UK: Key Things To Know About Compulsory Sales Orders

Last Updated: 11 September 2018
Article by Lucy Cowan

Compulsory Sales Orders

Scotland currently has around 11,600 hectares of vacant/derelict land and it is believed that there are more than 37,000 long-term empty houses. The Land Reform Review Group set up by the Scottish Government in 2012  made several recommendations aimed at addressing this problem. One such recommendation was to give planning authorities the power to require vacant or derelict land to be sold by public auction, a "compulsory sales order" (CSO).

The Scottish Land Commission (SLC) has been working with the Scottish Government and other stakeholders to develop a proposal on how CSOs can work in practice.  The proposal was published in August 2018 and it is intended to provide the Scottish Government with a framework for developing CSOs.

What is a CSO?

A CSO is a mechanism to enable local authorities to bring problematic vacant sites and buildings back into productive use.

The type of land that a CSO would focus on would be land or buildings that are either derelict, have been vacant for an undue period of time and where this is having a detrimental impact on the surrounding community.

The proposal outlines the following criteria for potential CSO sites:

  • relatively small;
  •  not used for any productive purpose;
  • causing demonstrable harm to the surrounding community;
  • located within or on the immediate periphery of existing settlements; and
  • have previously been developed.

What is the justification for proposing CSOs?

The proposal highlights that the compulsory mechanisms currently available require the local authority or community to have a clear plan for how the land or building should be used. This is not required for a CSO where there need only be a desire to see the land or building brought into productive use.  The proposal suggests that a CSO would provide a "valuable alternative" to the existing compulsory purchase powers held by local authorities and right to buy powers held by communities.

The proposal makes reference to research which shows that transferring land from a "passive owner" to an "active owner" is a pre-condition for bringing vacant/derelict land into productive use.  The proposal suggests that land often remains vacant because the owner has unrealistic expectations about the value of the site.  The proposed CSO process would involve an auction, thus providing a mechanism for the true market price to be revealed.

The proposal also suggests that the real strength of CSOs is the role that they could play in facilitating dialogue with owners of problematic sites, therefore stimulating regeneration.

What is the proposed process for obtaining a CSO?

  • Site Identification – The planning authority would identify the site (based on the local knowledge of individual councillors and councillors).
  • Preliminary investigations – The planning authority would undertake preliminary investigations into the site. Before any formal proceedings commenced, the planning authority would be required to submit a report based on the preliminary investigations which would clearly demonstrate the public interest case for the CSO.
  • Decision – The decision is made by the planning authority at a meeting, which the landowner would be invited to attend and given the opportunity to make representations at.
  • Order – If the decision is taken to commence CSO proceedings, the planning authority would issue a formal Order to the owner of the site. The owner could object to the Order being made and any objection would be made to the Planning and Environmental Appeals Division.
  • Auction – The planning authority responsible for granting the CSO would facilitate the auction. An independent valuer would advise on the management of the sale. The auction would be open for anyone to bid.
  • Conditions of Sale – Statutory conditions would be attached to the sale.  Should the new owner not comply with the conditions of sale and not bring the site into productive use within the prescribed time frame, the planning authority could purchase the site at a price set by an independent valuer.

What measures would be proposed to protect the landowner?

The proposal highlights that any CSO would involve directly interfering with an individual's property rights so the public interest served by the CSO must outweigh the cost to the individual.

The proposal seeks to ensure that the measure is proportionate and fair in a number of ways –

  • The planning authority would have to compile strong evidence in favour of a CSO before initiating the action.
  • The proposed process allows for engagement with the landowner, particularly at the early stage where preliminary investigations are being made.
  • Any planning authority considering initiating a CSO would have to give due consideration to any reasonable alternatives that may exist to bring the property back into productive use and take steps to work with the landowner to achieve these.
  • There would be separation between the authority issuing the CSO and the body to which an appeal is made by the landowner.  The proposal suggests that appeals should be made to the Planning and Environmental Appeals Division (which forms part of Scottish Government) whereas the CSO would be granted by a planning authority.

What happens next?

The proposal poses a number of questions and indicates that these are intended to support any future work that the Scottish Government may undertake in connection with CSOs.  It appears that it is now for the Scottish Government to decide whether to take forward the proposal for CSOs.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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