Frequently Asked Questions

You have a right to challenge a CPO by objecting. You need to understand the legal protections and entitlements afforded to property owners and your right to fair compensation for the value of the property being acquired. Also any business losses, known as disturbance and any costs you incur. There is a strict statutory process and safeguards in place which we can explain and advise on to ensure property owners and occupiers are treated fairly throughout the compulsory purchase process.

Compulsory purchase is a legal process where a governmental body or authority can acquire land or property without the owner's consent, usually for public infrastructure projects such as roads, railways, or urban regeneration schemes. The criteria for using compulsory purchase involve demonstrating a public need, such as improving transportation or enhancing public amenities. The party losing their property has a statutory right to compensation as a result of the CPO

There is no one answer. Residential and commercial property attracts different levels of compensation and the method of calculation varies. Factors to consider when determining compensation include the market value of the property, any special characteristics or potential alternative uses, and any losses incurred as a result of the acquisition. Market value of property, statutory payments, costs incurred and any losses as a result of the compulsory purchase are the major heads of claim.

The type and level of compensation varies depending on your specific situation. Do you own the freehold interest in the property or leasehold ? Or you in occupation of the property or is it an investment property you rent out to a tenant ? There are three broad compensation headings when you lose your property through compulsory purchase. The value of the Property, any loss of income because of the loss of the property and any costs incurred in dealing with the CPO. In addition to this you are entitled to statutory loss payments.

There is no best time to do a deal and there are many factors which can affect the negotiating process. In some instances it can be beneficial to reach an early settlement, there are benefits to the acquiring authority in doing quick deals and avoiding expensive legal fees. However there are many acquiring authorities (e.g. a Council) that make unreasonably low offers in advance of compulsory purchase powers and it would not be advisable to reach an early settlement. I would always recommend opening discussions early as there is never any benefit in ignoring the situation.

This is very much in the ‘how long is a piece of string’ territory. We act for clients in Southwark in South East London where there process has been dragging on for over fifteen years. At Woolwich in east London client shave been waiting over ten years for the compulsory purchase to progress. The timeline starts once an acquiring authority ‘makes’ the CPO. From then, if everything goes to plan, possession of your property could be taken approximately fifteen to eighteen months later. However they could also wait a further six years before they take possession.

You will need to take advice from a chartered surveyor specialising in compulsory purchase. In advance of taking on any work your surveyor will ask for a legal undertaking that ensures the acquiring authority or developer pay for your advice. Once the compulsory purchase is confirmed there is a statutory obligation on the acquiring authority to compensate property owners and occupiers for their surveying, legal and any other reasonable and necessary professional advice you are required to take. The affected party should not pay any costs apart from an costs incurred in objecting to the compulsory purchase order – these fees are not generally compensated.

Once a compulsory purchase order is made, you have twenty one days to object to the order. If you have not reached a settlement with the other side, you should object in order to protect your position. If successful with your objection you may convince the acquiring authority to remove your property from the scheme or in some instances, stop the compulsory purchase order entirely. It should be noted, fees to object are not compensated unless you are successful.

Certainly not. Most cases do not need to referred to the Upper Tribunal of the Lands Chamber. It is much more common that both sides agree to the level of compensation. However, there can be occasions where there is a strong difference of opinion regarding the value of property or the compensation owed to a business. There can be situation where one side believes the Property should be valued as development land for housing and the other side believe it should be based on open storage industrial values. Ona major difference liken this then a Tribunal reference might be necessary. Olden Property can act as expert witness at the Upper Tribunal.

You will need a solicitor at certain stages of the CPO process. If you choose to object and appear at the Public Inquiry, you may need to instruct a solicitor at this point. Once you agree a compensation package with the acquiring authority you will need to instruct a solicitor to deal with the contract and conveyancing. Olden Property works with a number of excellent solicitors we would be happy to recommend. m description

—You must be the registered Leaseholder (known as a tenant) of the flat for two years before the date of the claim

— You do not need to be an occupier of the flat

— You must hold a lease that had a fixed term of more than 21 years when it was originally granted

— Personal representatives of a deceased tenant can make a claim provided that the right is exercised within a period of two years from the date of grant of probate

— The assignee of a tenant’s notice served by a tenant who has for the previous two years been a qualifying tenant of the flat also qualifies

— There is no limit to the number of flats you may own in the building

— You may extend any or all of them

— You cannot be a qualifying tenant if you hold a business lease, lease from a charitable trust, or a sublease that breaches the terms of a superior lease.

A lease can be extended at any time, however if your lease is approaching 80 years, you should consider extending as soon as possible.

If you have a short lease, for every year that passes the premium to extend will increase. Letting a lease run below 80 years also brings into consideration the marriage value, which will dramatically increase your costs.

