It is widely known that local authorities have statutory powers to acquire and allocate land for specific purposes under the Town and Country Planning Act 1990 (TCPA 1990).
It is perhaps less widely known that local authorities are able to convert certain third party property rights into a right to the payment of compensation in order to enable a development to take place in accordance with a planning permission by either (i) transferring the allocation of land from its existing purpose to another (typically planning purposes) or (ii) acquiring land for planning purposes. This is known as ‘appropriation’.
The general power to appropriate land is conferred on principal councils (e.g. a District Council, non-metropolitan County Council or London Borough) under of the Local Government Act 1972 which makes clear that a principal council may appropriate land:
- Belonging to that council;
- That is no longer required for the purpose for which it is held;
- For any other purpose for which it is authorised by statute to acquire land.
The general power to appropriate land does not apply to common land, fuel and allotment land over a certain size. There are still statutory mechanisms by which these types of land can be appropriated but they are beyond the scope of this note (see section 229 of the TCPA 1990).
How could appropriation be a useful tool?
Under section 203 of the Housing and Planning Act 2016 (HPA 2016) a local authority can override easements and other rights in land that has been appropriated for planning purposes, subject to payment of compensation under section 204 of the HPA 2016.
Under section 203 a principal council can erect, construct, or carry out or maintain any building or work on land that has been appropriated by it for planning purposes, even if that work or use involves an interference with a breach of a contractual restriction.
Typically, these powers are used to lawfully override a restrictive covenant or a right benefiting a neighbouring property (most typically rights to light).
There are four requirements that must be fulfilled in order for section 203 to be used:
- the site must been acquired or appropriated by a local authority for planning purposes;
- there is planning consent for the building or maintenance work or use;
- a local authority could (if not already the owner) acquire the site compulsorily for the purposes of carrying out works (including construction and maintenance works) , or for the use of the land permitted by the relevant planning consent;
- the work or use in question relates to the purposes for which the land was appropriated.
There is a theoretical risk that if the land is appropriated for a specific purpose and it is not used for that purpose, the rights will be resurrected. This makes clarity of reporting hugely important – it is vital that the specific purpose of the appropriation is clearly established at the point of the relevant council’s decision, and sets out the full extent of the proposed works and/or uses.
Importantly for developers, these powers extend to successors in title, meaning land structures can be devised to ensure that developers are protected by the provisions of section 203, even when the land in question has been disposed of by the relevant council.
There are certain important exclusions to note to the power to override easements, including rights which belong to, or are vested in:
- Statutory undertakers
- Electronic Communications Code network operators (including rights conferred by the Code)
- The National Trust.
Is there a procedure for notifying land owners rights are to be overridden?
HPA 2016 does not set any specific procedure for triggering section 203, other than the requirements set out above.
As a matter of good practice and ensuring transparency, however, any local authority looking to use the powers in section 203 should prepare a detailed report justifying its use of the powers (in much the same way as though it were exercising CPO powers), and should ensure the decision to proceed is properly recorded or published.
This is likely to be a lengthy report detailing:
- how the authority is satisfied that its actions fall within the requirements of HPA 2016;
- that there is a case in the public interest; and
- that the use of the powers is proportionate and justified, notwithstanding any private rights.
Of course, section 203 is of particular importance where it may not be possible to establish or otherwise adequately address all rights which affect a property, but where rights are known, and before a local authority triggers section 203, an authority should identify all of the rights which may be infringed and seek a release of those rights. Records of all negotiations and attempts at negotiations should be kept as it will be important to show that negotiations have been unsuccessful.
Section 203 may also involve an interference with human rights under article 1 (protection of property) and, where residential properties are affected, article 8 (family and private life). The interference should therefore be properly considered by a local authority before appropriating any land.
Some local authorities have also been known to undertake a period of public consultation on the use of such rights, but this is not based in any particular statutory requirement and therefore does not need to be pursued to lawfully use the section 203 powers.
Compensation
Compensation under section 204 of the HPA 2016 is assessed on the basis of the loss in value of the land that had the benefit of those rights/covenants as a consequence of the interference or breach. This should therefore be taken into consideration by a local authority. Specialist valuation advice should always be sought, and should take into account the nature of the interference, and any alternative access arrangements etc that might be being offered as part of the works.
Indemnity for legal costs
If a developer is involved at the outset of appropriation, a local authority will usually seek an indemnity from the developer in respect of all costs and expenses incurred by the authority in connection with both its costs of following the process, and the cost of any third party claims made in relation to the exercise of these powers.
Authorities also usually require the developer to pay all legal costs associated with the contractual arrangements in seeking to acquire known rights, including any potential costs of negotiations with the Lands Tribunal.
Developers should therefore weigh up whether the costs and compensation payable under the indemnity are less than the potential costs of third party negotiation, and whether insurance might be a viable alternative.
Once appropriated, who can the local authority dispose of the land to?
Under section 233(1) of the TCPA 1990, a local authority can dispose of appropriated land as the local authority believes is expedient to obtain one of the following:
- The best use of that or other land and any buildings or works which have been, or are to be, erected, constructed or carried out on it.
- The erection, construction or carrying out on it of any buildings or works appearing to the authority to be needed for the proper planning of its area.
Can appropriation be challenged?
Appropriation by a local authority or its subsequent disposal can be challenged if a local authority has reached its decision on a legally flawed basis, or has not carried out the correct legal process. Any claim would need to be made by judicial review.
Examples of “High Profile” Appropriation: