Compensation Arising From A Compulsory Purchase Order
The use of compulsory purchase powers by public bodies is so
Draconian that it can be expected that the law provides that anyone
whose interests are adversely affected by a compulsory purchase
order (CPO) should be entitled to adequate compensation.
The suite of legislation which governs compulsory purchase
generally does indeed provide for payment of compensation. In
addition, not only do the courts apply a presumption that a body
will not be entitled to acquire property compulsorily without
paying compensation, the European Convention on Human Rights has
been interpreted as requiring sufficient compensation where
relevant interests are lost by compulsory purchase.
The devil, of course, is in the detail. Whether a particular
person's loss of property rights attributable to a CPO creates
an entitlement to compensation will depend on the precise
provisions of the relevant legislation. This article is intended to
provide a very brief overview of some of the rules which govern the
payment of compensation in Scotland.
The entitlement to compensation in respect of special matters
such as injurious affection, severance and blight is not discussed
in this article.
Compensatable rights
The most obvious right affected by a CPO is that of ownership of
land or buildings which is appropriated by the authority making the
CPO. Compensation will be due where either the whole or part of the
property is taken in terms of the CPO.
Occasionally, the acquiring authority does not need to become
the owner of property for the purposes of its scheme and may only
require a limited right, such as a servitude right of access, to
use the property instead. Compensation is thus due in respect of
the acquisition of such rights falling short of ownership.
A tenant under a lease has a compensatable interest and,
although the acquiring authority is not obliged to serve a notice
of the making of a CPO on a tenant whose lease is for less than a
year or from year to year, such a tenant is nonetheless entitled to
compensation if the authority terminates the tenancy early and
takes possession.
It is not only the owner and tenant of property subject to a CPO
that may be entitled to compensation: any other person with a legal
right to use the property , such as a person who has a servitude
right over that property which will be extinguished by the CPO, and
persons who are entitled to enforce title conditions affecting the
property which will similarly be extinguished, may also be entitled
to compensation.
Claiming compensation
Although the law requires the acquiring authority to pay
compensation, it is up to the person whose interests are affected
to make a claim for compensation. The confirmation of the CPO
itself does not trigger entitlement to compensation since
confirmation merely entitles the acquiring authority to take
further steps to appropriate all or any part of the land described
in the CPO. The authority makes its intention to take the required
property known by serving a notice on all affected persons of its
intention to vest in specific property in terms of a General
Vesting Declaration (GVD), the notice inviting claims for
compensation. This notice specifies the date of vesting of the GVD
and it is this date of vesting which crystallizes the point at
which the rights to be acquired are to be valued.
Once a claim is made, there normally follows negotiations
between the authority and the affected persons but if no agreement
can be reached as to the amount or basis of the valuation, the
claimant has the right to refer the dispute to the Lands Tribunal
for Scotland whose decision is binding unless either party has the
right to...
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