Part 1: Divided lands, material detriment
The Valuation Office Agency`s technical manual covering all aspects of compulsory purchase and compensation.
15.1 General
Authorities exercising compulsory powers to buy land frequently find that only part of a property is required for the scheme and include that part in the compulsory purchase order and notice to treat. However some protection (other than the entitlement to compensation for injurious affection and severance) is afforded to the property owner as many of the Acts conferring the power to take land compulsorily incorporate ‘material detriment’ provisions, whereby the owner, upon receipt of the notice to treat, can challenge the demand by the authority to take part of the property, and if the challenge is successful, compel the authority to purchase the whole of the property.
15.2 Role of the valuer
The application of the material detriment provisions, which are an integral part of the compensation code, requires consideration of both fact and law. The decision whether or not to accept a counter notice served by an owner requiring the acquisition of the whole of the interest in the property is one for the acquiring authority, but the valuer, on receipt of a request from the authority, is authorised to give advice both on the validity of the counter notice and the financial consequences of complying with the requirement to purchase the whole of the property.
15.3 Consultation
In any case where the valuer is satisfied that the acceptance of a counter notice served by the owner of an interest is fully justified by the circumstances, the concurrence of the acquiring authority should be obtained before opening negotiations for the purchase of an interest in the whole property.
Where there is doubt the valuer may proceed in accordance with the wishes of the acquiring authority but where such action conflicts with the principles of Practice Note 15/1 full details should be referred to the PS Professional Guidance Team before the valuer proceeds further.
15.4 Advice on financial effect (businesses)
When advice is given to the acquiring authority on the financial effect of acceptance of a counter notice, the possibility that a business that otherwise may not have been so affected may be totally extinguished, should be taken into account.
15.5 Effect of valuer’s advice
Where the valuer advises that the provisions do not apply and that advice determines the attitude of the acquiring authority, the PS Professional Guidance Team should be consulted if it involves possible litigation.
15.6 Section 8(1) CPA 1965
Where the authority is proceeding under a compulsory purchase order made under the provisions of the Acquisition of Land Act 1981 (ALA 1981) the relevant ‘material detriment’ provisions are set out in section 8 Compulsory Purchase Act 1965 (CPA 1965). The effect of this is that section 8 CPA 1965 applies to most purchases by Local Authorities and Government Departments under the powers of compulsory purchase conferred by a public general act. The exceptions to the general rule are set out below.
15.7 Effect of the provisions
Briefly the effect of section 8(1) CPA 1965 is that where:
- a) a part of the curtilage of a house, building or factory or
- b) part of the park or garden belonging to a house
is proposed to be acquired, the owner of an interest in that property is entitled to require the authority to purchase the interest in the whole of the property unless the authority can satisfy the Upper Tribunal (Lands Chamber) that the part required can be taken without material detriment to the remainder in cases within (a) or without seriously affecting the amenity or convenience of the house in cases within (b).
Unlike the case where a General Vesting Declaration (GVD) applies (see para 15.9) there is no statutory time limit where section 8(1) CPA 1965 applies within which the notice requiring purchase of the whole must be served. However, it was confirmed in Glasshouse Properties Ltd v Secretary of State for Transport [1994] 1 EGLR 207 that the case law decided under the 1845 Act is still applicable and requires a claimant to serve his notice requiring the authority to acquire the whole prior to the taking of entry by the authority.
A note on these material detriment provisions and the manner of giving effect to them generally is contained in Practice Note 15/1.
15.8 Material detriment
Material detriment provisions are also included in other statutes particularly concerning the acquisition of rights over land eg:
- Section 166 Town and Country Planning Act 1990
- Para 7 Schedule 19 Highways Act 1980
- Para 8 Schedule 3 Gas Act 1986
- Schedule 3 Electricity Act 1989
It would be necessary in each case for the valuer to have regard to the precise statutory provision under which the acquisition was taking place.
15.9 Part I Schedule 1 Compulsory Purchase (Vesting Declarations) Act 1981
Where an authority is proceeding by way of a General Vesting Declaration (GVD) under the Compulsory Purchase (Vesting Declarations) Act 1981 (CP(VD) Act 1981) the practical effect of the provisions in Part I Schedule 1 CP(VD) Act 1981 is the same as the normal case except that the owner of the interest serves a notice of objection to severance. The notice of objection must be served within 28 days of the date of service on the owner of the notice specifying the land and stating the effect of the GVD. The authority has a period of three months after the notice of objection has been served to:
- a) serve notice on the objector to withdraw the deemed notice to treat or
- b) serve notice on the objector that the GVD shall operate in respect of the whole of the objector’s interest, or
- c) refer the notice of objection to severance to the Upper Tribunal (Lands Chamber)
If no action is taken by the acquiring authority the deemed notice to treat is treated as withdrawn.
