Part VII      

Supplementary provisions

Introduction

                    7.1             In this Part we discuss certain supplementary issues which arise under either procedure (notice to treat or vesting declaration):

                                            (1)             Limitation;

                                            (2)             Unauthorised entry and omitted interests;

                                            (3)             Refusal to give possession;

                                            (4)             Distress;

                                            (5)             Payments into and out of Court;

                                            (6)             Costs of completion; and

                                            (7)             Local land charges.

(1)  Limitation

The existing law

                    7.2             The Limitation Act 1980 (“The Limitation Act”) establishes the general rules governing time limits for commencement of legal proceedings. The Act does not deal specifically with claims for compensation on compulsory purchase.

                    7.3             In relation to the vesting declaration procedure, section 10(3) of the Vesting Declarations Act imposes a time limit of 6 years for a reference to the Lands Tribunal, running from the date at which the claimant or his predecessor “first knew, or could reasonably be expected to have known” of the vesting of title in the authority. Since the Lands Tribunal has exclusive jurisdiction in relation to the assessment of compensation,[1] this provision has the effect, after the defined period, of relieving the authority of its obligation to pay compensation altogether.[2]

                    7.4             There is no equivalent provision in the statutes relating to the notice to treat procedure. As has been explained, under that procedure following service of notice to treat the authority may serve a notice of entry, which gives the right to take possession (but not title to the land) in advance of the assessment of compensation. The Court of Appeal has recently held, in Hillingdon London Borough Council v ARC Ltd,[3] that a claim to compensation, following notice to treat and entry, is subject to a limitation period of six years from the date of entry, under section 9 of the Limitation Act.[4]

                    7.5             The Court in that case was not concerned with the application of the Limitation Act, under the notice to treat procedure, to enforcement of rights following the agreement or determination of compensation. As has been seen, at that point there is the equivalent of a specifically enforceable contract for the sale of the land. It seems that an action for recovery of such compensation is subject to the ordinary 12 year time limit, applicable to actions to recover the proceeds of the sale of land.[5]

                    7.6             It is less clear whether the same limit applies where compensation has been paid into court under the deed poll procedure, for example where the owner cannot be traced. Section 29 of the 1976 Act provides that, 12 years after payment-in, the authority may apply for unclaimed compensation in court to be paid to the authority.[6] However, this is not final. A person, who would previously have been entitled to payment out, may still apply to the Court, and the Court may order the authority to pay such sum as the Court considers just.[7] Section 29 applies only to local authorities.

                    7.7             As discussed in the Compensation Report, other rights to compensation are given by the 1973 Act. In general, it may be assumed, such claims are to be subject to the ordinary 6 year time limit applied in the Hillingdon case. In some cases, the Act specifies dates from which such claims are to be treated as accruing for the purposes of the Limitation Act.[8]

Law Commission Report on the Law of Limitations

                    7.8             In 2001, the Law Commission published a final report (with draft Bill) proposing reform of the law of limitations.[9] In general we recommended replacing the present time limits with a “core regime”: based on a “primary limitation period” of 3 years, running from the date when the claimant knows or ought reasonably to know of the facts giving rise to the claim; and a “long-stop limitation period” of 10 years from the accrual of the cause of action.[10] Claims to recover the proceeds of the sale of land would not be subject to the “primary” period, but would be subject to the “long-stop” period of 10 years from the date when the vendor became entitled to recover the proceeds.[11] 

                    7.9             The report records consultation responses[12] relating to the application of the law to land compensation:

                                            (1)             The Royal Institute of Chartered Surveyors had proposed that the 6 year limit applied to vesting declarations should be adapted for the notice to treat procedure, by treating the vesting date under that Act as embracing the date of entry. This would mean that the 6 year time limit for reference to the Lands Tribunal would run, not (as in Hillingdon) from the date of entry itself, but from the date when the claimant became aware (or should reasonably have become) of entry.

                                            (2)             The Holborn Law Society proposed that the limitation period for the reference should be extended to equate with the period for recovery of land or of money secured on land. They commented:

It is difficult to see how the acquiring authority could be prejudiced by a long limitation period.  Section 9 of the Compulsory Purchase Act 1965 is there to provide for the problem of the inactive or untraceable owner.  The section gives the authority power to vest the property in itself by deed poll and pay the compensation money into court.  Thereupon the owner’s rights against the authority cease, and there is no limitation at all on the time within which the owner may apply for payment out of court.  We see no attraction in a limitation period whose effect is to allow an authority to choose not to pay into court in the hope of enjoying a windfall at the expense of the owner whose claim may soon become statute-barred.

