Back to basics: acquiring land compulsorily by way of a GVD

Current crises in housing and in town centres have placed greater emphasis on the role that local authorities can and should play in compulsorily acquiring land to promote much needed development, whether to implement local plan policies or to help progress consented schemes. In a series of back-to-basics posts we will discuss the various stages of the compulsory purchase process, from deciding what power to use to the payment of compensation, and the relevance to developers.

This post focuses on the implementation stage and in particular the General Vesting Declaration (“GVD”) process. In this post we seek to answer the following key questions before going on to identify some important points to note:

Who implements the powers?

Compulsory purchase powers in England can be granted either as standalone Compulsory Purchase Orders (“CPOs”) made under a wide range of empowering Acts or as part of secondary legislation, eg Hybrid Acts and Development Consent Orders (“DCOs”). The body that is endowed with the powers depends on the legislation pursuant to which the powers exist. Standalone CPOs are exercised by public bodies, commonly local authorities in order to facilitate a scheme promoted by a private entity. In such a case, the local authority will exercise the compulsory purchase powers on behalf of the private entity in return for an indemnity in respect of its costs.

It should be noted that the standard implementation process is sometimes modified, eg a DCO may tweak the relevant time periods or notice procedures. It is therefore important to check the terms of the empowering CPO or legislation carefully before taking steps to exercise the powers. We summarise below the standard procedure pursuant to a CPO.

What options are available to exercise the powers?

Once a CPO has been confirmed, the land may be acquired by following one of two procedures:

  1. notice to treat; or
  2. GVD.

The notice to treat procedure involves three separate steps: a notice to treat, a notice of entry and a conveyance. The GVD procedure replaces those three steps with one procedure whereby the title in the land vests automatically with the acquiring authority on a specific date known as the “vesting date” (see below). This means that the acquiring authority can obtain title more quickly and in particular without having to settle the amount of compensation prior to the transfer of title. A GVD is also useful where there is some uncertainty over the ownership of all of the land interests because, provided the correct service of notice procedure is followed, the GVD vests all interests in the land.

For these reasons, the GVD procedure is often the preferred route. However, while acquisition of title may take longer to complete under the notice to treat procedure, it may be possible to gain possession and start development earlier than under a GVD.

It is important to consider both options carefully before deciding which route to pursue. It is also vital that the notice and service provisions are adhered to carefully, and to make sure plenty of time has been built into the acquisition schedule to ensure these requirements are completed satisfactorily.

What does the GVD process entail?

The procedure for making a GVD generally involves the acquiring authority including a prescribed statement describing the GVD process and the effect of the GVD in the notice of confirmation of the CPO, and inviting any persons who would be entitled to claim compensation if the GVD was made to give personal information and details of their interest in the land.

Once the prescribed statement has been made, the acquiring authority will make the GVD after the CPO has become operative (normally on the date of publication of the CPO unless it is subject to special parliamentary procedure). A GVD itself must be in the prescribed form as set out in the relevant legislation and must include details of the CPO land.

As soon as possible after making a GVD, the acquiring authority must serve notice of it on every occupier of the land and on every person who gives the acquiring authority information relating to the land following an invitation to do so (as described above).

A period of at least three months from the date on which this notice is served will be specified in the GVD. The land will vest in the acquiring authority the day after the specified date (the “vesting date”), together with the right to enter and take possession of the land. In some circumstances, such as where a counter-notice is served or where the land is subject to a minor tenancy or a long tenancy about to expire, there may be additional notice requirements and the vesting date will be determined following a different process.

When is compensation payable if using the GVD process?

Compensation for land compulsorily acquired by way of GVD is assessed at the vesting date and interest on the compensation also accrues from this date until the date of payment, even if possession is not taken for some time after the vesting date. This differs from the notice to treat procedure where compensation falls to be assessed at the date of entry and taking possession. If the CPO land is being acquired on behalf of a private entity, these costs will likely be incorporated into a CPO Indemnity Agreement so that the private entity will ultimately be liable for these costs (and other associated costs) rather than the acquiring authority.

What are the applicable time limits?

If the CPO became operative on or after 13th July 2016, a GVD cannot be executed after three years beginning with the day on which the CPO became operative. CPO powers can be lost entirely if the GVD has not been executed in time so it is very important to be aware of the relevant time limits that apply.

Points to note

The law and procedures that govern compulsory acquisition are complex. GVDs are amenable to legal challenge, eg if the proper process has not been followed or if the acquiring authority’s purpose for acquiring the land is not within the scope of the CPO. Recent cases have demonstrated that there may be a degree of “wriggle room” where some procedural irregularities have occurred (eg failing to publish notices in the required way), provided that it has not resulted in substantial prejudice. However the courts appear to be taking a stricter approach where the exercise of CPO powers do not fall squarely within the scope of what was originally envisaged by the CPO. Caution must be applied to ensure the GVD is exercised in accordance with the original intention of the CPO.

