The sixth in a series of articles by the aspireCP team looking at best practice in compulsory purchase from an acquiring authority’s perspective.

The act of taking possession of land under compulsory purchase powers is the culmination of years of activity. Success by the acquiring authority is often measured in terms of delivering vacant possession to the contractor on or before the agreed date without adverse publicity. However, the act of taking possession is the point at which disturbance compensation is crystallised and the acquiring authority’s (AA’s) actions leading up to this event can have a significant impact on the ability of the claimant to mitigate their losses and hence keep the compensation within budget. Such losses will have their roots years earlier. This article explores best practice in organising for success when taking possession and builds on the foundations of both effective engagement with landowners and exercise of powers set out in our previous articles.

Strategy

The exercise of powers is normally an activity that is retained and managed by the acquiring authority. A successful outcome is dependent on understanding of the risks and then by anticipating these risks, the acquiring authority can plan-ahead and pull everything together into a coherent programme with the necessary resources to deliver possession AND mitigate the risks.  For Crossrail we set out the objectives, strategy and the process to be followed in a comprehensive management plan and followed the process more than 1,000 times, refining the approach along the way and according to the circumstances required at each site.

Programme

The land will need to be delivered to a schedule in line with the main works contract and which you know is deliverable. Following confirmation of the CPO, the programme should allow for the CPO judicial review period, a minimum 3 months’ notice for possession logistics for the preparation of the notices and governance approvals in advance of notice service as well as the notice period itself. Such programme is not without risk, notably risks of re-service of notices, delay from material detriment claims, and possible need to organise attendance by the Court Sheriff. We would normally expect to see 3-4 weeks allowance for risk built into the schedule.

Penalties for late delivery of land will not only delay the project but can also lead to significant damages being paid to the waiting contractor. Equally, securing possession too early can also have unwanted consequences. If limited time has been given for occupiers to vacate then there will be reputational damage for the project if no construction activity is evident and it also brings with it a risk of squatters, security costs and health and safety liability. The procurement process should therefore require construction tenderers to link the need for land to their contract activities and be asked to group together parcels required at different construction milestones. Adding your 3-4 week risk period to the contractual handover possession dates will generally give you your “Target Possession Dates” to communicate to affected parties.

The construction programme dates and precise land requirements inevitably develop and mature between ITT, contract award and actual possession. However, with possession dates generally linked to construction milestones not fixed dates, this can make it challenging to give certainty for affected parties to plan their relocation. Think about how the following could help occupiers plan-ahead without affecting the construction programme.

1. As construction milestones can move forward or back you should advise affected parties as to how this could affect their date for possession;
2. Consider offering commitment to a “not before” date. Target Milestone could be deferred at the acquiring authority’s discretion but not brought forward, giving a degree of certainty for affected parties;
3. If time permits offer more than the minimum 3 months vesting/entry period;
4. Commitment to purchase property immediately following confirmation of the CPO, expiry of the Judicial Review period and funding being secured.

To plan and manage this process on Crossrail we developed a Possession Schedule with possession planning meetings 10 weeks (Green Review), 6 weeks (Amber Review) and then 2 weeks (Red Review) before entry onto land was required.  As necessary these involved specialist compensation surveyors, the Crossrail Land & Property team, a site-based project management representative, contractors’ representatives, community relations specialist and a health and safety manager, bringing in specialist advisors and High Court Enforcement officers if required.  On this basis we were able to clearly define roles, actions and track the status of these through to taking possession of the land.

Engagement

There are few businesses that will be able to look for, secure and relocate to alternative property within the minimum three months period. In our previous article (Pro-active claimant engagement) we explored the benefits of early engagement in helping to mitigate losses and hence reduce compensation. A key objective in engagement is to understand the impact of giving only the minimum three months’ notice, quantifying the compensation savings from longer notice and agreeing appropriate commitments to mitigate such loss consistent with delivering the land to programme.

Securing possession contractually

Government Guidance encourages AAs to purchase land by agreement. This is often done in the form of an option agreement. However, some property will also be acquired outright. Purchasing investment properties early can be an effective means of restructuring leases onto AST’s or excluded leases in exchange for rateable value compensation or pre-agreed sums rather than compensation under the Code. Where a business tenancy is acquired following the exercise of compulsory purchase powers, regard must now be had to the likelihood of the continuation or renewal as a consequence of S.47(3) of the LCA 1973 introduced in 2017. Hence, if you have not completed restructuring a business tenancy before exercise of compulsory purchase powers over such an interest then you must have regard to:

1. The likelihood of the continuation or renewal of the tenancy;
2. Secondly, the right of a business tenant to apply for the grant of a new tenancy under Part II of the Landlord and Tenant Act 1954;
3. Thirdly, the total period for which the tenancy may reasonably have been expected to continue, including after any renewal; and
4. The terms and conditions on which a tenancy may reasonably have been expected to be renewed or continued.

Surveys

Property is often quickly demolished following possession or can soon become vandalised or dilapidated. Surveys and photographic records should be undertaken and shared with the affected parties prior to possession. This offers a window of opportunity for errors to be rectified. AAs should consider requiring the supply chain undertaking such surveys to offer a duty of care to the affected parties to avoid duplication of effort. Three types of survey are common:

• A schedule of defects for ascertaining compliance with leasehold repairing obligations;
• A schedule of condition for sites occupied temporarily;
• A measured survey in compliance with the RICS code of measuring practice.

