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What challenges can compulsory purchase orders pose for commercial landlords?

Commercial landlords face a unique set of challenges when it comes to compulsory purchase orders (CPOs).

The ability of public bodies to acquire land without an owner’s consent can have financial and operational implications.

While the law provides for compensation, the legal framework is notoriously complex and fragmented, making it difficult for landlords to navigate their rights and options.

Acknowledging the problems of the current CPO framework

The Law Commission has acknowledged that the law governing compulsory purchase is difficult to access and understand, with a growing patchwork of legislation making it even more complicated.

Despite a review of CPO laws two decades ago, the Government decided against overhauling the framework due to concerns about resource requirements and potential unintended consequences.

Since then, piecemeal legislative changes have made the situation worse.

Numerous Acts, such as the Planning and Compulsory Purchase Act 2004 (the Act), the Housing and Planning Act 2016 (the Act), and the Levelling-up and Regeneration Act 2023 (the Act) have all added layers of complexity.

Now, the Law Commission is consulting again on how to simplify, consolidate, and modernise CPO legislation, with particular focus on:

Terminology clarity
Challenging the validity of a CPO
Creating a single, unified procedure
Technical issues such as completion costs and counter-notices
Compensation provisions

The consultation closes on 31 March, and landlords with concerns or experiences in this area are encouraged to participate.

What does this mean for commercial landlords?

If you own commercial property, a CPO could disrupt your investment, force relocation, or result in complex negotiations over compensation.

Here are some key considerations:

Compulsory purchase can only be carried out with statutory authority and must be in the public interest. If a CPO affects your property, you may be able to challenge its validity or negotiate better terms.
While compensation is a legal right, it does not always reflect the full impact on a landlord’s financial position. Understanding what you can claim for is crucial.
With the Law Commission seeking to streamline and modernise CPO laws, landlords should stay informed about potential changes that could impact their ability to challenge CPOs or claim compensation.

Looking ahead

Professor Alison Young, Public Law Commissioner, has emphasised the importance of ensuring that CPO law is clear and up to date.

For landlords, the ongoing review presents both challenges and opportunities, it may lead to greater clarity but could also introduce new processes that require adaptation.

If you are affected by a CPO, seeking expert legal advice can help you protect your investment and secure fair compensation.

Would you like to discuss your situation? Our team of commercial property solicitors can help. Contact us today.

Matthew Riding

Director – Head of Commercial Department

My core area of expertise lies in investor buy to let properties and property refinance. I have worked with a wide range of clients to deliver the advice and support that they require.

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