Buying your land back after a Compulsory Purchase Order
If you have sold your property to a government body under a Compulsory Purchase Order (CPO), and they later decide that land is no longer needed, you may have certain rights to buy it back. If the government intend to sell land you previously owned, it must follow non-statutory rules, called the Crichel Down Rules, which set out how the land is sold.
The Crichel Down Rules
Originating in the 1950’s, these rules get their name from the “Crichel Down affair”. This was a political scandal ending in the resignation of Sir Thomas Dugdale from office after he failed to keep a promise that land belonging to the daughter of the third Lord Alington (which had been compulsorily purchased) should be offered back to her once it became clear it was surplus.
The general principle under these rules is that if a government body decides land which was bought under a CPO, or the threat of one, is no longer needed and should be sold, the previous owners of that land should be given first opportunity to buy it back.
Terms of the Deal
In the same way that a government body is required to pay current market value for land when purchasing under a CPO, you will be required to pay current market value for your land when buying it back. In fact the government department that is selling the land has an obligation to the taxpayer to get the best price for the land. In order to make sure this is the case, the “current market value” will be set by a professionally qualified valuer chosen by the government department selling the land.
If the land has potential for development, the general rule is that the government department should apply for planning permission before selling the land in order to achieve a better price for it. If this is not possible or appropriate for any reason, the government department can require clawback provisions be included in any deal. These are provisions which allow the government to claim a percentage of any increase in value of the land if planning permission is granted in the future and makes the land more valuable.
Although the government should offer you the land first, there is no obligation to buy it. If you do decide to purchase the land, you will need to negotiate the terms of the sale, including any terms relating to planning or clawback provisions, with the government body selling the land.
Are there any exceptions?
There are certain circumstances where the Crichel Down Rules do not require the government body to give you the first opportunity to buy the land back. The main exception is where the land has been “materially changed” since it was purchased. A material change means a change of use (for example if working farm buildings were converted to residential houses), or development on a site which is not merely temporary (for example, constructing office blocks on bare land, or repairing, renovating and extending a dilapidated pub). Where there would be a significant cost in returning the land to its original state, it is likely that there has been a “material change”.
There are several other less common exceptions, including where the government has held the land for a very long time and where sale is not commercially viable because the area of land is so small.
What should I do if I am offered my land back?
With the Northern Distributor Road edging ever nearer to its completion, it is likely that the local Council will later be considering whether all the land purchased for the development is still needed and may begin to approach former landowners to dispose of surplus land. Whilst the prospect of regaining land which was compulsorily purchased off you can be tempting, it is important that you consider the deal carefully and negotiate sale terms that work for you.
If you have been offered your land back and need assistance with the deal, or if you have any questions about the contents of this article, please contact our Commercial Property Team on 01603 281105 or by emailing info@leathesprior.co.uk.
Note: The content of this article is for general information only and does not constitute legal advice. Specific legal advice should be taken in any particular circumstance.