DIY CPOs

Oliver Bradbear looks at the circumstances in which landowners can use a purchase notice to initiate a Compulsory Purchase Order on their own land.

A purchase notice, if accepted or confirmed, is often referred to as a reverse compulsory purchase system – in certain circumstances, an owner can effectively initiate compulsory purchase of their land.

Section 137 of the Town and Country Planning Act 1990 enables a landowner to serve a purchase notice on the relevant local planning authority in the 12 month period following the refusal of an application for planning permission or listed building consent, a revocation or modification order, or a discontinuance, alteration or removal order.

A purchase notice can also be served following conditional grant of planning permission – recognition that while a grant of permission can exist, the relevant land might still be incapable of reasonably beneficial use following the carrying out of the permitted works.

In the majority of cases, a purchase notice may be served only by an ‘owner’ of the land, as defined in S336(1) of the 1990 Act. The land to which the purchase notice relates has to be identical to the area of land which was the subject of the relevant decision or order – if the notice relates to more or less land, it is invalid. Where multiple ‘owners’ are involved, a single purchase notice relating to their separate interests can be served, provided the notice relates to the whole of the land covered by the planning decision or order.

On receipt of a purchase notice, the local authority can accept the notice, seek another local authority or statutory undertaker who may be willing to comply with the notice, or reject the notice and refer the matter to the Secretary of State for their consideration.

When considering whether to accept or confirm a purchase notice, the relevant authority must decide whether the land has ‘become incapable of reasonably beneficial use in its existing state’ and whether the land could be rendered capable of a reasonably beneficial use by the implementation of a previous grant of planning permission, or through operations and uses that do not constitute new development.

A purchase notice is not a remedy for a developer unable to realise the full development value of their land; if an alternative reasonably beneficial use exists, the purchase notice is unlikely to be accepted or confirmed despite the apparent maximum value of the land not being realised.

When assessing reasonably beneficial use, it will be necessary for the relevant authority to consider the size, shape and surroundings of the land, its physical state, and the general pattern of land uses in the area. If a use of low financial value is common to an area - such as a series of undeveloped gaps in a large housing estate - this use is likely to be considered reasonably beneficial to the area as a whole.

Ownership can also be a material consideration. Were the land to be rendered capable of reasonably beneficial use if it were owned by an adjoining landowner or neighbour, this could be a relevant factor if there was sufficient evidence the adjoining landowner would be interested in purchasing the relevant land and able to do so. Whether the land has been marketed locally will be considered by the relevant authority; if it can be demonstrated no local third party is interested in purchasing or renting the land, it is more likely the purchase notice will be accepted or confirmed given the lack of a clear and obvious reasonably beneficial use.

Equally, while the absence of financial gain is not necessarily material, a reasonably beneficial use does not have to be profitable. In one of my recent matters, the appointed Inspector concurred that land designated as Local Green Space in a Neighbourhood Plan continued to have a reasonably beneficial use despite the lack of public access. The reasonably beneficial use was not a financial benefit, but a community gain.

An initial test when contemplating whether to serve a purchase notice might be to consider whether an open market financial value can be attributed to the relevant land. If so, it likely continues to have a beneficial use as set out in paragraph 303 of the Guidance on Compulsory Purchase Process and The Crichel Down Rules, ‘where the use of land would mean it had some marketable value the land would be capable of reasonably beneficial use. Any reasonably beneficial use would suffice.’

One final point to consider is that even if a purchase notice is accepted or confirmed, land that is acknowledged to be incapable of reasonably beneficial use will in most cases have little value. The costs of a contested notice are likely to outweigh the ultimate sale price; a purchase notice should be considered as a means to rid a landowner of a liability, not as a tool for financial gain.

Oliver Bradbear is a Planning & Highways Lawyer at Cornwall Council Legal Services