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Page 1: CPO MASTERCLASS - EM LawShareemlawshare.co.uk/.../2019/02/CPO-Masterclass-2018.pdf · negotiation had been pursued or at least genuinely attempted. ... •Housing and Planning Act

CPO MASTERCLASS

Bob Pritchard Weightmans LLP

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What Will Be Covered

• Recent Case law

• Recent changes to legislation

• Appropriation/interference with rights

• 10 Top Tips for successful CPO

• Housing Act CPOs

• Scenario discussion and questions

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CPO – Recent Renaissance

• Increased use of CPO

– brownfield sites/ town centre schemes –

fragmented and often uncertain ownerships

– Infrastructure schemes – linear CPOs

– Garden communities

• CPO “means to an end” – scheme delivery rather

than simply site assembly (see later)

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Recent Case Law

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BARKER) v (1) SECRETARY OF STATE FOR

HOUSING, COMMUNITIES & LOCAL GOVERNMENT

(2) LONDON BOROUGH OF BARNET (2018)

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BXC Case

• Challenge to BXC CPOs No.1 and No.2

• Claimants owned plot 19 in CPO2 area

• Full and final offer to purchase the claimants' land

for £4.2 million – made on day 1 of inquiry

• Claimants rejected that offer, insisting that they

wanted a much larger sum

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BXC Case

• Claimants argued:-

– Barnet had failed to enter into meaningful

negotiations with them to acquire their

premises

– Barnet had not provided adequate evidence to

demonstrate that it had taken reasonable

steps to acquire the premises by agreement.

– Decision that there was a compelling case was

disproportionate

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BXC Case

• Decision:

– CPO guidance should be followed

– guidance requires acquiring authority to

demonstrate that it had taken reasonable

steps to acquire all of the land and rights

included in the CPO by agreement.

– acquiring authorities were expected to provide

evidence that meaningful attempts at

negotiation had been pursued or at least

genuinely attempted

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BXC Case

• Meaningful negotiations - clear that the

Claimants’ property was for sale and they were

prepared to accept a sum of money for it - but

only one which was far in excess of that which

had been offered by Barnet

• The sums offered were equivalent to the amount

which would be awarded in relation to a CPO.

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BXC Case

• The amount of money demanded by the

claimants was wholly at odds with the

appropriate amount, given the land's market

value.

• Clear that there had been attempts to sell by

agreement, that those attempts had been

rebuffed by a wholly unrealistic approach to the

valuation of the property, and that reasonable

attempts at meaningful negotiations had been

made

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R (on the application of DANIEL CHARLESWORTH)

(Claimant) v CROSSRAIL LTD (Defendant) &

BERKELEY FIFTY-FIVE LTD (Interested party) (2018)

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Crossrail

• JR of Crossrail’s decision to dispose of land on

the open market and to treat B55 as the holder

of a qualifying interest.

• Crossrail subsidiary of TfL and acts on its behalf

on land acquisition

• Claimant held a lease of business premises in

Woolwich - freeholder was the LDA

• The premises were CPOd under the Crossrail

Act 2008 and demolished in order for the railway

to be built.

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Crossrail

• Land was to be disposed of - Crichel Down

applied

• Para.10 - former owners were to be given a first

opportunity to repurchase the land they had

previously owned unless its character had

materially changed.

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Crossrail

• Crichel Down Rules supplemented by C10 Land

Disposal policy:-

– Applies where land has materially changed in

character and requirement to offer back would

be otherwise excluded under para 10

– Holders of Qualifying Interests will be given

opportunity to acquire at market value

before offered to general market

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Crossrail

• Railway and station at Woolwich constructed –

surface of site no longer required for railway

purposes

• Material change in character of land in course of

construction – so Rule 10 applied.

• C10 then applied – Crossrail opted to dispose of

land as one large site including separate plots.

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Crossrail

• Crossrail considered that B55 had a QI as it had

bought the freehold from the LDA prior to the

acquisition of the land for the Crossrail project

and sold it to TfL a few days later.

• When both the Claimant and B55 expressed an

interest, Crossrail offered the site for sale on

the open market.