Marriage value is the increase in the value of the property once the lease has been extended, usually 50% of this amount is payable to the landlord. This would be added to the cost of extending the lease if it falls below 80 years.

If your lease is between 80 to 100 years, you should consider extending it as the cost to extend before it becomes a short lease will be more favourable.

— You will be entitled to acquire a newly extended lease in substitution for your existing lease

— The extended lease will be for a term expiring 90 years after the end of the current lease

— Your rent for your extended lease will be zero or you will not pay any rent on your new extended lease.

— Broadly, the lease will otherwise be on the same terms as the existing lease.

Item deThe price or premium to be paid for the new lease will be the aggregate of:

— The diminution in value of the landlord’s interest in the flat, consequent on the grant of the extended lease; being the

— The capitalised value of the landlord’s ground rent. The value of the landlord’s reversion (this is the near-freehold vacant possession value today, deferred for the unexpired lease term)

— 50% of the marriage value (the additional value released by the tenant’s ability to merge the extended lease with the existing lease) must be paid to the landlord, although the marriage value will be deemed to be nil if the existing lease has an unexpired term of more than 80 years at the date of the claim;

— Compensation for loss in value of other property owned by the freeholder, including development value. In addition to the price and the tenant’s own legal costs and valuation fees, you will also be required to reimburse the freeholder for their legal costs and valuation fees.

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In many cases, extending a lease involves legal documentation and negotiations with the landlord or freeholder, which can be complex and require legal expertise.

Extending a lease often involves negotiations with the landlord or freeholder regarding terms such as lease length, ground rent, and any other conditions. A solicitor can represent your interests and negotiate on your behalf.

Extending a lease typically involves drafting legal documents such as a lease extension agreement. A solicitor can ensure that these documents accurately reflect the terms agreed upon and protect your rights.

A solicitor can also provide you with legal advice regarding your rights and obligations under the lease, as well as any potential implications of extending the lease.

Item— At the outset of the process, it is important that you instruct a properly qualified surveyor and solicitor with experience in the field of enfranchisement

— If necessary, your solicitor may serve a preliminary notice to obtain information from the Landlord

— Your surveyor will inspect the flat and undertake a valuation in order to determine the premium payable

— Thereafter, your solicitor serves the tenants’ notice of claim

— The landlord is likely to respond with a procedural notice requiring payment of a deposit (equal to 10% of the premium being offered) and asking the tenant to deduce title

— The landlord will instruct his surveyor to inspect the flat and undertake a valuation in order to determine the Premium on behalf of the freeholder

— Within the period specified in the tenant’s notice, the landlord must serve his counter-notice. First and foremost, this must state whether or not the claim is admitted

— If the claim is admitted, then the counter-notice must state, amongst other things: which of the proposals contained in the tenant’s notice are acceptable or not and the landlord’s counter-proposals — particularly the premium

— Once the counter-notice is received, both sides’ surveyors will aim to negotiate a settlement for the premium, which is agreeable to both leaseholders and freeholder

— If any terms of acquisition (including the price) remain in dispute after two months following the date of the counter-notice, then either party can apply to the First Tier Tribunal for the matter in dispute to be determined.

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A surveyor ( Olden Property) will determine how much the price (premium) should be for you to extend your lease.

A valuation will let you know if you can realistically afford the lease extension before beginning the process of any negotiations.

The freeholder may also wish to have their own valuation, which will be at your cost. They do not need to disclose the valuation amount so, having your own will help you make sure you are paying the correct price.

If you enter the six-month statutory negotiation, Olden Property can conduct the price negotiation on your behalf. As the valuer, we are best placed to do this successfully.

The method of valuation depends on the type of property and the purpose of the valuation. Common valuation techniques used to establish a market value include the comparison method (comparing similar properties or a rate per square metre), income approach (capitalised current or future rental income), cost basis (based on the cost to replace or reproduce the property) or the less common profits method description

A Redbook Valuation can only be undertaken by a chartered surveyor registered with the Royal Institution of Chartered Surveyors (RICS). Olden Property is registered with RICS. Where instructed our valuations are undertaken to the requirements set out in the current edition of the RICS ‘Red Book’ valuation standards, rules and governance. Tom Olden is a chartered surveyor and registered valuer with extensive expertise, knowledge and experience, which can be tailored to your specific requirementription

It all depends on the type of valuation. Olden Property undertakes valuations of both commercial and residential property for various purposes including but not limited to market valuations, valuations for capital gains tax purposes, compulsory purchase and leasehold reform. Prices may vary depending on factors specific to each valuation assignment and the complexity of each case. Please get in touch to find out more and we will provide a quote on the same day. description