The letter lands on your doormat, warning that your home is to be compulsory purchased. Where do you stand if you do want to go? And what are your rights on compensation?
Compulsory purchase orders (CPOs) have been in the news a lot recently. Liverpool families living in the shadow of Anfield stadium face being turfed out of their homes to make way for an expansion.
And further south, hundreds of households in the path of the planned High Speed Rail (HS2) route could be forced to sell up.
Not all compulsory purchases are this high profile, but it must be extremely upsetting for any household to be forced to sell up. Unless you’re keen to move already, a CPO could feel like an eviction notice from a house you’re deeply attached to.
So what are your rights if one lands on your doorstep?
Who can issue a CPO?
The vast majority of purchase orders will be made by local authorities. So in the Anfield case, for example, the football club isn’t able to issue the CPOs. Instead, it’s working with Liverpool City Council, which has said it could be issuing the orders very soon.
Residents might be dismayed at losing their homes next to the historic football club, but at least it will be an end to the uncertainty that has dogged them over recent years and made many properties there virtually unsellable.
In order to issue a CPO, the local authority must be able to show that the planned development is in the public interest.
The would-be acquirer should also show that they have attempted to purchase your property with your agreement before issuing the CPO. The good news is that a purchase order is unlikely to arrive out of the blue.
How much money can you get?
The idea of a CPO is that the property owner should be in no worse a position as a result of the purchase and that all costs that can reasonably be associated with it are met. Unfortunately, they aren’t entitled to be better off as a result either, so a CPO is rarely a windfall.
Homeowners should be offered an amount that covers the market value of the property, professional fees, moving costs and a payment for the disturbance.
However, you have a duty to ‘mitigate’ any losses or you risk not receiving full compensation. For example, if you need a removals firm to shift your belongings then you should get quotes from three and choose the cheapest reputable firm.
Residents affected by the HS2 high speed rail link plans have been offered the value of their properties plus an additional 10%, up to a maximum value of £47,000.
They are also being offered the chance to sell their homes now and rent them back until the land is needed, to give them greater flexibility.
Sometimes a project or development will increase the value of property in an area. For example, the redevelopment of the Anfield site is likely to do so in Liverpool.
However, if your home is subject to a compulsory purchase, you’re unlikely to qualify for additional compensation as a result of the project enhancing the value.
Can you appeal?
If a CPO letter lands on your doormat and you’re less than delighted, all is not lost. You can object to the order and should do so within 288 days.
Any objections you raise must relate to the actual planned project, rather than because you don’t feel you’ve been offered enough compensation.
Once all objections are in, there will be a public enquiry into the project and it’s up to Parliament whether or not the CPO goes ahead. This can be a really long process, often taking more than a year and a half.
How soon will you have to leave your home?
After a CPO has been approved, the authority acquiring it has to act within three years, or its right to do so will end.
What if your home is affected but not purchased?
While it may be bad news that your home is to be purchased and knocked down, it could be even worse to discover your property will be devalued by a nearby development.
A power station, a train line, a motorway; close proximity to these kinds of projects can easily knock the value of your home.
You can potentially claim for a loss of value caused by the eventual use of a new development, but also for a reduction in the value caused by the actual construction.
The amount you could claim will depend hugely on the project being undertaken and the impact it will have on your home and its value. There’s a really useful flow chart available in the Government guide Compulsory Purchase and Compensation Booklet 4: Compensation to Residential Owners and Occupiers which can help.
If your home is already on the market when the plans are made public, then that can understandably affect your ability to sell it. If you have to dramatically reduce the price in order to make a sale, you could have a right to compensation, even if the order doesn’t go ahead.
Of course, the information in this article can only be general and doesn’t constitute legal advice. So much depends on the individual circumstances that it’s important to consult an independent legal adviser as soon as you’re made aware of the local authority’s plans.
Finding advice
If you’re affected, get legal advice as soon as possible.
This could be from a local solicitor or chartered surveyor, who can advise you on your rights in your specific case and act on your behalf.
If you’re on a restricted income then you may be able to get some financial help towards this cost. More information on this is available in the leaflet ‘The Community Legal Service’, which you can pick up at your local Citizens Advice Bureau or Legal Services Commission.
There’s also a limited amount of free advice available. The Royal Institution of Chartered Surveyors operates a Compulsory Purchase Helpline, which puts you in touch with local chartered surveyors. They will provide up to 30 minutes of free advice. The helpline number is 0870 333 1600.
Have you ever fought a Compulsory Purchase Order? Do you think it’s right that a homeowner can be forced to sell? Share your thoughts with other readers in the comments below.
More on buying and selling property: