Compulsory purchase powers: mandatory behaviours

Best behaviour

30 August 2017

Surveyors who can advise on compulsory purchase powers are essential in providing much-needed infrastructure. Tony Mulhall and Fiona Mannix outline 20 mandatory behaviours expected of such professionals under new RICS guidance

In recent years, the UK government has announced a number of major infrastructure projects, some of which are now moving towards construction. Fundamental to these projects is the acquisition of land, in which the exercise of compulsory purchase powers and associated compensatory measures by RICS professionals is key.

The majority of countries recognise the right to private property, so the infringement of that right requires the highest level of justification. The compulsory acquisition of land and property has to pass a very stringent public interest test before it can be approved. In Europe, those who feel their rights have been infringed can also have recourse to the European Convention on Human Rights, a route which is not related to EU membership.

Yet the ability to acquire land and property compulsorily is essential to the functioning of a modern economy. The UK realised this as early as the 19th century, and the origins of RICS itself stem from the need to represent the competing interests of both railway promoters and landowners at the time.

Competing contexts

Article 1 of the first protocol of the European Convention on Human Rights guarantees the right to property and recognises the requirement to balance private and public interests, stating that:

“Every natural or legal person is entitled to the peaceful enjoyment of [their] possessions. No one shall be deprived of [their] possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

The principle of equitable compensation is central to providing recompense for any property taken. This is intended to place the claimant in a position where they are no better or worse off than they were prior to the acquisition, and is done on the basis that the scheme that has prompted this acquisition is to be ignored.


With the growing scale of compulsory acquisitions required by the government’s infrastructure agenda, RICS is keen to ensure there are sufficient surveyors with the appropriate skills.

Thinking in this area is evolving. When utilities were entirely in public ownership, there was clear alignment between the public interest objectives of the utility company and compulsory acquisition. As former public utilities move into the private sector, however, their main objective becomes increasing shareholder value. The barrister Barry Denyer-Green suggests the demand for additional compensation may thus increase, to reflect the underlying benefit sought from the scheme.

With the growing scale of compulsory acquisitions required by the government’s infrastructure agenda, RICS is keen to ensure there are sufficient surveyors with the appropriate skills. High Speed 2 (HS2) from London to Birmingham, for example, is a £55bn project, and the estimated cost of land and property to be acquired over a 15-year period is around £5bn.

The proposed expansion of Heathrow Airport, meanwhile, has an estimated land and property acquisition cost of around £5m. There is also the prospect of Crossrail 2, which would make substantial additional demands on compulsory purchase expertise.

Given the serious nature of acquiring private property compulsorily and the volume of work anticipated in this area, the government wants claimants’ interests to be properly represented.

As a first step towards ensuring expert surveyors are available, RICS has published the professional statement Surveyors advising in respect of compulsory purchase and statutory compensation, UK, 1st edition, which identifies 20 mandatory behaviours required when carrying out compulsory purchase work.

Mandatory professional behaviours

Application and principal message

1. You must be able to demonstrate a proper understanding of the statutes, statutory instruments, case law and government guidance in respect of the compulsory purchase code (subsection 2.5 of the professional statement).

2. You must ensure you are able to discharge your duties to the required standard and consider all matters material to the instruction (2.6).

3. You must be aware of the changes in responsibility that will occur should your duties later involve you acting as an expert witness, and how that may affect the carrying out of work prior to that change (2.7).

4. Where you accept instructions to provide advice in respect of the compulsory purchase code, as soon as you become aware that judicial or quasi-judicial proceedings seem likely you must advise your client in writing of your ability or otherwise to comply with RICS’ practice statement Surveyors acting as expert witnesses, 4th edition (2.8).

Duty in providing advice

5. Where information material to the advice being given is not available, or is not evidenced or corroborated to your satisfaction, you must clearly state this to your client and advise what assumptions have been made (3.2).

6. You must endeavour to establish the material information and collect appropriate evidence during the period of your instruction (3.2).

7. You must provide your client with balanced and professional advice that seeks to secure an equitable outcome for them, consistent with the requirement to agree fair and reasonable compensation and in accordance with the compulsory purchase code for a reasonable cost and within a reasonable timescale (3.5).

8. On commencement of an instruction, you must provide your client with clear advice as to the basis on which, in your opinion, relying on the information available, compensation is likely to be assessed in accordance with the compulsory purchase code. If your client is not prepared to proceed on the basis of what you consider to be a reasonable approach to the assessment of compensation, this must be identified and resolved (3.6).

9. If you identify a material inaccuracy or change your view of a matter material to advice given, you must notify those instructing you without delay (3.7).

10. Clients on either side can, and do, seek to influence surveyors. You must demonstrate your professionalism by maintaining a reasonable and balanced approach (3.8).

Acceptance of and changes to instructions

11. You must not accept instructions to advise on matters unless you have:

  1. the requisite competence appropriate for the assignment
  2. the resources to complete the assignment within the timescale and to the standard required (4.1).

12. Prior to accepting any instructions, you must:

  1. advise those instructing you in writing that this professional statement will apply and offer to supply a copy of the statement on request
  2. ensure there is a written record, held by you, as to the matters on which advice is required, and whether such written record is prepared on your initiative or that of those instructing
  3. confirm your terms of engagement to your client
  4. be satisfied no conflict of interest arises and take account of RICS’ professional statements and guidance in respect of conflicts of interest. You must report any actual or potential conflict of interest to those instructing you as soon as it arises or becomes apparent. This applies both before and after instructions have been accepted (4.2).

13. If your instructions are changed or supplemented, you must ensure there is a written record of this held as required above (4.3).

Inspection

14. Where an inspection of any property is required, it must always be carried out to the extent necessary to produce professionally competent advice having regard to its purpose and the circumstances of the case (5.1).

15. A suitable record of the size, configuration, relevant features and condition of the property, which is representative of the circumstances at the compensation valuation date, must be prepared and where possible agreed with the other party (5.2).

Reports

16. In reporting your advice you must consider all matters material to the instruction (6.2).

Fees

17. Where a basis for calculating fees is proposed, the initiative will usually come from the claimant’s surveyor, who will have received instructions from their claimant. You must demonstrate that the basis for fees and disbursements is reasonable in relation to the complexity of the claim (7.2).

18. When advising claimants, you must ensure in all cases the basis on which you propose to charge fees, the arrangements for payment, and any subsequent changes are agreed with your client in writing. This agreement must be presented promptly to the acquiring authority (7.3).

19. You must make clear to your clients, at the earliest opportunity and before any time is incurred, that they bear ultimate liability for your fees on the agreed fee basis. You must advise your clients that they will be liable for any fees that are not borne by the acquiring authority (7.5).

20. You must be clear with your clients and advise them when any time is to be spent on matters the costs of which are not normally borne by the acquiring authority and do so before that time is incurred (7.6).

Fiona Mannix and and Tony Mulhall are Associate Directors in the RICS Land Professional Group

Further information

Download a complete “Compulsory purchase powers: mandatory behaviours” PDF