Could you be forced to sell your home? What happens if you’re faced with a compulsory purchase order
Imagine being forced to sell your home against your wishes to make way for future development in your area.
It seems far-fetched in a country where property rights are firmly enshrined in law, but this is what happens when homeowners are served with what is called a compulsory purchase order.
Compulsory purchase orders are used when all or part of your property is needed for new infrastructure, such as a road, railway, or utilities, or to regenerate an area to provide new housing and amenities.
Would you know where to start if you were faced with a compulsory purchase order?
The most high-profile use of compulsory purchase orders in recent times has been for the construction of the High Speed 2 rail link. This has been controversial and some owners believe they are not being given enough money for the homes they are forced out of.
Estate agents have warned that as the pressure for more housing and development increases, so will the number of these compulsory purchase orders.
Paul Astbury, an estate agent and member of the Royal Institution of Chartered Surveyors, said: ‘Compulsory purchase is an essential tool for delivering much needed housing and infrastructure, but it inevitably has a big impact on the lives of those losing their homes or business premises to make way for development.’
Rics suggested that many homeowners are not always aware of the options when faced with a potential compulsory purchase order.
This includes how to engage with the process and ensure that adequate compensation is provided.
Rics has issued some guidance, including on how to engage with the process and how to ensure those affected are properly represented.
Property owners can find themselves ‘bamboozled’ by the process, it said. This can be as a result of not knowing the difference between the many different types of orders, or not understanding the lengthy process that takes place before a shovel even hits the ground.
The principles behind compensation are set out in law, with any payment having to reflect the market value of the property or land concerned. Some orders in England and Wales may also offer a further ‘loss payment’.
The new Rics guide advises those affected on the entire compulsory purchase order process. For example, it highlights how those seeking to compulsory purchase must contact anyone affected with all the information about their project and the early purchase or mitigation options they wish to offer.
This could be in the form of an invitation to meet the developer directly or through written letter.
The guide goes on to cover what steps affected homeowners can take, including seeking an independent valuation, raising objections quickly and keeping record of expenses. These are the main points.
Seek an independent valuation
Homeowners are advised to get an independent valuation to ensure they are compensated fairly should the order go ahead.
Rics also recommends asking those behind such an order if they will meet the cost of seeking professional advice, as the process shouldn’t leave anyone but the developer out of pocket.
Raise objections quickly
In addition, anyone affected can object or make representations about whether the order should be authorised.
There are limited grounds on which an objection can be submitted so it is important to get appropriate professional advice, says Rics. And it also pays to be prompt – as there is a time limited window to submit representations.
Keep a record of expenses
Rics advises keeping all expenses logged and documented as it is necessary to provide evidence to support any compensation claim associated with the costs of moving home, buying a replacement premises, disturbance to your daily life and any removal expenses.
The publication of the Rics guide follows its research from earlier this year that suggested infrastructure projects – such as new roads, railways and power stations – are expected to increase in the next year as the Government plans to ‘build back better’ from the pandemic.
As these major projects, alongside plans for housing delivery and town centre regeneration, get underway the number of compulsory purchase orders sought to facilitate these schemes is also anticipated to rise, according to Rics.
Virginia Blackman, of the CPO working group, said: ‘Members of the Rics CPO Expert Working Group are focused on best practice in use of compulsory purchase to facilitate housing, regeneration, and infrastructure.
‘A key part of this is ensuring those affected have reliable, independent information on how proposals will affect them, and how best to find professional advice and representation.’