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Crossrail

• The claimant challenged that decision on the

ground that he had been deprived of his rights

as a dispossessed property owner.

• Claimant also disputed B55’S eligibility to hold a

QI, claiming that TfL had not acquired the land "by

or under threat of compulsion" so that para.7 of

the Rules did not apply.

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Crossrail

• HELD:

• Para.10 Crichel Down applied because there had

been a material change in the character of the

land in the course of the Crossrail construction

works.

• Crossrail correctly concluded that the C10 Policy

applied to the land in issue and had been entitled

to dispose of it as a single site.

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Crossrail

• B55 QI?

– land in issue fell within the compulsory

acquisition powers of the Act and was needed

for Crossrail

– TfL had the power to CPO the land and would

have had to exercise those powers in order to

build the station if an agreement had not been

reached with relevant landowners – including

B55.

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Crossrail

– The transfer to TfL had been negotiated on the

basis that those CPO powers existed

– clear from para.7 of the Rules that the fact that

land was acquired voluntarily did not mean

that it was not acquired under the threat of

compulsory purchase powers.

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Crossrail

– The exception in para.7, where land was

offered for sale before the negotiations for

acquisition, did not apply because compulsory

acquisition was imminent at the time of the

transfer to TfL.

– Accordingly, Crossrail had lawfully applied the

Policy to the land in issue

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Recent Legislative Reforms

• Housing and Planning Act 2016

• Neighbourhood Planning Act 2017

• September 2017 and April 2018

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Confirmation of CPOs

• From 6 April 2018 Secretary of State has had to

publish a timetable(s) in relation to steps to be

taken when confirming a compulsory purchase

order.

• The targets mean that acquiring authorities must

be notified within 10 days of the close of the

public inquiry into the CPO of the expected date

of the Secretary of State’s decision.

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Confirmation of CPOs

• Target dates for confirmation of CPOs are also

included in the updated guidance.

• Target that 80% of cases should be decided

within 20 weeks of the close of the public inquiry

– with the remaining cases decided within 24

weeks.

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Advance payments of CPO compensation

• If requested, amount payable is:-

– 90% of the agreed sum for compensation or

– 90% of the acquiring authority’s estimate of the

compensation due, if possession is taken

before compensation has been agreed.

• Prior to 6 April 2018 advance payments had to

be made within three months from the date of

request or when possession is taken (if later).

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Advance payments of CPO compensation

• Post 6 April 2018 acquiring authority must, within

28 days of receiving a request for an advance

payment, decide whether or not it has enough

information to estimate the amount of

compensation payable. If the acquiring authority

needs more information, it must then require the

claimant to provide it.

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Advance payments of CPO compensation

• Payment must be made:-

– by the date of service of a notice of entry or

GVD

– or within two months of a request from a

claimant (if later).

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Removal of second-bite compensation

• Claimants are no longer entitled to claim

additional compensation where, within 10 years

of the completion of the compulsory purchase by

the acquiring authority, a planning decision is

made granting consent for additional

development on the land.

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Time period for confirmation notices

• Must serve and publish a confirmation notice

within six weeks of a CPO being confirmed

(unless a longer period is agreed between the

acquiring and confirming authorities).

• CPO becomes operative on the date of the

confirmation notice.

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Compensation for disturbance

• Disturbance compensation for business tenants

and lessees with a break clause reformed

• Previously It was assumed that the landlord would

terminate the tenant’s interest at the first

available opportunity (Bishopsgate Space

Management v London Underground (2004)).

• Under the new provisions, the prospect of

continuation or renewal of the tenancy is to be

taken into account.

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No Scheme World

• Towards A Compulsory Purchase Code: (1)

Compensation (Law Commission 2003)

• “the most difficult subject we have had to

address in this project: the complex and

intractable problems arising from the so called

Pointe Gourde (or “no-scheme”) rule.”

