As a local authority, we have the power to make a compulsory purchase land in our area. This is subject to proving that the development, redevelopment or improvement of the area promotes or improves the economic, social or environmental wellbeing of the area.
We will only consider the use of a Compulsory Purchase Order (CPO) as a last resort. Any decision we make will always be subject to the final approval of the Secretary of State.
If you are part of a community group, you can ask us to use our compulsory purchase power to buy a property which has been designated an Asset of Community Value and which the owner is unwilling to sell. However, you must have a scheme in mind to take the asset forward.
How the Compulsory Purchase process works
Before you approach us
Before approaching us, you must do the following:
- identify an under-utilised property
- decide on a use for the property
- develop a business plan showing that the proposal is economically and practically viable
- negotiate the purchase of the property with the owner
If all reasonable steps to negotiate a purchase have failed, then you can request that we use our discretionary Compulsory Purchase Order power.
If we agree to progress then the following procedure will be followed:
- you will provide evidence to us (see ‘Evidence Required’ section). We will brief relevant Executive Members (members of Cabinet who been given areas of responsibility). Local Ward Councillors will also be informed.
- we will review the information you have provided
- if we deem that a CPO can be justified, then we will prepare a report to Full Council
- Full Council (a meeting of all Councillors) will decide on whether to proceed, based on whether there is a “compelling case in the public interest”
If we decide to use a CPO
If the Council decides to use a CPO the process is as follows:
- we will write to the Secretary of State to explain why the CPO is necessary
- if the Secretary of State is content that the CPO is justified, then they will formally notify the property owner
If the owner does not object
If the owner does not object then the CPO can proceed, and we will then try to agree on the level of compensation payable with the owner.
If this is agreed then we will pay the compensation to the owner and the property transfers to us. If the amount of compensation cannot be agreed then the matter is referred to the Upper Tribunal.
If the owner objects
If the owner objects to the CPO then the process continues as follows:
- the Secretary of State will appoint an independent inspector to conduct a public inquiry (we will be required to meet the costs of the inquiry)
- if the inquiry confirms the CPO then we will try to reach agreement on the amount of compensation payable with the owner
If agreement can be reached, then we will pay the compensation to the owner and the property transfers to us.
If, however, agreement cannot be reached, then the process continues as follows:
- the matter is referred to the Upper Tribunal - Lands Chamber, which will decide on the level of compensation. This can be a lengthy process that will incur more costs.
- when the Upper Tribunal has reached a decision, we will pay the compensation to the owner and the property transfers to us.
You will then need to purchase the property from us. You will also need to pay us back for all the costs we have incurred.
What you need to provide
You will need to provide evidence of:
- discussions and negotiations with the owner in relation to the purchase of the property. This should show that all attempts to buy the property at a fair price through negotiation have failed.
- that a development, redevelopment or improvement to the property would promote or improve the economic well-being, social well-being or environmental well-being of the area. This could be based on reinstating a previous use of the property or could be a new use of the property. This would also need to show that the current use by the existing owner, or any planned use by the owner, or a new owner, could not achieve these benefits.
- that the use proposed (following a successful CPO) is in accordance with the planning permission for the property or planning policy.
We will also need evidence of an exit route. This is most likely to be a commitment from you that you can purchase the property at the end of a successful CPO process.
This means you will need to give us:
- a copy of the constitution of your community-based group to demonstrate a commitment to the process and that any guarantees made to us can be relied upon
- evidence of funds that have been raised or a plan as to how they will be raised. This might include loan funding, grant funding or a community share investment scheme. These funds will need to cover the full costs incurred by us in going through the CPO process, including a commitment to fund the costs incurred even if the CPO is unsuccessful.
- a business plan to demonstrate the sustainable use of the property following the CPO. While we would not have an ongoing interest in the property, we need to see that the property would be put to its intended use.
The information above will not all be needed right at the start of the process. It is expected that this will be provided throughout the process and we will provide assistance and guidance throughout, if we decide to support the application of a CPO.
How we will support you
We will assist you by:
- providing advice on what is needed at each stage
- providing feedback to you on the information that has been provided
- informing you as soon as possible if we think that the CPO process is unlikely to be successful - we don’t want to waste anyone’s time on something that will not proceed
- updating you on the costs incurred if the CPO is progressed
If approached by the property owner the Council will also advise them on the process and provide information on the stage that has been reached.
A Local Councillor may support negotiations between the property owner and the community group.
What we will not do
We will not:
- threaten a property owner with a CPO process, though we will inform a property owner if we are planning to take a report to a Full Council meeting
- continue the CPO process if it is clear that a property owner is making progress towards putting a property in to use, in which case any CPO activity will be paused until it is clear how this will proceed
- continue the CPO process if a planning application is made to a change of use, in which case any CPO activity will be paused until the outcome of the planning application is decided
We will not incur costs in relation to a CPO process unless there is an agreement that we will be reimbursed. We are facing significant financial pressures, and whilst a CPO could have a very important impact on a small area of the community, the impact is usually quite small in relation to the whole of North Hertfordshire.
Cost of a CPO
The costs involved in a CPO process could include the following:
- payment to the owner (this will include the market value of the property, plus compensation to the owner for disturbance, distress and inconvenience)
- legal costs incurred by us
- the cost of a public inquiry
- tribunal costs to determine the compensation payable and property transaction costs, and
- property transaction costs (e.g. Stamp Duty Land Tax)
Our legal costs and the costs of a public inquiry could still be incurred even if the CPO process is unsuccessful (depending the stage at which the process stops) and would still fall on us even if it is successful. These could be in the order of £100,000. We will require compensation for these costs from you, even if the benefit of gaining the property is not achieved.
We may ask for payments throughout the various stages of the CPO process. This will only be for costs actually incurred up until that point.
Further information
If you have any questions in relation to the CPO process (either as a community-group or a property owner) then please e-mail ian.couper@north-herts.gov.uk. Please include a contact phone number if possible.