms after having been Compulsory Purchased by the Council. It was in a really poor state of repair, having stood vacant for a long time and with no sign of the owners. The Council had therefore used its powers to Compulsory Purchase the property under the Housing Act 1985 to put it back into use and had put it into the auction in order that new owners could buy it and restore it to a habitable condition.

Indeed as part of the deal, the property was sold subject to a schedule of works being carried out so the Council could ensure that all the necessary works would be done and this eyesore (which was sitting in the middle of nice, well maintained properties) would no longer be a blot in an otherwise pleasant residential road.

There are major advantages to the community where compulsory purchase powers are used.  The Council removes ownership of substandard properties from owners unwilling or unable to improve them to sell on to purchasers willing and able to do so.  The transformation of badly managed, poor condition housing for residential use has a marked impact on local environment and the quality of life for neighbouring residents so although seemingly unwelcome, CPOs serve a very valid purpose in maintaining neighbourhoods.

In the case of our Manchester property, it had been purchased by two enthusiastic property renovators who were going to be using their own money to do the works and were then planning to put the property back on the market to be sold. They wanted to restore it to a high standard - in keeping with the area and planned to do so in just 6 weeks!

What is Compulsory Purchase?

A Compulsory Purchase Order (CPO) is a legal action in the United Kingdom and the Republic of Ireland that allows certain bodies which need to obtain land or property to do so without the consent of the owner. It is a forced sale of a property to the Council, authorised by the Secretary of State. We tend to hear about CPOs when land or buildings are obstructing the development of an area for the public good i.e. when building motorways where a land owner does not want to sell or if a town council wishes to develop a town centre. Recent major compulsory purchase schemes include the London 2012 Olympics, Manchester Airport 2nd Runway, Liverpool Paradise Street Redevelopment and Leeds Supertram.

In the Republic of Ireland, CPOs are quite common due to the massive road upgrade programme under the National Development Plan. Most Orders are made under powers given to Local Authorities in existing legislation (see below). Whilst the powers are strong the Authority must demonstrate that the taking of the land is necessary and there is a "compelling case in the public interest".

Owners or occupiers can challenge this, and their objection will be heard by an independent Inspector. If the CPO is still enforceable, the owners or occupiers will receive compensation - usually equating to the value of the property, costs of acquiring and moving to a new property, and sometimes additional payments. Costs of professional advice regarding compensation are also usually so that people affected by a compulsory purchase order can seek advice from a solicitor.

Under what legislation can a Council issue a CPO?

Local Authorities have power under various Acts to compulsory purchase a property. The powers range from redevelopment under the Town and Country Planning Act, to property clearance under the Housing Act. The Council must have a specific power under statute before a Compulsory Purchase Order can be made. Compulsory Purchase Orders can be used for a number of purposes, including:

• Clearance of unfit housing - Housing Act 1985 
• Bringing empty properties back into use - Housing Act 1985
• Development or regeneration - Town and Country Planning Act 1990
• Local road schemes - Highways Act 1980

What if your property is at risk of being Compulsory Purchased?

The first thing to say is that most local authorities will prefer to encourage and persuade owners of substandard properties to improve and return them to permanent residential use rather than to make a CPO.  Councils will have strategies to give financial assistance and other incentives and to exercise their legislative powers to owners of empty properties before going down the route of Compulsory Purchase.

Government policy on CPOs is that they should be used as a last resort after the owner has been given every opportunity to carry out improvements voluntarily or in compliance with statutory notices.

However, there will always be situations where owners of tenanted properties fail to comply with statutory notices, and owners of empty properties resist all encouragement to bring them back into residential use.  In these circumstances the Council's only remaining option is to consider the use of compulsory purchase.

If your property is earmarked for Compulsory Purchase, the decision and ability of the Council to do so, won't be quick! Compulsory Purchase Orders must follow a formal statutory process.

The basic steps are as follows:

• Instructions are received to make a Compulsory Purchase Order.
• The council must obtain information regarding legal interests in the land including serving requisitions for information, title checks and notification of affected persons that their interests in the land can be sold to the authority in advance of compulsory purchase or an Order will be served in due course.  
• The Council will prepare a draft report regarding compulsory purchase which will include a Statement of Reasons for making, and the draft CPO itself to present to Cabinet. 
• Cabinet approves Compulsory Purchase Order. 
• The Order is formally made by affixing the Council's Seal, advertisements are placed in the press, formal Notices including a copy of the Compulsory Purchase Order and the statutory forms served upon all persons of legal interests in the land. This allows a 28 day objection period.
• If objections are received the Secretary of State will direct a Compulsory Purchase Order Inquiry to be held. This is held within a timescale set by the Secretary of State and will normally involve a Pre-Inquiry Meeting and a formal Open Public Inquiry into whether the Compulsory Purchase Order should be confirmed or not. Once the Inquiry has been completed, the Inspector will put a report before the Secretary of State who will decide whether to confirm the Order as drawn, modify it, or reject the Compulsory Purchase Order.
• If there are no objections the Secretary of State, or in certain circumstances the local authority, confirm the Compulsory Purchase Order. Once a Compulsory Purchase Order has been confirmed the Council can serve a General Vesting Declaration, or a Notice to Treat / Entry which will transfer the legal interest from the then owner to the Borough council. After this the development / clearance can begin.

There are various law firms who specialise in representing the interests of owners / occupiers of properties affected by CPOs and who aim to object on your behalf and negotiate compensation for you.

The matter of CPOs is defiantly one where there are two sides to the story. Yes, they conjure up images of little old ladies being turfed out of the house they have lived in all their lives to make way for a new road, but equally there are neighbourhoods and communities who are suffering due to empty, unsightly and often dangerous properties existing on their doorsteps. If CPOs can get this much needed housing stock back into circulation then that has to be good news for everyone - not least eager property developers willing and able to snap them up and restore them in double quick time!

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