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Bloor – Supreme Court

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Bloor – Supreme Court 2017

• “ The Upper Tribunal’s decision in the present case is

a powerful illustration of the potential complexities

generated by the 1961 Act in its unamended form. It is

to be hoped that the amendments currently before

Parliament will be approved, and that taken with the

2011 amendments they will have their desired effect

of simplifying the exercise for the future. It is no

criticism of the tribunal if parts of their reasoning may

appear obscure at first sight and require some

unpicking. ......”

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Concept of “no-scheme world”.

• Assumes that the scheme underlying the compulsory

purchase was cancelled on the valuation date (the

date of entry and taking possession of the land – if not

agreed earlier).

• Compensation for interests in land is its open market

value in the “no-scheme world”, disregarding both

any increase or decrease in the value of the land

which is solely attributable to the particular purpose

for which it is acquired, and the acquiring authority’s

need for the land for that purpose.

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September 2017 Reforms

• The new sections (s6A-6E inserted into the LCA

1961) articulate the no-scheme principle and set

out the parameters of how the “scheme” is to be

approached.

• Subsections (2) to (5) provide for special cases

including under s. 6D(3) and (4) where “land is

acquired for regeneration or redevelopment which

is facilitated or made possible by a relevant

transport project”

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September 2017 Reforms

• Relevant transport project - a transport

project carried out in the exercise of a

statutory function or by the exercise of

compulsory purchase powers (regardless of

whether it is carried out before, after or at the

same time as the regeneration or

redevelopment)

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Land Value Capture? – HCLG committee

Report 10 September 2018

• “…..we believe that the Land Compensation Act 1961 requires

reform so that local authorities have the power to compulsorily

purchase land at a fairer price. The present right of landowners to

receive ‘hope value’—a value reflective of speculative future

planning permissions—serves to distort land prices, encourage

land speculation, and reduce revenues for affordable housing,

infrastructure and local services. We do not believe that such an

approach would be incompatible with human rights legislation, as

there would be a clear public interest and proportionality case to

make this change.”

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Overriding and Appropriation

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Overriding and Appropriation

• Overriding – powers conferred on LAs and other

bodies authorising infringements of private rights in

relation to land (e.g. easements and rights to light)

when carrying out or maintaining works or

subsequently using land

• Appropriation – decision by a LA to appropriate land

it holds for one statutory purpose to some other

statutory purpose - often to take advantage of powers

to override rights

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s.203 HPA 2016

• Replaced powers to override rights acquired or

appropriated for planning purposes previously in

s.237 TCPA

• Although the powers under s.203 are broadly the

same as those under s.237, there is a new

requirement that the power will apply where the

LPA “could acquire the land compulsorily” for

the purposes of the development.

• Development must have planning permission

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S203 HPA 2016

• Could land have been CPOd for planning

purposes?

• Would facilitation of development justify an

interference with the rights of third parties?

• Is there a compelling case in the public interest?

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Spurs Tests

• Consideration 1: The use of statutory powers is

required in that:

– (i) The infringements cannot reasonably be

avoided;

– (ii) The easements to be interfered with cannot

reasonably be released by agreement with

affected owners;

– (iii) The development is prejudiced due to the

risk of injunction and adequate attempts have

been made to remove the injunction risks.

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Spurs Tests

• Consideration 2: The use of statutory powers will

facilitate the carrying out of the Development;

• Consideration 3: The Development will

contribute to the promotion and improvement of

the economic, social, or environmental well-being

of the area and therefore be in the public interest;

• Consideration 4: The benefits of the

Development could not be achieved without

giving rise to the infringements of the identified

rights ;

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Spurs Tests

• Consideration 5: Is it in the public interest that

the development is carried out?

• Consideration 6: Is the public interest to be

achieved proportionate to the private rights being

infringed by the action of Section 203?

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Compensation

• Compensation for interference with rights or

breach of restrictive covenant - the diminution

in value of the claimant's land as a

consequence of the interference or breach of

covenant

• n.b. claimant will not be able to pursue an

injunction to prevent the interference from

taking place - remedy is a claim for

compensation.