                7.10             The Law Commission did not make any substantive recommendations for reforming the law in this area, pending the completion of the present project. It was recommended that the core regime should not apply where there were specific statutory periods, such as under the vesting declaration procedure.[13] However, the draft Bill includes provisions to apply the core regime to the various compensation rights under the 1973 Act.[14]

 Proposals

                7.11             The present project offers an opportunity to clarify and rationalise the application of the law of limitations in this area (whether under the existing law, or under our proposed “core regime”, if and when it is implemented.) As the above summary shows, there are four different periods under the present law:

                                            (1)             For reference to Lands Tribunal:

                                                                   (a)              Notice to treat procedure: 6 years from the date of entry until reference to the Lands Tribunal;[15] and

                                                                   (b)              Vesting declaration procedure: 6 years from the date of knowledge (or presumed knowledge)[16] of vesting;[17]

                                            (2)             Following settlement of amount of compensation: 12 years for action to recover compensation;[18] and

                                            (3)             Following payment-in: right of authority after 12 years to apply for repayment, subject to court’s power, subsequently, to order payment of “just” amount to claimant.[19]

                7.12             It is necessary to consider the position for the future, on the respective assumptions (a) of no change to the general law, and (b) of implementation of the “core regime” as recommended by the Law Commission.

(a) No change to general law

                7.13             We see force in the comments of both respondents cited above. It seems anomalous that there should be a specific time limit under one implementation procedure, but not under the other. Furthermore, if the date of knowledge is the appropriate starting-date for vesting declaration, it should also apply under the notice to treat procedure. On the other hand, it is open to question whether there is need for any limit, since the authority can protect itself at any time after service of notice to treat, or vesting declaration, by referring the matter to the Lands Tribunal, and paying the compensation into court.

                7.14             The choice therefore, in our view, is between:

                                            (1)             Under both procedures, a 6 year time limit for reference to the Tribunal, running from the date of knowledge (or presumed knowledge) of taking of possession or vesting of the land;

                                            (2)             No time limit under either procedure.

On balance, we provisionally favour the former, in the interests of finality. Provided the time runs from the date when the claimant had, or should have had, knowledge, there should be no risk of serious injustice. We acknowledge, however, that there are arguments for having no time limit. In view of the other procedures available to the authority, and since the authority is acting by compulsion, it might be considered reasonable for it to bear the primary responsibility for completing the process of acquisition, including determination of compensation. Accordingly, we invite views on both alternatives, and their practical implications.

                7.15             With regard to time limits following determination of compensation, a 12 year period seems appropriate, as being consistent with that applying to proceeds of sale of land generally. Although the same logic could be applied to a payment into court, the more generous view reflected in section 29 of the 1976 Act[20] is presumably based on the consideration that in such cases the authority has acted unilaterally, and there may be reasons for the claimant not having acted before. However, if the discretion is to be retained, it should in our view be restricted to cases where there is good reason for the claimant not having applied within the 12 year period, or some other exceptional factor.

(b) Under proposed “core regime”

                7.16             Under the proposed core regime, similar reasoning would apply. Thus, for reference to the Lands Tribunal, the choice in our view would be between

                                            (1)             Under both procedures, application of the core regime: that is, 3 years from the date of knowledge[21] of the taking of possession or entry, with a “long-stop” period of 10 years; and

                                            (2)             No time limit under either procedure.

For the reasons given above we would adopt the former.

                7.17             Following determination of compensation, we would apply the same approach as proposed above under the present law, but with the substitution (for 12 years) of 10 years, as recommended by the Law Commission in relation to actions to recover the proceeds of sale.

Proposal 12 – Limitation periods

                                           (1)             In respect of compensation for compulsory purchase, there should be time limits for reference to the Lands Tribunal, which should apply equally to the notice to treat and vesting declaration procedures.

