Calculating compensation for a compulsory purchase order

This page looks at the amount of compensation you should get for your home if the council, the Scottish Government or another authority buys it from you using a compulsory purchase order (CPO).

How much money will I get?

At the end of the CPO procedure, you should be no better off and no worse off financially than you would have been if your home hadn't been subject to a CPO. This may not always be the case in practice, but this is the principle underlying the CPO system.

This means that the council should undertake a valuation for the compulsory purchase order and offer you the 'market value' of the house. This is the price you would have been likely to get for your home if it hadn't been subject to a CPO and you'd sold it on the open market. This valuation won't take into account any changes to the value of the home caused by the CPO or the work the council is planning to do. For example, if the council is building a new leisure centre that will enhance the area, you won't be offered a higher price for your home. Likewise, if the council is building a motorway that will decrease the value of your home, you won't be offered a lower price.

If your home is in poor condition, you may get a lower price for it (see 'what if my home is substandard' below).

If you're disabled and your home has been specially adapted for you, you should get extra compensation.

What if the council's only buying part of my land?

If the council is only buying part of your land, you'll get the market value for that part, along with compensation for any decrease in value to the rest of the property caused by the loss of the land and the effect of the new development on your home.

Can I haggle?

Yes. The price you're offered will be based on a valuation carried out by the council's surveyors, but you don't have to accept this price if you think your home is worth more. Try talking to your neighbours to find out what they've been offered and whether they're going to accept, then get in touch with a solicitor or surveyor and ask them to negotiate with the council on your behalf. A independent survey carried out on your behalf. Bear in mind that even if your surveyor values your home at a higher price, the council may not agree with their valuation.

Remember that solicitors and surveyors are entitled to charge you for their services and this can be expensive. Ask for an estimate of costs before any work is done on your behalf. The council may pay their fees as part of your compensation. However, you'll probably have to pay for these costs upfront and you might not get the money back for a while, if at all.

When should I negotiate the valuation?

You or your solicitor can negotiate a price before or after the CPO has been approved.

Before the compulsory purchase order has been approved

At this point you are under no obligation to sell, so are negotiating to sell voluntarily. You may get a better price this way, but you won't be automatically entitled to compensation, so make sure the council agrees to include compensation in the deal.

After the compulsory purchase order has been approved

Once the CPO has been approved, you are legally bound to sell your home to the council. However, your solicitor should still be able to negotiate a fair price with the council.

When will I get the money?

The money will be paid to you once the legal work to transfer ownership of the property to the council has been completed. This might happen quite quickly or it could take a long time, even years in some cases. However, if there are delays, you may be able to get some of the money in advance (see 'how do I get a payment in advance' below).

What if the council wants me to move out before we've agreed on a price?

In this case, you will still need to move out. However, the council must pay you interest on the final price from the removal date until the price is agreed. You can also ask to have part of the money paid to you in advance (see below).

How do I get a payment in advance?

If you need to get a payment in advance, you must apply to the council in writing. The council has to pay the money either within three months of you making the application, or when it takes over ownership of the house, whichever is later. You'll be given 90 per cent of the agreed price of the home. If you haven't agreed on a price yet, you'll get 90 per cent of the price the council thinks your home is worth. If this estimate turns out to be too low, you can write to the council to ask for the balance. Otherwise, you'll receive the balance with the rest of the payment, when all the legal work to transfer ownership of the property has been completed.

The council can also pay you any interest that has built up along with the advance payment.

What if the council says my home is substandard?

If the council is buying your home because it's substandard, different rules apply. For example, the council may be buying your home to demolish it, or because it's below the 'tolerable standard', which means it may not be fit for you to live in. Read the page on repairing responsibilities to find out more about the tolerable standard.

How much will I get if my home is substandard?

In this case, you will only receive the 'site value' for your home. The site value is either:

  • the value of the land your home is on without any buildings on it, or

  • the market value of your home, if this is lower.

If you live in a flat, you'll be given a proportionate share of the value of the land, based on the information in the title deeds to you property. Your solicitor will be able to look at your title deeds and check you get the correct share.

Can I get a supplementary payment?

If you've only received the site value of your home, you could also be entitled to a supplementary payment, provided that you or members of your family have lived in the home for two years. Even if you haven't lived in the property for two years, you could still be able to get a supplementary payment if you had no good reason to believe the house would become subject to a CPO when you bought it.

A supplementary payment is added onto the site value, to make up the price to the market value.

If you're not eligible for a supplementary payment, you may still be able to get a well maintained payment.

What if I don't think my home is substandard?

If you don't think your home is substandard, you may be able to challenge the council. Talk to an adviser at Citizens Advice or to your solicitor if you're in this situation.

Can I claim any other compensation?

You may be able to claim some additional compensation if the council uses a CPO to buy your home for one purpose and then, within the next ten years, gets planning permission to use the land for another, more profitable purpose (for example, if they subsequently sell the land onto a developer).

If the council gets planning permission for a more profitable purpose, it must send you a notice to let you know. Make sure you leave the council a forwarding address (or your solicitor's address), so it knows how to contact you. You'll then need to apply for additional compensation within six months of receiving this notice.

If you live in the property, you may also be able to claim home loss and disturbance payments, and possibly also a well maintained payment.

What if I can't agree on a price?

If you don't think the council are offering you a fair price and you can't negotiate anything better, you can appeal to the Lands Tribunal - you can find out more about how to apply at the Lands Tribunal website. Talk to a solicitor before you apply - they will be able to tell you if it's worth pursuing your case.

Where can I get help and advice?

Planning Aid for Scotland offers free, independent advice to individuals and community groups on all aspects of planning and related issues. You can also get information and advice from the Royal Institute of Chartered Surveyors Scotland (RICS), your council's planning department and your local Citizens Advice.

If you need to talk to someone, we’ll do our best to help. Get Help

Last updated: 10 May 2017

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