Author: Julia McKeown, Associate (New Zealand), planning, real estate

For further information please contact:

Julia McKeown
Julia McKeown
Associate (New Zealand), planning, London
+44 20 7466 2321

Charlotte Dyer
Charlotte Dyer
Of counsel, planning, London
+44 20 7466 2275

 

It’ll take a long time to get quicker – how PINS is planning to change the inquiries process (slowly)

On 14 May 2019, the Planning Inspectorate published its Inquiries Review Action Plan to explain how it intends to implement the recommendations of Bridget Rosewell CBE’s Independent Review of Planning Appeal Inquiries. This blog considers what progress has been made and what are the main challenges to full implementation.

The Rosewell Review

The PINS Action Plan

Will it be successful?

The Rosewell Review

Having been involved in a large number of major planning inquiries in recent years, I found myself back in February of this year vigorously nodding my head in agreement with the findings of the Rosewell Independent Review of Planning Appeal Inquiries, in particular “that there is substantial scope to improve the planning inquiry appeal process from start to finish”. I fully agreed with the view that improvements were needed to significantly reduce the time taken to conclude planning inquiries while, crucially, still maintaining the quality of decisions and reports. The 22 recommendations set out in the Rosewell Review were designed to address key failings in the inquiries process, focused on three main areas: better technology, earlier engagement by the parties and shorter inquiry programmes.

However, I also approached the review with a healthy dose of scepticism. Having seen first-hand the immense strain that inquiries place on PINS, on top of all the other workstreams for which they are responsible not least of which being the development consent process, I was rather doubtful about how quickly (if at all) these recommendations could be implemented by PINS so as to have a noticeable and beneficial impact on the process.

The PINS Action Plan

A few months on and PINS has now published its Inquiries Review Action Plan to explain how it intends to implement the recommendations of the Rosewell Review. Overall, the PINS response is positive, praising the Rosewell Review for the practical, common sense nature of the recommendations which promise to lead to much faster decisions and to radically improve the experience of users.

The Action Plan confirms that PINS’ ambition is to be deciding planning appeal inquiries within a 26-week target by June 2020. A table of actions, with clear delivery dates, has been produced showing how each of the 22 recommendations will be implemented. On the issue of resourcing, PINS has recently begun its latest recruitment drive, this time looking to recruit another 20 senior planning inspectors. This follows an inspector recruitment exercise in January of this year, during which 200 interviews were completed, 106 offers made and almost all accepted.

So far so good. However, then come the warnings. The Action Plan notes that a recent pilot of the new system has “underlined the size of the challenge and that there isn’t a quick fix”. Indeed, PINS believes that “a sizable transition period is likely to be needed”. Only five of the recommendations have now gone “live”, one of which is the preparation of the Action Plan itself, with 17 recommendations yet to be implemented. PINS also warns that, for the reforms to have maximum effect, all parties involved with planning inquiries will need to adjust their approach. In other words, there are factors in play that are outside of PINS’ control.

A big sticking point seems to be the creation of a new portal for the submission of inquiry appeals (and publication of inquiry documents) by December 2019. According to the Action Plan, a third-party system is being used as an interim measure for the pilot scheme. However the Government Digital Service, with whom PINS is working to establish the new portal, has ruled out the long-term use of a third-party tool and instead required the development of a strategic portal solution that will be internally owned and managed by PINS. This has led to delays, with funding being an unresolved concern. Rather unfortunately this was Recommendation 1 in the Rosewell Review – has PINS failed at the first hurdle?

Having spoken to people involved in appeals that are part of the current pilot scheme, the feedback seems to be that the inquiries process is indeed significantly quicker. The requirement for appellants to notify local planning authorities 10 days in advance of appeal submission (only guidance but could become fixed in legislation) is an important part of this. However, speed has come at a cost, with rumours of inquiry dates being fixed by PINS when whole teams are on holiday, although PINS claims that “a degree of flexibility” will be allowed “in exceptional circumstances”.

The Action Plan notes that the successful delivery of the Rosewell Review recommendations is likely to mean that inquiries are determined more quickly than hearings, which contradicts the logic that inquiries are supposed to be reserved for the most complex casework. According to the Government’s website, it now takes 43 weeks from appeal validation to decision for a hearing and 41 weeks for an inquiry, which must in part be due to the pilot scheme.

To address this, the Plan identifies that PINS will put extra attention towards hearings to improve their timeliness. Sensibly (in my view) the Action Plan also acknowledges that, alternatively, a better approach might be for the length of time required for a case to be decided not to be determined purely based on which procedure it follows but instead on a new set of published priorities (eg focussing on housing delivery or other key infrastructure) as the key determinant for decision timings.

Will it be successful?

That depends on how you define success. Will PINS hit the 26-week target by June 2020? If they enforce tight, inflexible inquiry programmes then probably yes. Will the new system result in more successful legal challenges in respect of decisions made? Possibly, but as Rosewell herself has argued, that may be a worthwhile price to pay if it means that the appeal process as a whole improves. Rosewell has promised to issue a progress report, jointly with PINS, in September 2019, and a full implementation report in June 2020, exactly two years after her appointment as Chair of the review.