The appropriate limits should be:

(i) (under the present law) 6 years from the date when the claimant knew or ought reasonably to have known of the taking of possession or vesting; or

(ii)(if the Law Commission’s recommendations are adopted) in accordance with the “core regime”: that is, 3 years from the date when the claimant knew or ought reasonably to have known of the taking of possession or vesting, with a “long-stop” period of 10 years;

                                           (2)             The time limit for an action to recover compensation following determination by the Tribunal or agreement of compensation will be 12 years (or 10 years under the Law Commission’s recommendations);

                                           (3)             Following payment-in, the authority may apply after 12 years (or 10 years under the Law Commission’s recommendations) for repayment, subject to the power of the court subsequently to order such payment to the claimant as may be just, if the court is satisfied that there are good reasons for application not having been made within 12 years (or 10 years), or other exceptional circumstances.

Consultation issue (T) – Limitation periods

Do consultees agree

(1)That there should be time limits for reference to the Lands Tribunal of disputes in relation to compensation for compulsory purchase? If not, why not?

(2) That the time limits should be the same under both procedures (notice to treat and vesting declaration), and should be as proposed above? If not, what rules should apply?

(2) Unauthorised entry and Omitted interests

Existing law

                7.18             An authority which enters land without going through the correct procedures may be subject to ordinary civil remedies for trespass.[22]

                7.19             In addition, section 12 of the 1965 Act provides that if the authority or its contractors wilfully enter land subject to compulsory purchase, other than in accordance with section 11, they shall “forfeit the sum of £10” in addition to the amount of any damage, such sums to be “recoverable summarily as a civil debt”.[23]

                7.20             Section 22 of the 1965 Act provides a means to remedy the position in the case of omitted interests. It provides that if the acquiring authority has entered land subject to compulsory purchase and:

it appears that they have through mistake or inadvertence failed or omitted duly to purchase or to pay compensation for any estate, right or interest in or charge affecting that land

they may remain in possession of that land,[24] provided that they purchase or pay compensation for that omitted interest within six months from the date when the authority had notice of the interest, or it was legally established.[25] Compensation is assessed as at the time when the authority took possession, and without regard to any subsequent works by the authority.[26]

                7.21             Apart from this remedy, the authority can apparently regularise the position, by serving a notice to treat, even after entry. Thus, in Cohen v Haringey LBC[27] the acquiring authority had gone into possession of a property without having served notice to treat on the mortgagee. The Court of Appeal held that the authority could still regularise the position by serving notice to treat and notice of entry, with the effect that lawful possession would begin 14 days later.[28] This will not assist the authority if the time for service of notice to treat (3 years from the operative date under the present law[29]) has expired. Thus, where a notice to treat was served on a mortgagee more than three years after the operative date, and more than six months after the mortgagee had established title, the Lands Tribunal held that it had no jurisdiction in the matter.[30]

Discussion

                7.22             Section 12 seems to serve no useful purpose in modern circumstances. The amount of the “forfeit” is derisory, and, where damage is suffered, there seems no reason why a claim should not be brought by civil action in the ordinary way. We suggest that section 12 is repealed.

                7.23             Section 22 provides a means to rectify the omission, by payment of compensation. However, it is not without difficulty. In particular, the time limit of 6 months takes no account of the time that may be needed to settle compensation, which may take longer. Furthermore, it does not apply where the authority was aware of the interests, but failed to serve the necessary notices.[31]

                7.24             However, the decision of the Court of Appeal in Cohen shows that there is already a wider power to correct omissions than that provided by section 22. It is open to question therefore whether any further provision is needed.

                7.25             On the other hand, there is the important difference, from the point of view of compensation, that, whereas under section 22 there is specific provision to backdate the assessment of compensation to the time of entry, under the Cohen procedure there is no such provision for backdating the valuation date. It seems that the valuation date will be treated as the date of notional entry following the service of the valid notice to treat and notice of entry. That may cause problems if works have been carried out since the actual entry, since, arguably, they may have to be taken into account in assessing compensation.

                7.26             It would be possible to enact a new provision, to replace section 22 and the Cohen procedure, which would give a general power to rectify accidental omissions retrospectively within a defined time limit (say 18 months from the date of possession), and would provide for compensation to be assessed by reference to the date of the original entry.  We are not aware, however, that the present law causes significant problems in practice. Accordingly, we make no proposal but invite views.

Consultation issue (U) – Unauthorised entry and omitted interests

(1) Do consultees agree that section 12 of the 1965 Act should be repealed?

(2) Are the present rules for rectifying accidental omissions (1965 Act s 22, and the principle in the Cohen case) adequate for the purpose? If not, how should they be amended or replaced?