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Appropriation - Open Space

• Before appropriating open space must:-

– advertise intention to appropriate for two

consecutive weeks in a newspaper

circulating in the local area;

– consider any objections to the proposed

appropriation

• “Open Space” – land laid out as a public

garden, or used for the purposes of public

recreation, or land which is a disused burial

ground.

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N.B. Appropriation of Commons

etc.

• General power – s. 122 LGA 1972

• BUT appropriation of common, fuel or field

garden allotment above a 250 square yard

threshold can only be carried out pursuant to

s.229 TCPA 1990 - subject to procedural

requirements including submitting the order to

the Secretary of State for confirmation.

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Test For Appropriation

• 2 separate conclusions required:-

– land is no longer required for the purpose for

which it is held

– needed for the new purpose.

• whether the land is no longer required for the

current purpose is solely for the LA acting in

good faith

• In reaching this decision the LA must consider

the public need within the locality for the

existing use

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Western Power Case (2013)

• Cardiff Council held the relevant land as

public space.

• 1976 - fenced off

• Part of the land was used for allotments - the

other (disputed) part as a car park and a

grassed strip ancillary to the allotments.

• No documentation showing that it had been

appropriated in accordance with s.122 of the

1972 Act

• Council sought ‘official’ appropriation.

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Western Power

• Western Power grounds of challenge

– Council had not performed its statutory duty

under s122

– Council had placed excessive emphasis on

the current use of the land,

– Council had taken into account incorrect and

therefore irrelevant factors including that

current information showed that there was

actually a deficit of open space compared

with requirements

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Western Power

• The Court decided:-

– Council had made it clear that its decision

would be whether the land was no longer

needed as public trust land.

– It was entitled to take into account the

submissions of, and use of the land by, the

Allotments Society – even though this was

facilitated by the unlawful exclusion of the

public.

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Western Power

• BUT

– incorrect and inadequate information was put

before the Council e.g. - couldn’t reach a

decision on need in the locality for a public

space when the material deficiency in space

in 3 relevant wards was not disclosed or was

misrepresented

• Council’s decision to appropriate the land was

quashed.

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Moore Case (2014)

• SoS decision to confirm appropriation of

allotment land challenged

• SoS decision had been on basis of 600-650

dwellings

• Day after that decision the number increased to

750

• Increase could have affected decision to

confirm - so it was quashed

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10 Key Issues for Successful CPOs

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Key Issue 1 – The Compelling Case In the

Public Interest

• Essential question – will the public benefit associated

with the proposals outweigh the interference with private

rights?

• Applies to any CPO action

• Clays Lane case – compelling case was given status as

legal test for CPO

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Key Issue 2 - Don’t Forget The Scheme!

• CPO is essentially about scheme delivery

• Identify the scheme at the outset – level of detail will

vary but need to have a clear idea of what the end

product should be

• Regeneration CPO issues

– Escape velocity

– Viability v. step change

– Phasing

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Key Issue 3. – Reports

• Often have an initial “In Principle” Report

• This can assist with negotiations and reduce level of

objections

• Whilst CPO action will not follow immediately care

needed in drafting

– Can be referred to at inquiry

– Need to draft it to avoid the accusations that

authority had predetermined the use of CPO with

regard to a particular landowner

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Key Issue 3. – Reports

• ‘Final’ Report

• Should aim to be in a position to make CPO without delay

• Matters to cover:-

– “Compelling case in the public interest” – members should have sufficient information before them to allow them to come to an informed decision

– Refer to powers and how the statutory tests are met (see later)

– Planning

– Funding

– Delivery mechanism – e.g key aspects of DA

– Human rights (eg A8, A1 First Protocol)

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Key Issue 3. – Reports

• ‘Final’ Report

– Make sure delegations are dealt with

– If authority is needed to continue with voluntary

acquisitions recite powers.

