Compulsory Purchase Orders – Basic Loss Home Payment

Dear All

I was asked at the Empty Homes Conference about the relevant notices that preclude the need to pay basic home loss payment to owners and where this is defined in the legislation.

I said that I would post it on the Network as it is a little convoluted on how you get there, so apologises for it being a bit legalistic.

Sections 106 to 110 of the Planning and Compulsory Purchase Act 2004 introduced ‘Basic’ and ‘Occupiers’ loss payments to be paid to claimants other than residential occupiers and residential owner-occupiers. These have been inserted into the Land Compensation Act 1973 as sections 33A to 33K.

It should be noted that the provisions relating to Home Loss Payments and Basic Home Loss Payments /Occupier Loss Payments are not consistent in that there are different qualifying conditions and minimum/maximum payments.

The new payments apply to displacements in consequence of Compulsory Purchase Orders made or made in draft on or after 31 October 2004. ‘Made’ in this context refers to the date that the CPO is formally put under seal by the acquiring authority and not to any later date of confirmation for example following a subsequent public inquiry.

Basic Loss Payments

Entitlement to payment

The Basic Loss Payment (BLP) is payable to a person

(a) who has a qualifying interest in land;

(b) whose interest is acquired compulsorily;

(c) to the extent that he is not entitled to a home loss payment in respect of any part of the interest.

Qualifying interests

An interest in land is a qualifying interest if it is a freehold interest or an interest as tenant and the interest subsists for a period of not less than one year ending with whichever is the earliest of:

(i) the date on which the acquiring authority takes possession of the land under section 11 of the Compulsory Purchase Act 1965;

(ii) the date on which the acquiring authority enters the land if it proceeds under Schedule 3 to that Act;

(iii) the vesting date if a general vesting declaration is made under section 4 of the Compulsory Purchase (Vesting Declarations) Act 1981;

(iv) the date on which compensation is agreed;

(v) the date on which the compensation is determined by the Lands Tribunal.

The provisions therefore do not apply to licensees, lodgers, squatters, trespassers or to the acquisition or creation of an easement or right of way.

Amount of basic loss payment

The amount of Basic Home Loss Payment payable to a qualifying claimant is the lower of 7.5% of the value of the interest upto a max £75,000.

Having regard to Planning and Compulsory Purchase Act 2004, which inserted Section 33D Loss of Payment exclusion into the Land Compensation Act 1973

This related to the old Section 189 /190 under the old Housing Act 1985 (in bold below), this was then updated by the Housing Act 2004, by Schedule 15 Section 4 to include the current Housing Act notices

Planning and Compulsory Purchase Act 2004

Section 106 Basic loss payment

(1) After section 33 of the Land Compensation Act 1973 (c. 26) (home loss payments for certain caravan dwellers) there is inserted the following section—

108 Loss payments: exclusions

(1) After section 33C of the Land Compensation Act 1973 (inserted by section 107 of this Act) there is inserted the following section—

33D Loss payments: exclusions

(1) This section applies to a person if—

(a) he is a person to whom section 33A, 33B or 33C applies,

(b) a notice falling within subsection (4) has been served on him in relation to the land mentioned in that section,

(c) at the relevant time the notice has effect or is operative, and

(d) he has failed to comply with any requirement of the notice.

(2) This section also applies to a person if—

(a)he is a person to whom section 33A, 33B or 33C applies,

(b)a copy of an order falling within subsection (5) has been served on him in relation to the land mentioned in that section, and

(c)the order has not been quashed on appeal.

(3) No payment may be made under section 33A, 33B or 33C to a person to whom this section applies.

(4)These are the notices—

(a)notice under section 215 of the Town and Country Planning Act 1990 (power to require proper maintenance of land);

(b)notice under section 189 of the Housing Act 1985 (requirement to repair dwelling etc. unfit for human habitation);

(c)notice under section 190 of that Act (requirement to repair dwelling etc. in state of disrepair);

(d) notice under section 48 of the Planning (Listed Buildings and Conservation Areas) Act 1990 (repairs notice prior to compulsory notice of acquisition of listed building).

(5) These are the orders—

(a) an order under section 264 of the Housing Act 1985 (closure of dwelling etc. unfit for human habitation);

(b) an order under section 265 of that Act (demolition of dwelling etc. unfit for human habitation).

(6) The relevant time is the time at which the compulsory purchase order in relation to the person’s interest in the land—

(a) is confirmed, in the case of an order falling within section 2(2) of the Acquisition of Land Act 1981 (procedure for authorisation);

(b) is made, in the case of an order falling within section 2(3) of that Act.

(7) The Secretary of State may by regulations amend subsections (4) and (5).”

(2) Section 33D of the Land Compensation Act 1973 (c. 26) (as inserted by subsection (1) above) does not apply in relation to a notice or order specified in subsection (4) or (5) of that section if the notice or copy of the order was served on a person to whom that section applies before the commencement of this section.

Then you need to look at the Housing Act 2004 SCHEDULE 15 Minor and consequential amendments section 4

4(1) Section 33D (loss payments: exclusions) is amended as follows.

(2) In subsection (4) for paragraphs (b) and (c) substitute—

“(b) notice under section 11 of the Housing Act 2004 (improvement notice relating to category 1 hazard);

(c) notice under section 12 of that Act (improvement notice relating to category 2 hazard);”.

(3) For subsection (5) substitute—

“(5) These are the orders—

(a) an order under section 20 of the Housing Act 2004 (prohibition order relating to category 1 hazard);

(b) an order under section 21 of that Act (prohibition order relating to category 2 hazard);

(c) an order under section 43 of that Act (emergency prohibition orders);

(d) an order under section 265 of the Housing Act 1985 (demolition order relating to category 1 or 2 hazard).”

So when pursuing CPO action it is beneficial to serve one of the above relevant notices / orders to avoid paying basic home loss payment in the longer run.

In addition, by serving a statutory notice and the Owner failing to comply with it helps justify the LA pursuing a CPO.

Please see this post in relation to grounds for refusal for CPOs, which highlights a strong emphasis for this approach.

https://www.ehnetwork.org.uk/library-item/summary-review-cpos-update-2017

Regards

Andrew Lavender

Housing Training & Consultancy

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