Budget for CPOs and enforced sales

We are intending to seek member approval for the use of CPO's and enforced sales to bring empty properties back into use. Does anyone have some average estimated costs we can put in a budget proposal for next year? For example, the average cost to the local authority of implementing a CPO on a three bed house is .... and of an enforced sale is ..........

Or if anyone has more detailed breakdown of costs these would also be welcome.

John Brinkley South Norfolk Council

Forums: 
CPOs

This is a summary of the expected costs of an uncomplicated CPO, where the open market sale can be made before the compensation is paid. This is what we use in our commitee reports.
Legal and Administrative Costs:
(Legal costs are based on figures provided by nplaw CPO specialists)
(These costs are unavoidable)
            Legal costs of making the order                                          £1,500 approx
            Advertising costs (notices in paper)                                   £1,500 approx
            Possible SDLT* payable on acquisition                            0 - 15% of value
            Land Registry Fees                                                              £200
*Stamp Duty Land Tax (SDLT) is paid on property sales with values over £125,000.
If there is a Public enquiry:
(A public enquiry is triggered if a relevant person objects)
            Sectary of States costs for holding the inquiry                   £5,000
            Legal costs for public enquiry                                              £2,000 approx
If the CPO is confirmed compensation is payable:
            Market Value of the property                                               £XXX
            Basic Loss Payment*                                                           7.5%
            Surveyors fees and negotiating compensation                 £1,000 approx
            Other possible compensation payments**
*Basic Loss Payment is not payable where certain statutory notices have been served prior to commencing the CPO process and they have not been complied with. Land Compensation Act 1973 sec 33D
**Other compensation payments may include Disturbance payments, such as the costs of removing furniture from the property          
If the CPO is not confirmed:
            Objectors costs                                                                     £10k plus
With carefully planned vacant property cases this risk is small
For a single property CPO with a market value of £100,000 a minimum budget of £18,700 would be needed plus the £100,000 market value (however it is expected the properties could be sold before payment to the ex owner). Therefore a useable budget of £20-25,000 would demonstrate the capacity to resource a single property CPO, taking into account an additional contingency figure.
Enforced sales should in theory be cost neutral as all the legal costs can be recouped, however the up front funds for the works in default will be needed.

Just a note to build on what Luke has stated
If you pursue a CPO under Section 226 Town and Country Planning Act 1990 and sell it back to back to a developer, then you can also avoid paying stamp duty.
And as Luke has mentioned service of certain notices will enable the LA to avoid paying homes loss payment.
In addition,  non compliance of a Statutory Notice strengthens your  case to pursue a CPO
Regards
Andrew Lavender

Hi
 
Can the Authority recover all or any of the costs incurred for a CPO?
 
Cheers Hilary, Devon.

No these costs are not recoverable, you can only minimise the costs using the tactics outlined by Andrew and Luke. The most expensive part is the Public Enquiry. Judicious selection of a property (e.g. one where the owner cannot be found) can reduce the likelihood of this, as can engagement with owners where they are open to negotiation. We did a CPO on a property where the owner could not be traced for about £2,000. We also did a large Housing Market Renewal CPO for about 120 properties and avoided a public enquiry that would have been very costly by prolonged and painstaking negotiation with the owners. This took a long time but was worth it to avoid the cost and uncertainty of an enquiry.
There are good reasons why CPO costs are not recoverable. The general logic behind CPO is that public authorities can in certain circumstances interfere with someone's property rights to facilitate a public good. The basic test that has to be passed for a CPO to be granted is that the public good outweighs the harm that is caused by the interference with property rights. If this test is passed, then the owner has to be properly compensated for their loss. It would be somewhat perverse if instead of being compensated, the loss was accompanied by a charge for the authority's costs. CPO is not designed to be an enforcement tool although it is sometimes used as an alternative to enforcement in the context of empty homes.
This is in contrast with enforced sales, where the powers used are related to recovery of debt. It is logical in this scenario that the costs of the authority recovering the debt should also be payable by the debtor.

Hi
 
Many thanks for this information - it's very useful
 
thanks Hilary