– Draft Statement of Reasons should be

appended if at all possible

– Accurate CPO plan is important – if in doubt

about extent of boundary, put land in

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Key Issue 3. – Reports

• ‘Final’ Report

• Consequences of getting it wrong

– Possible challenge

– But more likely difficulties at Inquiry

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Key Issue 4. – CPO Powers

• Section 226(1)(a) TCPA 1990 as amended - key

regeneration power (including housing based

regeneration)

• If there is a specific power should use this rather

than opting for general LGA power

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Key Issue 4. – CPO Powers

• Whilst planning permission is not a pre-requisite,

still necessary to establish a robust planning basis

for a CPO under Section 226(1)(a)

• Significant advantages if a planning permission

is obtained for the underlying scheme before the

Order is made and especially before the CPO

Inquiry (see later)

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Key Issue 5. – Planning Backing

• CPO Guidance - no planning or other barriers to

proceeding with scheme

• Guidance suggests that planning permission need

not be in place (different emphasis for highway

schemes) BUT

– Needs to be a good reason why not!

– Can it be available pre – inquiry?

– If not in place, robust planning policy backing

even more important.

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Key Issue 5. – Planning Backing

• Planning Policy

– Helps to support scheme authority are

promoting

– Can help to resist rival schemes

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Key Issue 5. – Planning Backing

• Policy Includes:-

– Development Plan

– SPD – including development briefs

• Possibility of non – statutory policy backing to be

adopted at a later stage – (BUT risk area – see

Skipton Properties)

• NB links to other policy docs e.g.

– Regeneration policies

– Transport policy

– Economic policy

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Key Issue 6. - Deliverability

• Scheme must be acceptable from a planning

policy perspective and also from a

viability/deliverability point of view – the two

should overlap under local plan system

• Proposals should have a reasonable prospect of

being achieved within a reasonable timescale

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Key Issue 6. - Deliverability

• Funding may be:-

– Wholly private sector

– Wholly public sector – increasingly rare !

– Combination – regeneration CPOs will

commonly fall in this category

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Key Issue 6. - Deliverability

• Negotiations - start early and keep on throughout

process – deals often done in run up to and

sometimes during the inquiry!

• Avoid impression that CPO is first rather than

last resort

• Need to ensure consistency with deals –

particularly where there are a large number of

similar properties

• Identify “problem plots” early on and build into

strategy

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Key Issue 7. – Partnership Working

• Developer procurement

– When? – ideally pre CPO but it depends on

circumstances

– Partnership approach crucial – input into

planning process can be very helpful

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Key Issue 7. – Partnership Working

• CPO anchored projects often involve a number of

disciplines and partners

• Assemble team early on

• Need to have:-

– Clear roles and responsibilities;

– Strong and clear leadership;

– Appropriate and flexible decision making

arrangements;

– Core team and others to call on;

– Clear project plan

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Key Issue 8. – Human Rights

• CPO will interfere with individual rights.

• Key point will public benefit outweigh the interference?

• Article 1 First Protocol – property rights

• Article 8 – right to home private and family life

• Address at all stages of process including:-

– Board/Cabinet/Council report requesting authority to make CPO;

– Statement of Reasons;

– Statement of Case;

– Evidence

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Key Issue 9. - Relocation

• Aim to demonstrate that interference with individual

rights is proportionate by employing a relocation

strategy that minimises interference with individual

rights.

• Residential - relocation strategy essential, -

Inspectors at CPO inquiries have considered

individual re-housing issues

• Commercial - continuity of provision (eg retail) –

consider economic impact of CPO action and need to

minimise it

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Key Issue 10. – Anticipate Objections

• Common ones:-

– Need to protect private rights should outweigh

public interest

– Viability not established

– Scheme can be delivered without CPO

– Land can be excluded – particularly land on

CPO boundary

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Housing Act CPOs

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Housing Act CPOs

• Section 17 HA 1985 empowers local housing

authorities to acquire land, houses or other

properties by compulsion for the provision of

housing accommodation.

• Acquisition must achieve a quantitative or

qualitative housing gain.

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Empty Properties

• Last resort in situations where there appears to

be no other prospect of a suitable property being

brought back into residential use.

– How long has property has been vacant?

– What steps has the authority taken to

encourage the owner to bring it into acceptable

use and the outcome; and

– What works have been carried out by the

owner towards its reuse for housing purposes?

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Housing v Planning Powers

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Scenario and Discussion

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Check out the website …

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