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Compulsory purchase order compensation claims

This content applies to England

Compensation after a compulsory purchase order is made.

Right to compensation

The right to compensation and how the amount of compensation is calculated are derived from a combination of statute, case law and established practice. This is sometimes referred to as the 'Compensation Code'. The principal statutes are the Land Compensation Acts of 1961 and 1973 and the Compulsory Purchase Act 1965. There is a right to compensation for situations both where land is taken, or only nearby land is taken.

The general principle is that, in financial terms, owners and occupiers of land should be no worse off (and no better off) after the compulsory purchase order (CPO) than before.

For more information, see the Government's guidance Compensation to Residential Owners and Occupiers.

Mitigating the loss

The owner or occupier is expected to 'mitigate' the loss, which means taking reasonable steps to reduce the loss.[1] For example, when arranging removals, it is advisable to get three quotes to check that the cost is reasonable.

Preparing a claim

A claim for compensation must be detailed and properly evidenced.

It is usually advisable to employ a surveyor to help prepare the claim. The fees should be recoverable as a part of the claim. Contact the Royal Institute of Chartered Surveyors (RICS) compulsory purchase helpline for details.

A claim for compensation may be submitted as soon as the claimant has been notified that her/his property may be affected by compulsory purchase. it is not necessary for the acquiring authority to have taken possession.

The government has produced a model claim form, along with guidance notes, which sets out all of the information which the claimant must provide. It is always advisable to keep a good record of any losses, including quotes, estimates and receipts which can be included in the claim. An inadequately completed claim may lead to costs being awarded against the claimant.

Subject to receiving a valid claim for an advance payment, the acquiring authority must make an advance payment of 90 per cent of the:[2]

  • amount of compensation that has been agreed, or
  • acquiring authority's estimate of the compensation due

If the authority does not have enough information to make the payment it must ask the claimant to provide additional information within 28 days of receiving her/his request.

Some or all of any compensation paid in advance will be repayable if the final amount of compensation agreed is less than the amount paid, or if the acquiring authority does not proceed to taking possession.

Disputing a claim

Disputed claims for compensation, including disputes about the award of costs, may be determined by the Upper Tribunal.[3]

Limitation on claiming

It has been held that an application to the Upper Tribunal (Lands Chamber) for the assessment of compensation resulting from a CPO is an 'action for sum recoverable by statute', and is subject to the time limit of six years under section 9 Limitation Act 1980.[4] The time limit may start after land was compulsorily purchased, ie where the associated works did not cause something to actually affect the claimant's land straight away, such as a delayed interference with quiet enjoyment. [5]

Compensation where all or part of the land is taken

A claim for compensation can include the following:

  • value of the land acquired
  • severance and injurious affection which means the depreciation in the value of retained land where only part of the land is acquired
  • home loss payment – homeowners and tenants can claim an additional sum in compensation for losing their home. Joint owners and joint tenants will have the money split equally between them. The payment is only made to people who have lived in the home for the last 12 months. See the page Home loss payments for details
  • disturbance which is usually only available to occupiers of the land, and covers removal costs and other costs of moving. See the page Disturbance payments for details
  • fees, including reasonable surveyors fees for preparing and negotiating a compensation settlement, together with solicitors fees for any conveyancing

Disturbance can include, for example:

  • removal expenses
  • legal fees, stamp duty, survey fees and mortgage fees for buying a new home
  • special adaptations for the new home
  • altering soft furnishings and moveable fittings and fixtures to fit the new home
  • disconnection and reconnection charges for services
  • forwarding of post

If a tenant has to leave rented accommodation as a result of a CPO the acquiring authority may agree to pay the reasonable expenses (other than the purchase price of the property) of buying a comparable home, provided it is bought within a year.

Compensation where nearby land is taken

A claim for compensation can include the following:

  • reduction in value caused by the execution of public works – this can be claimed under section 10 of the Compulsory Purchase Act 1965 where a property right is temporarily lost as a result of the works, for example a right of way
  • reduction in value caused by the use of public works – this provides compensation for loss of property value due to noise,[6] vibration, smell, fumes, smoke, artificial light, solid or liquid waste. This can only be claimed by owner occupiers under Part 1 of the Land Compensation Act 1973, but occupiers of moveable homes (mobile homes and houseboats) may qualify for payment in respect of noise from a public highway
  • fees, including reasonable surveyors fees for preparing and negotiating a compensation settlement

[1] Glasspool v Southwark LBC [2017] UKUT 373 (LC).

[2] ss.52-52B Land Compensation Act 1973 as amended.

[3] s.1 Land Compensation Act 1961 substituted by Transfer of Tribunal Functions (Lands Tribunal and Miscellaneous Amendments) Order 2009 SI 2009/1307

[4] Hillingdon LBC v ARC Ltd [2000] EWCA Civ 191; Saunders v Caerphilly CBC [2015] EWHC 1632 (ch).

[5] Bourne Leisure (Hopton) Ltd v Great Yarmouth Port Authority [2016] UKUT 44 (LC).

[6] See for example, Goodman and others v Transport for London [2016] UKUT 126 (LC).

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