Author: Charlotte Dyer, Of Counsel, Planning, London

For further information please contact:

Charlotte Dyer
Charlotte Dyer
Of Counsel, Planning, London
+44 20 7466 2275

Recommendations from the Rosewell Review – how can planning appeal inquiries be made quicker and better?

A publication that has caught the attention of many in the industry this week is the government-commissioned ‘Independent Review of Planning Appeal Inquiries.’ The review, chaired by economist Bridget Rosewell CBE, was tasked in June last year with assessing how planning appeal inquiries could be made quicker and better. The report makes 22 recommendations aimed at reducing the time it takes to conclude planning inquiries, while maintaining the quality of decisions.

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Real Estate EP5: The future of planning – Matthew White and Ghislaine Halpenny in conversation

British Property Federation (BPF) director of strategy and external affairs, Ghislaine Halpenny, sits down with Matthew White, partner and head of UK planning, to discuss planning, its ever-changing nature and the direction it is taking.

 

Also published on the BPF soundcloud for the BPF Futures network, a networking and development group for junior professionals working in all areas of UK real estate.

For further information please contact:

Matthew White
Matthew White
Partner and Head of UK planning, London
+44 20 7466 2461

Back to Basics: Housing Need and Delivery

 

From 25 January 2019 (although see here for our commentary on the ambiguity surrounding the actual date), local planning authorities must use the new standard methodology for assessing housing need set out in the National Planning Policy Framework published in July 2018 (“NPPF”). As part of our ‘back to basics’ blog series, this blog post explores:

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Affordability, viability and clarity – the impact of valuation on supply of affordable housing

Viability is at the heart of the extent to which private developers can be expected to bridge the gap between demand for and supply of affordable housing. In April this year, in a postscript to his judgment in the case of Parkhurst Road Ltd v Secretary of State for Communities and Local Government and another [2018] EWHC 991 (Admin), Mr Justice Holgate said that “uncertainty on how viability assessment should properly be carried out” is leading to “a proliferation of litigation” and called on the Royal Institution of Chartered Surveyors (RICS) to revisit its 2012 Financial Viability in Planning Guidance. Since then, the revised National Planning Policy Framework (NPPF) has been published together with revised Planning Practice Guidance (PPG) on viability, but a review of the RICS guidance is still ongoing. On 5 October, the Deputy Mayor of London and the Executive Member for Housing & Development at Islington Council wrote a joint open letter to the President of the RICS regarding affordable housing and the 2012 RICS Financial Viability in Planning Guidance. Their letter asks RICS to revisit its guidance, as called for by Holgate J. Continue reading

Affordable Housing Back to Basics: What do the new NPPF and Draft London Plan modifications mean for affordable housing?

This blog post explores how the meaning of affordable housing has evolved following the publication of the revised National Planning Policy Framework (“NPPF”) on 24 July 2018 and the Draft New London Plan showing Minor Suggested Changes on 13 August 2018. This is part of our ‘back to basics’ affordable housing series and is intended to supersede entry 1 in the series. Continue reading

Revised National Planning Policy Framework—will it fix the housing market?

This article was first published on Lexis®PSL Planning on 9 August 2018.

Will the government’s new planning rulebook deliver on its promises? Robert Walton, barrister at Landmark Chambers, says the new National Planning Policy Framework (NPPF) is a step in the right direction and should result in more houses. Matthew White, partner and head of the planning team in Herbert Smith Freehills LLP’s London office, predicts that, by itself, the revised NPPF will not streamline the planning process, nor close the gap between planning permissions and housing delivery. Continue reading

Impact of revised National Planning Policy Framework

The revised National Planning Policy Framework (NPPF) was published on 24 July 2018. This post considers what difference it will make – in terms of the impact on developers, whether the government’s aims will be achieved and how soon its effects might be seen.

Impact on developers

On the whole, policies in the revised NPPF are more restrictive. Tighter controls over design standards, green belt boundaries, developer contributions and viability appraisals, stronger protection for the environment and the introduction of the “agent of change” principle to new development all provide little incentive to bring forward development.

A welcome change, however, is that LPAs should now take a more flexible approach to daylight and sunlight issues.

The new standardised methodology for calculating housing need, which takes effect immediately, represents a significant change for residential development. It will provide more certainty on housing requirements in each LPA’s area, generally with an increase in housing targets. Local authorities’ success in delivering against these targets will be assessed by the new Housing Delivery Test. From November 2018 local plans will be deemed out of date if the LPA fails to deliver 25% of its housing target as assessed by the new standardised methodology; this threshold will increase in subsequent years to 45% of the target from November 2019 and 75% of the target from November 2020. If local plans are deemed out of date the presumption in favour of sustainable development will be brought into play, increasing the likelihood that planning permission will be granted. Continue reading

EGi: What’s so unlawful about London’s affordable housing policy?

The High Court has declared a key policy in the mayor of London’s planning guidance on affordable housing ‘unlawful’ – but what does that mean in practice? Matthew White, Partner and Head of UK planning, explains the impact of the decision in this article published on EGi on 25 June 2018, in hard copy in Estates Gazette on 30 June 2018.

For more information please contact:

Matthew White
Matthew White
Partner and Head of UK planning practice, London
+44 20 7466 2461