(3) Refusal to give possession

                7.27             Where an owner or occupier refuses to give possession, the authority can issue a warrant to the Sheriff to deliver possession.[32] No application to the court is required. There is provision for the recovery of the Sheriff’s costs out of compensation or by distress and sale of goods on premises. The costs may be deducted from the compensation, if any, payable to the person refusing to give possession. There is also provision for the costs to be levied by distress.[33]

                7.28             We understand that this is regarded as a useful procedure. The lack of any requirement for a court order seems surprising at first sight. However, by this stage the authority has obtained the right to possession, by a procedure which provided an opportunity for a hearing, which satisfies the requirements of the Human Rights Act 1998.[34] The main concern may be the lack of any control over costs.[35] We suggest that the authority should bear the sheriff’s costs, and have the right to deduct them from compensation, but subject to the possibility of review of their reasonableness by the Tribunal. We see no reason why there needs to be provision for levying by distress.

                7.29             The Government is currently conducting a review of civil enforcement procedures generally.[36] The results of that review will need to borne in mind in drafting any replacement. Subject to that point, we propose that the remedy should be restated in more modern form along the following lines.

Proposal 13 – Refusal of entry

                                           (1)             If the acquiring authority are authorised to enter or take possession of any land, and the owner or occupier of any of that land, or any other person, refuses to give up possession of it, or hinders the acquiring authority from entering on or taking possession of it, the acquiring authority may issue their warrant to the sheriff to deliver possession of it to the person appointed in the warrant to receive it.

                                           (2)             The sheriff’s costs shall be paid by the authority, which (subject to (3)) may recover them from the person refusing to give possession, and may deduct them from the compensation, if any, payable to that person.

                                           (3)             A person liable to pay such costs may (subject to procedural rules) require the reasonableness of the amount to be reviewed by the Lands Tribunal.

Consultation issue (V) – Refusal of entry

(1) Do consultees agree with our provisional view that the present warrant-based enforcement route should be restated in modern form?

(2) Does it give rise to any practical problems?

(3) Do they agree that the sheriff's costs should be borne in the first instance by the authority?

(4) Distress

                7.30             Section 29 of the 1965 Act states that any distress under this Act is not deemed to be unlawful, nor is the person making the distress deemed to be a trespasser. However, any person “aggrieved by any defect or irregularity may recover full satisfaction for the special damage in civil proceedings”.

                7.31             We see no reason for this special provision for levying by distress in the modern law, and we propose that this provision be repealed.

Proposal 14 – Distress

That 1965 Act, s 29 should be repealed and not replaced.

Consultation issue (W) - Distress

Do consultees agree with our view that section 29 today serves no useful purpose?

(5) Payments into and out of Court

Payments into court

                7.32             Sections 25 and 26 of the 1965 Act make general provision for payment of compensation into court, where required under other provisions in the Act. They reproduce the substance of provisions originally in the 1845 Act.[37] Payment-in was a much more frequent occurrence under the 1845 Act, because it was a normal pre-requisite for taking possession, where compensation could not be agreed.[38] Under modern procedures, an authority is entitled to enter (under the notice to treat or vesting declaration procedures) before compensation is assessed or paid.[39]

                7.33             The circumstances in which payment-in may arise under the 1965 Act are:

                                            (1)             Where the landowner refuses to convey or make good title;[40]

                                            (2)             Where a mortgagee of subject land refuses to convey, or to make good title[41];

                                            (3)             Where the acquired land is subject to a rentcharge and the person entitled fails to release or to make good title[42];

                                            (4)             Where the acquisition is from a landowner who is under a legal disability[43];

                                            (5)             Where the alternative means for obtaining entry is used[44]; or

                                            (6)             Where payment is made in respect of common land but there is not a committee of commoners[45].

                7.34             General provision for payment into court and the administration of such funds is made by the Administration of Justice Act 1982, Part VI,[46] and by the Court Funds Rules 1987. Section 25 of the 1965 Act makes specific provision for two matters in relation to compensation:

                                            (1)             Where the payment was “in respect of any lease, or any estate in land less than the whole fee simple, or of any reversion dependent on any such lease or estate”, any interested person may apply to the court for an order as to  investment or accumulation or payment out so as to preserve the equivalent of the benefit they would have had in the original land-based interest.[47] This means that the court can fairly apportion between interested parties, for limited estates, sums paid into court and the income generated; and

                                            (2)             Any person who has only a possessory title (and no documentary proof of ownership) is entitled to apply for payment out of court of moneys if no other claim is made for them.[48]  

