Part IV Compulsory Purchase
Advance payment of compensation
52 Right to advance payment of compensation.
F1(1)
An acquiring authority may make an advance payment on account of compensation payable by them for the compulsory acquisition of an interest in land if a request has been made under subsection (2) after the compulsory acquisition has been authorised.
(1A)
In a case where the compulsory acquisition is one to which the Lands Clauses Consolidation Act 1845 applies, the acquiring authority may not make an advance payment if they have not taken possession of the land, but must do so if they have.
(1B)
In all other cases, an acquiring authority must make an advance payment under subsection (1) if, before or after the request is made, the authority—
(a)
give a notice of entry under section 11(1) of the Compulsory Purchase Act 1965, or
(b)
execute a general vesting declaration under section 4 of the Compulsory Purchase (Vesting Declarations) Act 1981 in respect of that land.
F2(2)
A request for advance payment must be made in writing by the person entitled to it (“the claimant”) and must include—
(a)
details of the claimant's interest in the land, and
(b)
information to enable the acquiring authority to estimate the amount of the compensation in respect of which the advance payment is to be made.
(2A)
Within 28 days of receiving a request, the acquiring authority must—
(a)
determine whether they have enough information to estimate the amount of compensation, and
(b)
if they need more information, require the claimant to provide it.
(3)
Subject to subsection (6) below, the amount of any advance payment under this section shall be equal to 90 per cent. of the following amount, that is to say—
(a)
if the acquiring authority and the claimant have agreed on the amount of the compensation, the agreed amount;
(b)
in any other case, an amount equal to the compensation as estimated by the acquiring authority.
F3(4)
An advance payment required by subsection (1A) must be made—
(a)
before the end of the day on which the authority take possession of the land, or
(b)
if later, before the end of the period of two months beginning with the day on which the authority—
(i)
received the request for the advance payment, F4...
(ii)
received any further information required under subsection (2A)(b)F5, or
(iii)
received any further information required under section 52ZC(2)(b).
(4ZA)
An advance payment required by subsection (1B) must be made—
(a)
before the end of the day on which the notice of entry is given or the general vesting declaration is executed, or
(b)
if later, before the end of the period of two months beginning with the day on which the authority—
(i)
received the request for the advance payment, F6...
(ii)
received any further information required under subsection (2A)(b)F7, or
(iii)
received any further information required under section 52ZC(2)(b).
F8(4A)
Where, at any time after an advance payment has been made on the basis of the acquiring authority’s estimate of the compensation, it appears to the acquiring authority that their estimate was too low, they shall, if a request in that behalf is made in accordance with subsection (2) above, pay to the claimant the balance of the amount of the advance payment calculated as at that time.
F9(5)
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F10(6)
If the land is subject to a mortgage sections 52ZA and 52ZB apply.
(7)
Any advance payment on account of compensation in respect of an interest which is settled land for the purposes of the M1Settled Land Act 1925 shall be made to the persons entitled to give a discharge for capital money and shall be treated as capital money arising under that Act.
(8)
F11Before an acquiring authority make an advance payment under this section on account of compensation in respect of any interest in land they shall deposit with the council of the district or London borough F12or Welsh county or county borough in which the land is situated particulars of the payment F13to be made, the compensation and the interest in land to which it relates;. . . F14
F15(8A)
Any particulars deposited pursuant to subsection (8) above shall be a local land charge and for the purposes of the M2 Local Land Charges Act 1975 the council with whom any such particulars are deposited shall be treated as the originating authority as respects the charge thereby constituted.
(9)
F16Where a local land charge is registered in the F17... local land charges register pursuant to subsection (8A) above and the advance payment to which the charge relates is made to the claimant, then if thereafter
F18(a)
the claimant's interest in some or all of the land is acquired by another person, or
(b)
the claimant creates an interest in some or all of the land in favour of a person other than the acquiring authority,
the amount of the advance payment together with any amount paid under section 52A shall be set off against any sum payable by the authority to that other person in respect of the compulsory acquisition of the interest acquired or the compulsory acquisition or release of the interest created.
(10)
Where an advance payment has been made under this section on account of any compensation—
(a)
section 76 of the M3Lands Clauses Consolidation Act 1845 and section 9 of the M4Compulsory Purchase Act 1965 (refusal of owner to convey on tender of compensation) shall have effect as if references to the compensation were references to the balance thereof remaining unpaid F19. . .