15.10 Section 166 TCPA 1990 (Blight Notices)
Where land is within the blight provisions of sections 149 to 171 TCP Act 1990 (see Part 2 of this Section) and the authority has served a counter notice to the effect that part only of the land is to be acquired (section 151(4)(c) TCP Act 1990) the owner is not prevented from invoking section 8 CPA 1965 where it would otherwise be appropriate to do so.
15.11 Acquisition of rights over land
The main enabling provision regarding the acquisition of rights is contained in section 28 Acquisition of Land Act 1981. However, the following Acts contain specific provisions with regard to the acquisition of rights:
- a) Highways Act 1980 Paragraph 7 Schedule 19 HA 1980 makes provision relative to the compulsory acquisitions of rights over land broadly to the same effect as, but in substitution for, section 8(1) CPA 1965
- b) Gas Act 1986 Similar provisions are made in Paragraph 8 Schedule 3 Gas Act 1986
- c) Local Government (Miscellaneous Provisions) Act 1976 Paragraph 7 Pt II Schedule 1 Local Government (Miscellaneous Provisions) Act 1976 substitutes for section 8(1) CPA 1965 revised provisions where a notice to treat is served in respect of a right over land consisting of a house, building or factory. The material detriment provisions as set out in Paragraph 15.7 above are enlarged to take effect where the purchase of the right affects the interest of the owner
The above list is not exhaustive and the valuer should have regard to the provisions of the Act under which the acquisition is being made.
15.12 Section 58 LCA 1973
Section 58 LCA 1973 applies to and amends the provisions of section 8(1) CPA 1965 (and the other statutory provisions with modification as necessary) to the extent that account is to be taken of the severance, the use made of the land to be acquired, the effect of the whole of the works and the use made of all the land in the scheme (See Practice Note 15/1).
Although the position is not entirely free from doubt it may be taken that the wording of section 58 LCA 1973 is wide enough to include disturbance and injury during the period of construction of the works.
15.13 Small areas
Where land not situated in a town or built upon having an area of less than half an acre is severed by the works from other land held by the owner who owns no adjoining land on the severed land site of the works the owner may require the acquiring authority to purchase the severed land along with the land subject to compulsory purchase (section 8(2) CPA 1965).
The words ‘built upon’ apply to lands that, although not part of a town, are covered with continuous buildings in the same manner as a town, and do not apply to lands in the open country that happen to have a building upon them. Thus the existence of a barn on the severed land would not preclude the application of section 8(2). In Falkner v Somerset & Dorset Railway (1873) LR 16 Eq a market garden with a cottage was held not to be land ‘built upon’.
15.14 Costly works
In accordance with section 8(3) CPA 1965 if the owner of any land divided by the works requires the acquiring authority under the provisions of the Special Act to construct a bridge, culvert or other connection between the severed parts, the acquiring authority may require the owner to sell the severed land provided the owner has no other land adjoining the severed part, and
- the land so severed, on one or both sides of the works, does not exceed half an acre, or
- the cost of providing the connection between the divided parts exceeds the value of the severed land
15.15 Where Notice to Treat is served
Sections 53 to 56 LCA 1973 provide that in the case of agricultural land where Notice to Treat is served on a person who has an interest greater than as a tenant for a year or from year to year, and the Notice relates to part only of the land comprised in that agricultural holding, the owner of that interest may by service of a counter notice require the authority to purchase the whole of the agricultural holding. Similarly where notice to enter is served on a person having an interest in agricultural land which is no greater than as a tenant for a year or from year to year and the Notice relates to part of the land comprised in the holding the owner may serve a counter notice electing to treat the notice of entry as a notice relating to the whole of the agricultural holding. These provisions are covered more fully in Section 8.
15.16 Blight Notice enlarged to include whole agricultural unit
Where the procedure in respect of a Blight Notice provided for in sections 158 to 160 TCPA 1990 has been put into operation, then insofar as the inclusion in the notice of part of the agricultural holding causes material detriment to the remainder and other relevant land (see section 158(3) TCPA 1990), the owner of the interest may require the authority to purchase the whole of the owner’s interest. This is dealt with more fully in Section 8 and Practice Note 15/2.
15.17 Land affected by use or construction of works
The provisions of section 246 HA 1980 or section 26 LCA 1973 apply only where no land is acquired for the scheme from the affected interest but the authority exercises its discretion to acquire properties seriously affected by the use or construction of the public works. Acquisitions under section 26 LCA 1973 are by agreement only but as the criteria in both cases differ from the material detriment provisions the procedure set out in Part 3 of this Section of this Manual should be followed.
Section 246 HA 1980 and section 26 LCA 1973 may be used as an alternative to the material detriment provisions where part of a holding is acquired.