Costs in respect of money paid into court

                7.35             Section 26 of the 1965 Act reproduces from the 1845 Act a complex provision for the payment of costs related to the administration of compensation paid into court, for example costs of the purchase of the land and investment of compensation, payment of dividends, and payment out of court.[49] As the editor of the Compulsory Purchase Encyclopaedia says:

The corresponding section of the Act of 1845 (s 80) was in former times of considerable importance. Two facts, however, contribute to render this section a dead letter today. First, it is rarely necessary to resort to payment into court, since the disabilities which rendered such payment necessary (see now Schedule 1 para 6) have been largely removed, and the authority can enter upon land by virtue of s11(1), without paying money into court. Secondly, even in the cases excepted by this section, eg. cases where there has been a wilful refusal to make title, the court has a discretion as to costs under the Judicature Act 1925, s50.[50]

Payments out of court

                7.36             Where compensation money has been paid into court any interested party may apply to the court for payment out. Applications are dealt with in the Chancery Division, and subject to approval by a Chancery Master.[51]

                7.37             Payment out under modern procedures  is governed by the following provisions:

                                            (1)             Section 9 of the 1965 Act deals with the position where a land or interest owner fails to make title or to convey. Section 9(5) enables any person, who believes he is entitled, to make a claim. The court may order distribution “according to the respective estates, titles or interests of the claimants” and make “such other order as [it] thinks fit”;

                                            (2)             Schedule 2 provides for payment into court of compensation determined for land owned by absent or untraced owners following service of notice to treat.[52] Distribution may be ordered by the court, on the application of any person claiming, “according to the respective estates, titles or interests of the claimants”, and likewise may make any other order as it thinks fit;[53] and

                                            (3)             Schedule 3 (which is now obsolete) sets out an alternative procedure for obtaining entry, and that procedure makes provision for payment into and out of court.

                7.38               In addition, special provision relates to local authorities where money has not been paid out of court for more than 12 years after payment-in. Where an authority applies for payment out in these circumstances the court may so order, but it may later order that the whole or part be transferred to another person if it then considers that to be just.[54]

Discussion

                7.39             The provisions governing payments-in are derived from the 1845 Act, at a time when they were a much more significant element in the procedure for obtaining entry.[55] Under modern procedures, they are likely to arise only in cases where owners cannot be found, or are unwilling to deal with the authority, and it is necessary therefore to proceed by deed poll. We have already made proposals for a simplified “deed poll procedure”,[56] which would include a general power for the High Court to make “such order as it thinks fit” in relation to distribution of such money. Our provisional view is that this, combined with the general provisions of the Administration of Justice Act 1982 for managing funds in court, would provide a sufficient statutory basis for the compulsory purchases procedures, without the need for the detailed provisions of section 25. Similarly, section 26 could be replaced by a simple provision providing that the authority will be responsible for any costs incurred in connection with payments-in, save as the court may otherwise order.

                7.40             We have already discussed and invited comment on a proposal for amending, and extending to all authorities, the provision of the 1976 Act, section 29, relating to payment out after 12 years.[57]

Proposal 15 – Payments into court

Sections 25 and 26 of the 1965 Act should be replaced by a simple provision (a) giving the court power, subject to rules of court, to make orders, in relation to money paid into court under the Act, for the distribution of the money in accordance with the respective interests of the claimants (and to make such incidental orders as it thinks fit); and (b) providing that costs incurred in connection with such payments-in shall be paid by the authority, save as the court otherwise orders.[58] 

Consultation issue (X) – Payments into and out of court

(1) Are consultees aware of any practical problems arising from the provisions of the 1965 Act for payments into and out of court? If so, how should they be addressed?

(2) Do they agree that sections 25 and 26 should be replaced by a simpler provision as proposed above?

(6) Costs of completion

                7.41             The 1965 Act, section 23 makes detailed provision for the costs of completing the purchase:

(1) The costs of all conveyances of the land subject to compulsory purchase shall be borne by the acquiring authority. 

 (2) The costs shall include all charges and expenses, whether incurred on the part of the seller or on the part of the purchaser,— 

(a) of all conveyances and assurances of any of the land, and of any outstanding terms or interests in the land, and 

(b) of deducing, evidencing and verifying the title to the land, terms or interests, and 

(c) of making out and furnishing such abstracts and attested copies as the acquiring authority may require, 

and all other reasonable expenses incident to the investigation, deduction and verification of the title. 

