Exercise of CPO Powers

Use for Another Purpose

Under the 2000 Act reforms, land which is vested in a local authority for its functions under any enactment may be appropriated for any other statutory purposes.  Where land is vested in a local authority by means of compulsory acquisition under an enactment, no claim may be made for compensation or additional compensation, nor may the acquisition be challenged on account of such appropriation.

Where land is acquired or appropriated, the local authority may sell, lease or exchange it, subject to such conditions as it sees fits, where it no longer requires the land.  This may be done to secure the best use of that land. The consent of the Minister is required for any such sales. The property may be leased or exchanged.  The sale, lease or exchange must be on the best terms obtainable.  The sale proceeds are not ring-fenced.

The local authority may for the purpose of any of its functions, including the implementation of the development plan or housing strategy, acquire land temporarily or permanently, by agreement or compulsorily.  It may acquire easements, wayleaves and other rights or any strata or substrata of lands.  It may restrict or interfere with any such easements.

Time limits for  Acquisition Powers

Within 12 weeks of the order being confirmed, notification of confirmation should be served on certain relevant parties and the decision on the order must be and published.  It becomes operative, three weeks after publication and notification.

Under the Lands Clauses Consolidation Act, the Authority must exercise its acquisition powers within three years from the coming into operation of the Compulsory Purchase Order. Thus, if the Authority does not serve a Notice to Treat within 3 years from the Compulsory Purchase Order becoming operative, that Compulsory Purchase Order falls down – and the Authority must start afresh.

Under the reformed 200o Act, within 18 months of the compulsory purchase order becoming operative, a notice to treat must be served on persons affected. The notice to treat is the exercise of the compulsory purchase powers.

It is to be served on every owner, occupier and lessee of land (except tenants from month to month or less) stating that the authority is willing to treat for the purchase of his interest in the land within a certain period of (being not less than one month).

Notice to Treat

Once the Compulsory Purchase Order becomes operative the Authority can start on the next step in the process – the Notice to Treat.

The Authority must serve a notice on the Owner stating that they are ‘willing to treat for the purchase’ and requiring the Owner to state his interest/title in the land and the compensation claimed (broken down into separate amounts and showing how each amount is made up) within a  specified time – which must be at least a month.

The Authority then has its last chance to back away from the acquisition – provided it does so by withdrawing the Notice to Treat within 6 weeks from receipt of the claim for compensation.

A Notice to Treat is in effect a formal commitment by the Authority to proceed with the acquisition – which it is not obliged to do until the Notice to Treat is served.

Response of Owners

The parties served are requested to state the nature of their interest in the land and give particulars of the compensation which they claim.  If the authority requires, they must distinguish between the separate classes or heads of compensation as specified in the notice and set out how each is calculated. The owner on whom a notice to treat is served excludes a mortgagee.

A person occupying as a licence holder (by permission) would not generally have sufficient interest in the property in order to be entitled to compensation. Persons who have easements and the benefit of covenants affecting the land are not entitled to a notice to treat.  If, however, their easements are interfered with, or covenants for their benefit are broken, they acquire rights to compensation at that point.

Once a notice to treat is served on the landowners and on others with an interest in the land, the valuation may be agreed or referred to arbitration. The notice specifies the period during which a claim may be made. The local authority may withdraw the notice to treat within six weeks of land owner’s claim. It is liable in these circumstances, for loss and expense incurred during that period.

Effect of Notice; Possession

The local authority is entitled to enter into possession of the property, notwithstanding that the compensation monies have not been agreed, determined or paid. This commonly occurs. Interest is payable on compensation monies, at a statutorily fixed rate, which is backdated to the service of the notice to treat.

The authority may enter upon the land, prior to the transfer of land and indeed prior to the payment or determination of compensation.  Interest is payable at the local loan funds rate.

The authority may if it is urgently necessary that the acquisition be completed, proceed by a vesting order. This vests title to the land in the authority, without a deed by the landowners and others with an interest in the and.  A vesting order is registrable in the Land Registry.

Where possession of land is refused, the authority may issue a warrant to the sheriff to require him to deliver possession of the property.  This must be executed by the sheriff.

Effect of Notice; Acquisition

The service of Notice to Treat confers the right to acquire the land on payment of the proper compensation.  Service of the Notice to Treat does not constitute a contract, but it creates a relationship which ripens into an enforceable contract when the compensation is agreed or assessed by the Arbitrator.

The service of the notice to treat obliges the local authority to purchase and the owner to surrender the property, subject to the above right of withdrawal.  It does not pass ownership by itself.  Commonly, there will be a transfer, with or without a prior contract,  which transfers title to the land, if the compensation is agreed without resort to arbitration, or following the determination of the price in arbitration.

The service of the notice to treat fixes the date for valuation of the property for acquisition purposes.  The market value at the date of service of the notice determines the level of compensation. Interest is based on this sum. The rise or fall in land values after that date is ignored.  This may work to the landowner’s advantage or disadvantage.

The service of the notice to treat does not necessarily prevent the person affected from using or dealing with the land.  However, he must not do so in a way that obstructs or increases the burden on the authority.  The value of any improvements to buildings or land, made after the date of the notice of the treat is disregarded if the improvement or alteration was not reasonably necessary or was carried out with a view to increasing the level compensation.

The date of service of the Notice to Treat is the valuation date for the land. A significant delay between service of Notice to Treat and the fixing of compensation may work unfairly in times of increasing property prices and depreciation of the value of money.

Costs and Expenses

The general rule is that the authority will not compensate the owner for steps taken by him prior to the service of the Notice to Treat, for example, legal advice or expenses involved in getting another Property.

The Irish Courts have allowed pre Notice to Treat expenses which met the following criteria;

• steps taken by the owner in mitigation of loss which is clearly referable to an anticipated Notice to Treat, and it is possible to show that an inevitable loss consequent on the Notice to Treat had been avoided;
• the steps taken, while not obligatory, were reasonable and prudent and had not been taken for a collateral purpose;
• the losses thus compensated would not be more than the losses which the Owner would have incurred had he waited for the Notice to Treat before moving.

Also, see also under the heading ‘Disturbance’.

The service of the Notice to Treat is a prerequisite to the Authority entering possession under the Housing Act power and a prerequisite of the arbitration process.

Power to Enter

After service of Notice to Treat, the Authority and take possession of and use it as may be specified without the prior consent of the Owner.

The Housing Act 1966 empowers the Authority once its Compulsory Purchase Order has been confirmed and it has served a Notice to Treat, on giving at least 14 days written notice, to enter possession of the land without having first paid the compensation – but on terns that Authority shall pay interest upon such compensation from the date of entry when the compensation is eventually agreed or assessed

The rules provide that the rate of interest is the rate at which the Authority on the date of such entry could borrow from the ‘local funds loan’ i.e. from central funds. The rate is fixed at the date of entry.

If possession is refused, the Authority can issue a warrant to the sheriff under the Land Clauses Consolidation Act, 1845 who will secure possession.

If the acquisition is by agreement and not on foot of a Compulsory Purchase Order the Authority cannot merely enter and take possession without first paying or agreeing on compensation.

After the Authority has gone into possession, if the conveyance of title does not take place within 6 months, the Authority can unilaterally acquire title.