There may be some instances when a property becomes subject to a compulsory purchase order. When this happens the owner of the property will more often than not be forced to sell. Every property owner needs to be well-informed in order to get the best deal possible out of selling.
What is a CPO?
Compulsory purchase orders can be authorised by public bodies when the property is considered an obstruction to a government project. The main reason why properties will be subject to a CPO is when the prospective project is meant for the public’s greater good. Some examples of public bodies that can authorize a CPO are highway authorities, regional development agencies and English Heritage.
It is important to keep in mind that private entities do not have the power to force any individual to sell a property. Even public entities that acquire a CPO for a property still need to defend the purpose of the acquisition and ensure that there is a compelling reason for a property owner to sell.
A compelling reason can be the building of new roads or commercial centres. In some instances, it can also mean that the property is already considered a possible public danger and, therefore, needs further looking after. Remember also that public bodies cannot simply get a CPO whenever they think it is necessary. They would first have to exhaust all possible options before resorting to a CPO.
Agreeing to a settlement amount
If a regeneration scheme does not apply, the property owner is entitled to a payment equivalent to the market value of the property. Compulsory Purchase Compensation may also include an addition of up to 10% according to varying circumstances. Unfortunately for property owners, the market value of the property when it was bought will not be considered in the valuation for the payment. Some additional entitlements for the settlement may include:
- Costs incurred for hiring a surveyor that will also act as a negotiator between the property owner and the solicitor to facilitate the ownership transfer.
- Compensation for disturbances caused by having to purchase another residence in a different location. You can also recover certain costs associated with property losses as well as the cost of disconnecting and reconnecting utilities and other services.
These will vary depending on the situation; that is why anyone who is subject to a CPO should consult an expert to discover the entitlements. You can find a specialist in your area that can help with such matters.
Are negotiations necessary?
It is not always necessary, but property owners threatened with a CPO may consider entering into negotiations. Property owners also have the responsibility to respond to all the correspondence received from the public body.
If you also want to protect yourself, property owners and homeowners can seek the assistance of service providers that specialise in matters related to CPOs. The more informed you are as a property owner, the better your chances are of getting a good settlement.