 (3)   If the acquiring authority and the person entitled to any such costs do not agree as to the amount of the costs, the costs shall be taxed by a Master of the Supreme Court on an order of the court obtained by either of the parties. 

 (4)   The acquiring authority shall pay what the Master certifies to be due in respect of the costs to the person entitled and, in default, that amount may be recovered in the same way as any other costs payable under an order of the Supreme Court. 

 (5) The expense of taxing the costs shall be borne by the acquiring authority unless on the taxation one-sixth of the amount of the costs is disallowed, and in that case the costs of the taxation shall be borne by the party whose costs have been taxed; and the amount thereof shall be ascertained by the Master and deducted by him accordingly in his certificate of taxation. 

                7.42             We do not think it is necessary for this to be spelt out in such detail. In principle the authority should be required to bear all the costs connected with purchase. For example, sub-section (5), which requires the claimant to bear the costs of taxation, if one sixth or more is disallowed, seems unnecessarily prescriptive. There could be a simple requirement for the authority to pay to those interested all reasonable costs in connection with the completion of the compulsory purchase (so far as not covered by any other provisions.[59]

                7.43             Although there have been suggestions that the task of assessing costs might be given to the Lands Tribunal, it is our provisional view that this task should remain with the High Court, because of its existing expertise in this area.[60] We invite views.

Proposal 16 – Costs of completion

Section 23 should be replaced by a provision that the acquiring authority should pay to those interested all reasonable costs (as assessed by the Costs judge) incurred in connection with the completion of the compulsory purchase (so far as not covered by any other provisions).

Consultation issue (Y) – Costs of completion

 (a) Do consultees agree with this proposal? If not, what practical purpose is served by the detailed rules of section 23?

(b) Should the assessment of such costs be transferred to the Lands Tribunal?

(7) Local land charges

Existing law

Registration of local land charges

                7.44             “Local land charges” are charges or other matters affecting land, falling within the descriptions in section 1 of the Local Land Charges Act 1975.[61] They include various types of restriction, imposed by public authorities, including (for example):

any prohibition of or restriction on the use of land… imposed by a local authority… being a prohibition or restriction binding on successive owners of the land affected.[62]

There is a general category for “any charge or other matter which is expressly made a local land charge by any statutory provision not contained in this section”.[63]

                7.45             Registers of local land charges are maintained by “registering authorities”.[64] The form of the register, and other procedural matters, are governed by rules.[65] Responsibility for registering, or applying for registration, falls on the “originating authority”, that is (generally) the authority by whom the charge is brought into existence or by whom it is enforceable.[66] Searches of the register may be made by members of the public personally (on payment of a fee),[67] or by requisitioning an official search.[68] Where a registered charge is varied or ceases to have effect, the register must be amended accordingly.[69]

                7.46             Generally, registration of any matter is deemed to constitute actual notice to all persons and for all purposes connected with the land affected, as from the date of registration.[70] Failure to register a charge does not generally affect its enforceability.[71] However, there is provision for compensation for loss suffered by a person who has bought land affected by an unregistered local land charge, following a personal search or official search.[72]

Registration of compulsory purchase orders

                7.47             There is no general requirement to register steps in the compulsory purchase process. A compulsory purchase order is not one of the specific categories mentioned in section 1 of the Act. In particular, it is not a “prohibition or restriction on the use of land”,[73] since the making of an order does not in itself restrict the owner’s use of the land. The owner remains free to use it, or deal with it, even following notice to treat, up to the time of possession or vesting.[74] 

                7.48             Of the general procedures considered in this report, the only matter which is expressly subject to registration as a local land charge is a preliminary notice of a general vesting declaration, given under section 3 of the Vesting Declarations Act.[75] The execution of the declaration itself is not registrable. In addition there are two matters relevant to compensation under the 1973 Act:[76]

                                            (1)             Where an authority acquires land for public works and the affected landowner retains land in respect of which he has the right to claim compensation for injurious affection (under section 7 of the 1965 Act);[77]

                                            (2)             Where an advance payment of compensation is to be made under section 52 of the 1973 Act.[78]

                7.49             There are also requirements to register certain particular categories of compulsory purchase order. Thus:-

                                            (1)             The New Towns Act 1981, section 12 provides that a compulsory purchase order under section 11 or 12 of that Act[79] “shall, when operative,[80] be a local land charge”. The entry is in Part 7 (new town charges).[81]

                                            (2)             The Opencast Coal Act 1958 provides that a compulsory rights order under that Act[82] “shall be a local land charge”.[83] It is provided that rules under the Local Land Charges Act 1975 must include provision for cancelling the registration if the order is not confirmed, or is revoked, and for varying it, if the order is amended or varied.[84]

We are not aware of the policy reasons (if any) for making the New Towns order, in contrast to the Opencast Coal order, registrable only from the time when it becomes operative (that is, following confirmation).

