Compulsory Purchase and Compensation

March 31, 2017

What is compulsory purchase?

The law gives powers to a number of public bodies to compulsorily acquire land (by a vesting order) for a specific purpose (such as regeneration or infrastructure provision), if the landowner is not willing to sell by agreement. Compulsory purchase powers can be viewed as a sensible tool enabling certain bodies to carry out their statutory duties efficiently.  An alternative view is that they are a set of draconian powers implemented to the detriment of landowners, interfering with their fundamental rights to property.

Who has compulsory purchase powers?

A number of public bodies have compulsory purchase powers including the Northern Ireland Housing Executive, Northern Ireland Water, Northern Ireland Electricity and Transport NI.

How does a public body use their powers?

The public body must submit an application for a vesting order on the prescribed form to the relevant department, which may be the Department for Communities or the Department for Infrastructure.

The public body seeking to acquire land must make their case for compulsorily acquisition. For example, under the Planning (NI) Order 1991 the land must be required in connection with a development scheme and it must be in the public interest or “expedient to acquire the land for a purpose which it is necessary to achieve in the interests of the proper planning of an area”.

Notice of intention to vest the land is then published by the Department on at least two occasions in the locality in which the land is situated and served by the Department, on every person appearing to have an estate in the land affected. There is then a period within which objections to the vesting order can be made. If objections are made, then unless they are withdrawn, a public inquiry will be held after which a decision will be issued as to whether or not to make the vesting order. Once the vesting order has been made, a notice of such must be published and the land will vest in the public body from either the date on which the vesting order becomes operative, or from the date of registration at the Land Registry.

Am I able to object to the compulsory acquisition?

Yes. The notice of the intention to make a vesting order will normally specify the time within which objections should be lodged.

What are the grounds of objection?

Grounds might include:

  • That the order was not made within the promoting public body’s statutory authority.
  • That it is not necessary to acquire the site or part of it by compulsory purchase.
  • Procedural requirements have not been followed.
  • Human Rights will be infringed.

Once a vesting order is made following a public inquiry, can it be challenged further?

Yes. The validity of a vesting order can be challenged in proceedings in the High Court within 1 month from the publication of the notice of the making of the vesting order. A challenge is by way of statutory review and is strictly limited in terms of time, form and grounds.  For example the making of the vesting order is outside the powers conferred by legislation and/or non-compliance with relevant statutory procedures.  The High Court will not be concerned with the merits of the decision to make the vesting order and the order will only be quashed if it results in substantial prejudice to the interests of the applicant.

Am I entitled to compensation?

Yes. Depending upon the particular circumstances in each case, compensation can be claimed for the value of the land taken, the depreciation in the value of land where part only of the land holding is acquired, disturbance fees (removal costs and loss of fixtures and fitting etc) and reasonable fees for surveyors and solicitors. There also may be an entitlement to a home loss, basic loss and occupiers loss payment which are prescribed sums of money to compensate a landowner for the fact that the land is being acquired at a time not of the landowner’s own choosing.

How is compensation calculated?

The calculation of the amount of compensation is complicated. Generally it is calculated by reference to the compensation code, which is a collective term for the principles, derived from legislation and case law, relating to compensation for compulsory acquisition. The payment is designed to ensure that a landowner should be no worse off in financial terms after the acquisition than it was before. Likewise, the landowner should not be any better off.

What is the valuation date for the assessment of compensation?

The valuation date is the date the title of the land vests in the public body acquiring the land. This is the operative date of the vesting order. There is no adjustment to compensation for anything which happens after this date.

It is important to note that disputes over compensation do not constitute grounds for objection to a vesting order. Disputes over compensation are dealt with separately from objections to the order by a different body – the Lands Tribunal.

Please note that the content of this article is for information purposes only and advice should be sought from a professional adviser. Please contact our Planning and Environmental Team at Cleaver Fulton Rankin for further advice or information.