In addition to formal surveys it will also be necessary to undertake a health & safety risk assessment determining the likely hazards on site and the need for whatever forms of Personal Protective Equipment (PPE) will be required on the day and any particular works that man need to be carried out in order to take over care, custody and control of the land and buildings.

Procuring and managing work of this nature can be a time-consuming exercise and needs to be planned in good time. Also, sharing high volumes of hard copy is often problematic and hence data file sharing with internal and external stakeholders should be considered. Best practice is moving towards sharing data via a portal accessible by claimants and their advisors

High Court Enforcement Officer

If you have properly engaged with affected occupiers in the previous two years leading up to possession then you should have identified where longer than the statutory minimum three months’ notice is required, which will de-risk the possession process. Regular contact with affected landowners will provide intelligence on those struggling to vacate on time, to understand their issues and enable the AA to give practical assistance. Whilst a warrant is available from High Court Enforcement Officer (S.13 CPA 1965) to take forcible possession where the land is unoccupied or the occupier offers resistance, forcible possession should be a last resort. We recommend the Officer is kept appraised of cases where Enforcement services could be required and encouraged to visit occupiers at least twice before possession is required so occupiers appreciate the consequences of the statutory notices.

Entry onto land

On the day of entry, the team may need to meet an hour in advance for any final briefing and to exchange contact numbers etc.  The entry team numbers should be minimised but the following will be required a ‘client’ surveyor to project manage entry, record chattels, meter readings, photograph items of importance/concern and administer signatures on the handover certificate; a case surveyor to seal the transfer legalities, reassure the agent/owner/occupier and manage the money transfer if applicable; a contractor to take keys, pick up ongoing utility bills and receive the asset.  Where possible it is helpful to glean as much information from the departing occupant as possible i.e. Health and Safety files, fire/intruder alarm programme codes, which utility suppliers are in-situ/notified, stopcock locations and any Operations and Maintenance manuals. It is also helpful to bear in mind that some occupants may take electrical appliances with them on the day, leaving bare wires exposed and it is worth preparing to manage and mitigate this on the day.

Goods & Equipment left on the premises

At common law, if chattels are left in the property without the consent of the acquiring authority they remain the claimants property. If the authority knowingly take possession of such goods they will be an “involuntary bailee” who has a duty to take reasonable care of the goods in their possession. The authority should serve a chattels notice under the Torts (Interference with Goods Act) 1977 on the occupier giving reasonable notice that they will be disposed of unless collected. In the interim the goods can be moved until sold. Once sold the proceeds, net of reasonable costs, should be credited to the owner of the goods. You will not be able to hand over your site to the contractor until you have found somewhere to store the goods left on the premises and so understanding this risk early is another important factor for which to plan.

Contractor access & handover

Some projects involve the early acquisition of properties, either by agreement, under discretionary purchase schemes or simply where it is not immediately possible to hand on to a contractor.  This results in a liability for security, maintenance and health and safety prior to handover for construction purposes. The property strategy developed at the outset will address who bears this risk, how it is managed and how risks mitigated.

1. There can be a high volume of properties acquired between the target date for possession and handover to the contractor. Common practice is to handover responsibility to the contractor simultaneously with possession from the occupier. The arrangements for this should have been set out in the ITT for the main works contract.
2. There are likely to be multiple competing demands for entry onto land acquired early but not yet handed over to the contractor. e.g. ecological surveys, ground conditions etc. On larger schemes AAs may wish to consider a diary booking system to be used, linked directly to the land referencing plans. In this way clashes in requirements will be flagged, progress recorded in delivering access, managing who is doing what and setting out restrictions on activities given in the CPO process.

IT Systems

The lead up to possession is in our experience the most intense period of AA activity; understanding the impact on claimants, financial assessment of loss mitigation, tracking progress in acquisition, and recommending S.52 payments due on the date of possession. Your requirement for IT systems depends on the scale of the project. There will be off the shelf systems such as those offered by Manhattan and Concerto for property management of buildings acquired in the shadow period. However, none of these systems will link to the land referencing plans and ownership, nor link with the PCE or financial reporting systems. In our previous article on exercising powers, we explained best practice in capturing scheduling information regarding access to land and linking this with the stakeholder management and land referencing system to create the “Holy Grail” of IT solutions. TerraQuest have developed a portal to link with the AFiRMS compensation case management system to track progress in acquisition and the associated cash flow and payment repotting. The writing is on the wall for compulsory purchase data silos as we move towards an age of integrated systems and the efficiencies this will bring. IT systems will be explored in more detail in our next article.

Conclusion

The 12 months leading up to possession is the busiest time for any acquiring authority. S.52 advance payments will be required on the date of entry, surveys will need to be undertaken and intensive engagement with affected parties to facilitate timely entry.  Planning ahead is therefore critical for success, understanding the risks outlined in these articles and putting the relevant systems, processes and high-quality resources in place so they are embedded well before they are on the critical path.

If you want to know more, please visit our web-site at www.aspireCP.com, follow us on LinkedIn @aspire Compulsory Purchase LLP or contact:

Ian Lindsay         ilindsay@aspireCP.com  +44 7920 155 779

Adrian Maher    amaher@aspireCP.com  +44 7976 881 303

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