Blight is the decrease in value of your home due to the potential of Compulsory Purchase. Potential buyers may be put off from purchasing a property if they think it might be in danger of demolition.
If the property isn’t suitable for finance, the limited number of potential buyers will decrease its value.
A blight notice, or statutory notice, is when resident freeholders or leaseholders receive a demand from the council to buy the property from them. But why would someone use this, and what is it for?
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What is a CPO?
A Compulsory Purchase Order (CPO) is an order used to force homeowners to sell their property if it is seen as an obstruction to a vital project or is for the “greater public good”.
It is not a swift process and can take weeks, months, or even years for the local authority to issue the order. However, it will eventually come to pass. Unless the development suddenly halts.
The following are some of the situations where a CPO may be issued:
- Major developments are required to take place, such as new housing developments, airport expansions, or transport hubs.
- Services need to be installed or improved such as roads, railways, or electricity supplies.
- Areas of bad housing need to be cleared.
This can be a confusing time for the homeowner, as they know that they have to move out of the house but are unsure of when.
With a CPO threat looming over the property, can they still sell it for a reasonable price? Fortunately, a blight notice can be of assistance in this situation.
What is a blight notice?
The law provides a way to force the local authority to buy properties using Compulsory Purchase terms. They can do this by serving a blight notice in the form prescribed by the Council’s planning department or a Chartered Surveyor who specialises in Compulsory Purchase.
To qualify for a blight notice, you must be a resident freeholder or leaseholder with at least three years remaining on your lease. Landlords and owners of empty properties don’t qualify.
You must also prove that you attempted to sell the property through a reputable estate agent for around 6 months and were unable to get genuine offers at a price close to its unblighted value. No need to prove reasonable endeavours to sell if the Government has already issued a Compulsory Purchase Order or similar.
If an authority can demonstrate they have no intention of acquiring the property in the future (e.g. if a regeneration scheme is halted or cancelled), they can defend against a blight notice.
If you need assistance, the Royal Institution of Chartered Surveyors (RICS) operates a contact centre that can refer you to a firm in your area which provides 30 minutes of free advice on your case.
You may also wish to contact the Compulsory Purchase Association, whose members have the necessary experience to help.
Understanding Statutory Blight
Statutory blight occurs when a property’s value drops significantly or becomes unsaleable due to proposed public works or development schemes. This often happens when there’s a looming threat of compulsory purchase, which can deter potential buyers and make it difficult for the current owner to sell at a fair price.
How Does a Blight Notice Work?
When you serve a blight notice, you’re essentially forcing the hand of the acquiring authority (usually a local council or government body) to buy your property. Here’s how it typically unfolds:
- You serve the notice in writing to the relevant authority.
- The authority has two months to respond.
- If they accept, they must purchase your property under compulsory purchase terms.
- If they object, you may have the option to appeal to the Upper Tribunal (Lands Chamber).
Who Can Serve a Blight Notice?
Not everyone can serve a blight notice. You’ll need to meet certain criteria:
- You must be a resident freeholder or leaseholder with at least three years left on your lease.
- You need to have occupied the property for at least six months.
- The notice must cover the entire property, even if only part of it is affected by the proposed scheme.
When Should You Consider Serving a Blight Notice?
You might consider serving a blight notice if:
- Your property is affected by proposed infrastructure projects (e.g., new roads, railway lines, or airport expansions).
- There are plans for urban regeneration in your area that include your property.
- You’ve tried to sell your property but can’t due to the proposed schemes.
Tip: Before serving a blight notice, try to sell your property through a reputable estate agent for about six months. This can help prove that the proposed scheme is genuinely affecting your ability to sell.
The Blight Notice Process: A Step-by-Step Guide
- Gather evidence: Collect proof that your property is affected by the proposed scheme and that it’s impacting your ability to sell.
- Serve the notice: Submit a formal blight notice to the acquiring authority. You can usually get the form from your local council.
- Wait for a response: The authority has two months to reply.
- Handle the outcome:
- If accepted, negotiate the purchase price.
- If rejected, decide whether to appeal to the Upper Tribunal.
- Complete the sale: If successful, the authority has three years to complete the purchase.
Tip: Keep detailed records of all communications and attempts to sell your property. This can be crucial if you need to prove your case.
Potential Pitfalls and How to Avoid Them
- Insufficient evidence: Ensure you have solid proof of your property’s reduced value or unsaleability.
- Timing issues: Don’t wait too long after moving out to serve the notice – you only have 12 months if you’ve left the property.
- Partial acceptance: The authority might only agree to buy part of your property. Consider carefully whether this suits your needs.
- Valuation disputes: Be prepared for disagreements over the property’s value. Consider getting an independent valuation.
How long does the blight notice process take?
The initial response should come within two months, but the entire process can take much longer, especially if there are disputes.
What if the authority doesn’t respond within two months?
If there’s no response, the blight notice is automatically accepted, and the authority must buy your property.
Can I withdraw a blight notice?
Yes, you can withdraw a blight notice at any time before it’s accepted or before the authority takes possession of the property.
What compensation can I expect?
You should receive the full unblighted market value of your property – that is, what it would be worth if the scheme didn’t exist.
How long does it take to get a blight notice outcome?
Once you’ve sent a blight notice to the council, they must let you know within two months whether they will buy your home or not, and if not, why not. The council has a limited number of grounds on which it can object.
If the council does not respond to you within two months, the blight notice will go into effect automatically and the council will have to purchase your home.
If the blight notice is accepted as valid, a legal notice called a Notice to Treat is served. This commits the authority to acquire the property on Compulsory Purchase terms, either through voluntary sale or compulsion. The authority has three years to do so.
If the council rejects the notice, they will need to provide reasons. These could include: that none of the land is relevant to the blight notice, the acquiring authority does not wish to purchase any of the land, or they only wish to purchase part of it.
If the reasons seem unjustified, you have grounds to appeal. You must do this within two months of receiving the initial outcome.
In some cases, the CPO might be cancelled if, for example, the project is no longer viable or has been altered so that your property and area are no longer affected. In this case, the council can reject the blight application and will not buy your property.
Why do people rarely use blight notices?
Be cautious about what you desire. Blight Notices are uncommon and for good purpose. Firstly, if there is likely to be a lot of disagreement on the worth of the claim (for instance, if similar properties have not recently sold), bargaining the price and related remuneration can be difficult and time-consuming, taking months or even years.
If a consensus cannot be reached, you may end up losing your home with the ability to only receive an advance payment for it (90% of the authorities’ estimation of the value of your claim).
Any surplus would need to be either negotiated or decided through a further prolonged and expensive court procedure.
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