The offer a homeowner can't refuse

A compulsory purchase order? Make sure you get adequate compensation, advises Ian Hunter

It is a sobering thought that even after you have found your dream home the Government can transform it into a nightmare by means of compulsory purchase order (CPO).

The continued demand for widened motorways and expanded airports is enough to leave many home-owners in fear. Sometimes, just the fact that a neighbourhood is being considered for a scheme can blight a property for years.

Compulsory purchase powers are not restricted to the Department of Transport. Parliament gives similar powers to government departments, local authorities, development corporations, and service providers such as British Gas.

The first step for the acquiring authority is to send a copy of the proposed CPO to all concerned - usually the freeholder, leaseholder and occupier.

Those affected will be given an opportunity to lodge objections with the Secretary of State. A public inquiry will normally be held to consider objections, unless these relate only to compensation. Objectors can challenge the authority's reasons for seeking a CPO, either personally or through professional advisers such as solicitors or chartered surveyors.

The inspector appointed by the Secretary of State will normally visit the property, and must consider all the evidence before submitting a recommendation. This is usually accepted, and the Secretary of State then informs the acquiring authority. The order becomes effective when a notice is published in a newspaper explaining where and when it will be carried out.

Legal aid may be available to prepare grounds for an objection. Once the order has been confirmed, the authority will move to take possession. It may do this by notice to treat, compelling the owner to agree a price. The alternative is a more Draconian vesting order, permitting the authority to obtain title to the property before paying compensation.

The underlying principle is that the authority must pay compensation which puts the owners in the position they would have been in, had they not acquired the property. This should take into account the cost of buying another home, removal expenses, and legal and other professional fees. It can also include the cost of asking a professional surveyor to argue your case.

Nick Warren, a partner at Chapman Warren, a London-based planning and development firm, says: "I always advise clients to object to CPOs. Acquiring authorities hate the delay and are forced to negotiate with the objector, who will usually end up better off financially."

Not every CPO is necessary. Government guidelines for disposing of surplus property require that former owners should normally be given the first opportunity to repurchase. However, this obligation lasts only 25 years, after which they are allowed two months to indicate an interest, two months to agree terms and a further six weeks to agree a price.