Compulsory Purchase Orders (CPO) Guide for UK Property Investors in 2024

What is a compulsory purchase order?

A compulsory purchase order (CPO) is a legal declaration from an authority, such as a council, to acquire land or property without the consent of the owner. A CPO is usually only enforced if the seized site is used to support building development, regeneration and other infrastructure projects in the public interest. The order would result in a marked improvement in social, economic and environmental wellbeing.

Table of Contents

The government has released guidance on compulsory purchase orders. They acknowledge that although CPOs are put in place for a positive end, the compulsory acquisition of land without the consent of the owners can be upsetting, as well as being accompanied by confusing and daunting laws.

The CPO process – how it works

Typically, a CPO happens in the following 7 stages:

Preliminary enquiries: The acquiring authority considers whether additional land is required to deliver their planned project – including the extent, purpose and negotiations that need to be agreed on.
CPO submission: The acquiring authority prepares its compulsory purchase order by gathering detailed information about land occupation. The CPO is written, publicised and submitted to the confirming authority.
Objection period: Those affected by the CPO are invited to submit their objections to the confirming authority. This is where the recipient should gain professional advice.
Consideration of CPO: The CPO (and all surrounding context) is considered by the confirming authority, through public inquiry or written representations.
Final decision: The confirming authority decides on its next step – whether to confirm, modify or reject the CPO.
Possession and acquisition: The acquiring authority takes ownership of the land.
Compensation window: There is usually a right to compensation if land has been compulsorily acquired, on the grounds of equivalence – the land acquired should not make the defendant either richer or poorer financially.

What happens if you get a CPO against you?

When you are first made aware of a CPO, the most important thing to do is keep a comprehensive record of all communication between you and the acquiring authority. This could include notes from meetings, as well as records of losses and costs (as you may be able to reclaim these along with a compensation claim). Be forewarned that losses and expenses will only be reimbursed if they were accumulated as a ‘direct and reasonable’ consequence of the acquisition of the land by the local authority.

Additionally, there is a duty for those affected by a CPO to mitigate their losses by any reasonable means. This could include obtaining quotes from multiple reputable removals firms and choosing the cheapest wherever possible, to ensure losses are kept to a minimum.

There is no specific format for objecting, other than the fact that it must be in writing. Other people, who may not be the owners of the land, are allowed to object to a CPO – but they may not voice their opinion at the public inquiry. Similarly, the confirming authority is only obliged to hold an enquiry if there are any remaining objectors (a qualifying person who has objected and has not withdrawn their objection).

Who can make a CPO?

In most cases, a CPO is made by the purchasing authority or the Secretary of State. It must clearly identify the land affected by the order, and address the owners of it specifically, if they are known. If owners and tenants of the land, the CPO is directly affixed to the land – otherwise, the order is served to all tenants and owners.

If a CPO is confirmed, and someone has accumulated reasonable professional fees from preparing and negotiating the claim, compensation can generally be reclaimed from the acquiring authority – but it’s best to triple-check the government’s guidance on a case-by-case basis.

Ready To Build Job Replacing Income With Property?

Is there a right to object to or receive compensation for a CPO?

The government guidance allows people who have had a CPO lodged against them the right to object to it – but the cost of employing professional advisors has to be paid by the defendant. However, if the objection is sustained – for example, due to the CPO not being confirmed, or the land being excluded from a CPO, then once the confirming authority’s decision is issued, the defendant would then be entitled to seek an award of reasonable costs.

Objections usually fall into 3 main categories:

Agreement with the purpose of the scheme, but a wish for minor amendments to minimise the impact of the loss of land – which may include reducing the visual or noise intrusion of a scheme, or adjustments to the land boundary required;
Agreement with the purpose of the scheme, but a wish for the new project to be located elsewhere;
Complete objection to the scheme – but this cannot be on the grounds of objection to adopted planning policy (the expectations applied to development proposals).

CPOs and acquisition of land

Following a CPO, there are several methods available to acquiring authorities when they are aiming to acquire land. When acquiring land by agreement, the land will be negotiated over to try and reach a satisfactory deal, before the authority uses its compulsory purchase powers.

If the land is acquired following a notice to treat or notice of entry, this will be issued within 3 years of the CPO being published in a newspaper. The notice to treat will specify the land to which it relates, request certain particulars, state that the authority is willing to negotiate, and ask for the addressee’s claim in respect of the land – all within a set time. If the notice is not submitted by the addressee in due time, the acquiring authority has to refer the question of compensation to the Upper Tribunal or withdraw their notice to treat, abandoning their proposal to purchase.

As an alternative to the notice to treat, the acquiring authority can make a general vesting declaration (GVD) to acquire land. Not only does the GVD give the acquiring authority the right to enter and take possession of the land, but it transfers the title to the land over to the acquiring authority. They can also acquire land through procedures for acquiring short tenancies, or in response to a blight notice (a document which forces the authority to purchase the land on CPO terms).

If you’re looking for the perfect place to start your property investment journey, come to one of our informational property events, where our expert trainers will give you the tools you need to excel.