The Scottish Government is considering reform to the compulsory purchase system, to make the system simpler, more streamlined and fairer for all parties. This process is at an early stage, and it is expected that there will be a public consultation on proposed measures later this year. We outline in this article the current system of compulsory purchase and what changes may be brought in by this reform.
What is compulsory purchase?
Compulsory purchase is a legal mechanism whereby certain bodies (known as “Acquiring Authorities”) can acquire land (or rights in land) without the owner or the tenant’s consent, in order to deliver projects that are in the public interest. Acquiring Authorities are public services organisations with special powers, for example local councils, utilities companies, Transport Scotland and Network Rail.
Receiving a Compulsory Purchase Order
If an Acquiring Authority is seeking to acquire a property (or part of it) they may serve the property owner with a draft Compulsory Purchase Order (“CPO”). Owners have a strict time period from receipt of a draft CPO to object to it. If no objection is submitted, the opportunity to challenge the compulsory purchase may be lost. It is therefore important to seek professional advice from a solicitor, surveyor or land agent as soon as any compulsory purchase notice is received.
Objecting to a Compulsory Purchase Order
A property owner who receives a compulsory purchase notice has an opportunity to object to it on several grounds. These grounds may include:
- Objecting to the underlying purpose of the project;
- Objecting to the location or route of the project site, on the basis that an alternative route or site would be better;
- Objecting to the timing of the project; and
- Challenging the lawfulness of the compulsory purchase, for example arguing that it is not in the public interest.
The objections of property owners must be considered and sometimes a Public Local Inquiry will be held, where an independent reporter will hear from objectors and from the Acquiring Authority. The reporter will produce a report containing their conclusions and recommendations and submit it to the Scottish Ministers who will ultimately decide if the compulsory purchase may proceed, and any modifications to the compulsory purchase proposal.
Voluntary Agreements
Acquiring Authorities and property owners will sometimes reach a ‘voluntary’ agreement to acquire land, on the understanding that, if an agreement is not reached, the Acquiring Authority will exercise their powers of compulsory purchase. These negotiations might happen before the compulsory purchase process begins, or in tandem with it. Depending on the circumstances, such agreements may suit both sides – they allow for greater flexibility in negotiations whilst avoiding the time and cost associated with the full compulsory purchase process.
Compensation
Property owners whose land has been compulsorily acquired are entitled to compensation for the value of the property and for disturbance (including removal and relocation costs, any loss of profits and professional fees). In certain circumstances they will also be entitled to other forms of compensation. The Acquiring Authority can take ownership of the land before compensation is paid.
Proposals for reform
The Scottish Government’s proposals for reform are split into five areas: enabling powers; early engagement and preparation; confirmation procedures; taking possession and title; and compensation. The stated overall objective is to simplify and streamline the system with the intention to be fairer for all parties involved. The hope is that this will encourage Acquiring Authorities to use compulsory purchase powers where appropriate and in the public interest. The public will have an opportunity to contribute to these reforms when the public consultation is published later this year.
If you would like to discuss Compulsory Purchase Orders further, please get in touch with a member of our Land & Rural Business team.