                7.50             Although in other cases there is no statutory requirement to register the making of a compulsory purchase order, or any subsequent steps in the procedure, we understand that in practice, at the time of making of a compulsory purchase order, a local authority may add an informal note on the register relating to that fact. Similarly, in practice, authorities may make an informative note on the register at the time of notice to treat and notice of entry. The recent Departmental Guidance Manual goes further and advises authorities to register the making of an order, even though it is not a statutory requirement.[85]

Proposals for change

                7.51             In its Policy Statement DTLR recognised the need for greater openness in the compulsory purchase process. The Statement says that  Government propose to

. . . take steps to help people check the position as it affects their properties, - by providing a formal notification procedure where an order is withdrawn and introducing requirements to register the status of all orders (from the time at which they are made, onwards) as local land charges: . . .[86]

The legislative proposal is to impose a requirement -

for the registration as a local land charge by the acquiring authority, within a specified period, of the making, withdrawal, confirmation/decision to refuse to confirm or cancellation of an order.[87]

Discussion[88]

                7.52             We endorse this approach.[89] We believe that a compulsory purchase order should be registrable as a local land charge from the time when it is made.[90] We do not think the requirement should start only at the time when the order is operative (as under the New Towns Act 1981), since the existence of even the unconfirmed order may have serious implications in practice for a potential purchaser. The rules already contain provision for cancellation or variation of the local land charges register, and so no specific statutory provision seems necessary to deal with withdrawal or non-confirmation.[91]

                7.53             As to whether later stages in the procedure should be subject to specific requirements for registration, as implied by the Policy Statement, a balance needs to be drawn between the need to inform those interested, and the burden on the authority. If it is thought desirable for more information to be available about the status of the order, beyond the simple facts of making, withdrawal or non-confirmation, this could be provided for in the rules. However, we doubt if it is needed. Once an interested party has been alerted to the existence of the order, and has notice of the place where the relevant documents may be inspected, he can find out further details for himself.

                7.54             The key stage, following the making of the order, is the commencement of implementation, whether by service of notice to treat or by serving a preliminary notice of a vesting declaration. As we have noted, the latter is already registrable in its own right.[92] If this is to be retained, as we would propose, it would seem logical to apply the same requirement to the service of a notice to treat. We do not think there is a need for a separate requirement in relation to notice of entry, since (under the current Government proposals[93]) this will follow the notice to treat within a defined timescale, and, again, information can be obtained from the authority.

                7.55             Such statutory requirements can of course be supplemented, as now, by more detailed information by way of informal notes. This should not be a matter for legislation. However, to encourage consistency, it would be helpful if guidance were included in the official circulars or manuals issued by the Department.

                7.56             The consequences of non-registration would remain as at present, both as to deemed notice and compensation.[94] We see no need, in respect of compulsory purchase orders, to alter or add to the provisions of the Local Land Charges Act 1975 in this respect.

Proposal 17 – Local land charges

                                           (1)             The following will be registrable as local land charges for the purpose of the Local Land Charges Act 1975:

                                                                   (a)              Making of the order (or preparation in draft of a ministerial order);

                                                                   (b)              Service of notice to treat in respect of any land under section 5 of the 1965 Act; and

                                                                   (c)              Service of a preliminary notice under section 3 of the Vesting Declarations Act (as now).

                                           (2)             Amendment of the register, to reflect the order or notices being varied or ceasing to have effect, will be governed by the Local Land Charges rules (as now).

                                           (3)             If necessary, Departmental guidance should be given as to informal notes (relating to the status of the order at any time or other matters) to supplement the statutory requirements.

                                           (4)             Failure to register will not invalidate the order or notice, but any person adversely affected by that failure will be entitled to claim compensation for consequential loss suffered in accordance with the Local Land Charges Act 1975, section 10 (as now).

Consultation issue (Z) – Local land charges

(1) Do consultees agree that the definition of local land charges should include the stages in the CPO process set out above?

(2) Do they have any other comments on the above proposal?