Compulsory purchase order for common good but poses difficulty for farms

By Karen Walsh

A compulsory purchase order (CPO) is the name of a notice received by a landowner stating that their land or property is going to be compulsorily purchased by a State Agency.

The CPO procedure was designed to serve the common good.

Unfortunately, the interests of landowners, particularly farmers, may be adversely affected by a compulsory purchase order.

The process involved with CPOs is complicated, and different rules apply to different schemes.

It is important to seek independent legal advice if your land is the subject of a CPO.

In order for a CPO to be made correctly, a notice must be served in the prescribed form on the owners, occupiers and lessees of the land.

This is set out in the Housing Act 1966.

The notice must describe the effect of the order and the time within which objections can be made, as well as the manner in which objections can be made.

The next step for the local authority is the confirmation of the CPO.

The local authority can confirm a CPO where there is no valid subsisting objection (as outlined in the Planning and Development Act 2000).

In practice this means that for the local authority to confirm the CPO, it is necessary that:

  • There have been no objections received within the relevant timeframe by the local authority or by An Bord Pleanála;
  • Any objections that were made have been withdrawn, or An Bord Pleanála is of the opinion that any objection received relates to matters that can be dealt with by an arbitrator.

If these conditions are not satisfied, the CPO must be confirmed by An Bord Pleanála before it has effect.

The local authority must satisfy An Bord Pleanála that the compulsory purchase of property is necessary for the common good, as established by the case of Clinton v An Bord Pleanála (No. 2) [2007] 4 IR 701.

The next step in the CPO process is compensation.

The compensation for a landowner whose land is the subject of a CPO is highly important, especially for farmers who will potentially have to buy land that is far from the rest of their land in order to continue farming.

The landowner is entitled to the market value of his land at the date of the notice to treat.

These farmers in Co Monaghan protested against inspection of their lands with a view to compulsory purchase orders for road-building. CPOs can reduce the value of retained farmland, just one of the factors complicating agreement on compensation. Picture: Kevin Clancy/ViewPoint

The market value can be based either on the existing use value of the land or its development value, whichever is the greater.

Where existing use value is being claimed, the landowner may be entitled to compensation for disturbance and severance.

It can arise also that the completed development has a negative effect on the value of the neighbouring land that is being retained by you.

If so, compensation for this (which is known as injurious affection) may also form part of the claim.

Another possibility to consider is that the acquiring authority may also purchase the retained land.

Development value can be claimed only where development potential can be proven to exist.

Often, such claims present enormous difficulties and confusion.

The legislation states that the compensation claim must be assessed in “the no-scheme world”.

In other words, disregarding the fact that there is a new road to be built, would the land still have development potential irrespective of the new roadway?

If so, then development potential can be claimed.

Theoretically, the landowner should be no worse off and no better off after their land is acquired by CPO.

This is perhaps unrealistic in the farming context, because to replace the land acquired will be difficult, after the CPO essentially reduces the size of the overall holding, and the farmer may have to purchase lands at another location not proximate to the retained lands and farm buildings.

If compensation cannot be agreed, there is a possibility that it can be referred to arbitration.

This should only be used as a last resort, as the costs of arbitration are at the discretion of the arbitrator, and may be awarded against either party.

It is advisable to take legal advice in respect of all available options, even if a landowner does not wish to object to the proposed CPO.

It is important that the landowner has a full understanding of the process and the implications involved.

Karen Walsh, from a farming background, is a solicitor practicing in Walsh & Partners, Solicitors, 17, South Mall, Cork (021-4270200), and author of ‘Farming and the Law’. Walsh & Partners also specialises in personal injury claims, conveyancing, probate and family law.



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