What is a Compulsory Purchase Order (CPO)?
A CPO allows acquiring authorities like local authorities, to take land & property without the consent of the owner and provide compensation for this. The CPO is often used to allow a public infrastructure project to go ahead for the common good.
The current compulsory purchase system can be a daunting experience for individual property owners, involving public enquirers, official notices with time limits, and complex and unfamiliar terminology. While compulsory purchase powers are wide-ranging and often viewed as draconian, many national infrastructure projects like motorways, railways, electricity and water schemes could not progress without using these acquisition powers.
Steps in Compulsory Purchase
- A statutory body decides to make a CPO.
- Affected parties will be served with a notice and newspaper notices will be published, compulsory purchase order stating that the Order is about to be put on public display and submitted to An Bord Pleanála for confirmation.
- Objections can be made, but valid objections are generally on planning or legal grounds only. A Public Local Enquiry is held at which affected parties can formally put their views forward (If no objections are made An Bord Pleanála can confirm, amend or reject the CPO without a Public Enquiry).
- An Bord Pleanála either confirms, amends or rejects CPO order and publishes details of the decisions in this regard.
- After expiry of objection period, the CPO is operative.
- Acquiring Authority serves Notice to Treat on the affected parties and discussions commence regarding the level of compensation available.
- The affected party lodges a claim for compensation. This can be made by the claimants’ valuer.
- On reaching agreement, compensation is paid, otherwise the matter may be referred by either party to the Property Arbitrator to assess compensation.
- Acquisition is finalised, compensation paid.
What do I do if my property is subject to a CPO?
As soon as you become aware that your property is affected by a CPO process, without delay you should seek the property advice of a chartered valuation surveyor experienced in the area of CPO. The cost of such services are part of a normal claim for compensation. A number of key issues arise from CPO such as:
- The basis of compensation for property acquired is market value.
- Principle of Equivalence. This requires that the affected party is left in the same financial position after the CPO as they were prior to the process.
- The compensation should reflect both the actual land acquired and the diminution in value (if any) of the retained area as a result of the CPO.
How is compensation assessed?
The assessment of compensation will generally fall under a number of headings of claim which can include the following:
- Value of land acquired
- Diminution in value of retained lands, if any
- Costs resulting from acquisition
- Loss of profits or goodwill
- Loss or depreciation of stock in trade
- Professional fees necessary for acquisition The acquiring authority normally pays the claimants reasonable chartered valuation surveyors fees and also the claimants reasonable legal fees
Terms for easy reference
Notice to Treat
A notice to treat is served on all claimants whose properties are included in the CPO, requesting them to submit detailed claims for compensation.
Notice of Entry
Once the CPO is confirmed and the notice to treat is served, the Acquiring Authority may serve a notice on the owner / occupiers to enter on the lands. It gives the statutory authority the right to enter and take possession of land. This may occur before compensation is agreed and before money has been paid.
This comes about when part only of the affected party’s property is acquired, e.g. for road widening, dividing the retained property into two or more parts, and leaving lands which have been reduced in value as a result of the acquisition. In this case the affected party is entitled to compensation on both the lands taken and the diminution in value of the retained lands.
This comes about if there is a reduction in value of the retained lands caused by something which happens on the other lands acquired from the affected party. An example of this could be where a sewerage treatment works is built next door to your house on land compulsorily acquired from you.
There are also some very limited cases where compensation can be payable resulting from the construction of a scheme on other lands. On occasion the Acquiring Authority can be forced to purchase an entire property even though only a portion of the property is the subject of the compulsory purchase order.
Find an Expert
If you are affected by a CPO, you should contact a chartered valuation surveyor to assess the claim.
A chartered valuation surveyor experienced in CPO will also be able to assess the compensation payable to you by compulsory acquisition and negotiate to make sure you get full compensation.
Trust your property with a chartered valuation surveyor to ensure claims are assessed properly and that you get full compensation for your property.