F20(11)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(12)
This section shall apply to compensation for the compulsory acquisition of a right over land as it applies to compensation for the compulsory acquisition of an interest in land, and shall so apply with the necessary modifications and as if references to taking possession of the land were references to first entering it for the purpose of exercising the right.
F21(13)
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F2252AZARepayment by claimant etc.
(1)
Where the amount or aggregate amount of any payments under section 52 made on the basis of the acquiring authority's estimate of the compensation exceeds the compensation as finally determined or agreed, the excess is to be repaid.
(2)
If after any payment under section 52 has been made to any person it is discovered that the person was not entitled to it, the person must repay it.
(3)
If the notice to treat relating to an interest in land in relation to which an acquiring authority have made a payment to a claimant under section 52 is withdrawn or has ceased to have effect before the authority take possession of the land, the authority may by notice require the claimant to pay them an amount equal to the amount of the payment, unless another person has acquired the whole of the claimant's interest in the land.
(4)
Subsection (5) applies where—
(a)
a payment made to a claimant has been registered as a local land charge in accordance with section 52(8A),
(b)
the whole of the claimant's interest in land has subsequently been acquired by another person (a “successor”),
(c)
any notice to treat given in relation to the interest is withdrawn or ceases to have effect before the acquiring authority take possession of the land, and
(d)
the authority notify the successor that they are not going to give the successor a notice to treat (or a further notice to treat) for the interest.
(5)
The authority may by notice require the successor to pay them an amount equal to the amount of any payment made to the claimant under section 52.
(6)
A notice under subsection (3) or (5) must specify the date by which the claimant or successor must pay the amount.
(7)
The date mentioned in subsection (6) must be after the period of two months beginning with the day on which the authority give the notice under subsection (3) or (5).
(8)
Neither subsection (3) nor subsection (5) affects a right to compensation under section 31(3) or (3A) of the Land Compensation Act 1961 or section 5(2C)(b) of the Compulsory Purchase Act 1965.
F2352ZAAdvance payments: land subject to mortgage
F24(1)
This section applies if—
(a)
a request is made for an advance payment under section 52(1) in respect of land,
(b)
the authority is required by section 52(1A) or (1B) to make the advance payment, and
(c)
the land is subject to a mortgage the principal of which does not exceed 90% of the relevant amount.
(2)
The advance payment made to the claimant must be reduced by the amount the acquiring authority think will be required by them to secure the release of the interest of the mortgagee (or all the mortgagees if there is more than one).
(3)
The acquiring authority must pay to the mortgagee the amount the acquiring authority think will be required by them to secure the release of the mortgagee’s interest, if—
(a)
the claimant so requests, and
(b)
the mortgagee consents to the making of the payment.
(4)
If there is more than one mortgagee—
(a)
subsection (3) applies to each mortgagee individually, but
(b)
payment must not be made to a mortgagee before the interest of each mortgagee whose interest has priority to his interest is released.
(5)
The amount of the advance payment made to the claimant under section 52 and the amount of the payments made to mortgagees under this section must not in aggregate exceed 90% of the relevant amount.
(6)
Subsection (7) applies if—
(a)
the acquiring authority estimated the compensation,
(b)
it appears to the acquiring authority that their estimate was too low and they revise the estimate, and
(c)
a request is made by the claimant in accordance with section 52(2).
(7)
The provisions of subsections (2) to (5) must be re-applied on the basis of the revised estimate.
52ZBAdvance payments: land subject to mortgage exceeding 90% threshold
F25(1)
This section applies if—
(a)
a request is made for an advance payment under section 52(1) in respect of land,
(b)
the authority would be required by section 52(1A) or (1B) to make the advance payment if it were not for this section, and
(c)
the land is subject to a mortgage the principal of which exceeds 90% of the relevant amount.
(2)
No advance payment is to be made to the claimant.
(3)
But the acquiring authority must pay to the mortgagee the amount found under subsection (4), if—
(a)
the claimant so requests, and
(b)
the mortgagee consents to the making of the payment.
(4)
The amount is whichever is the lesser of—
(a)
90% of the value of the land;
(b)
the principal of the mortgagee’s mortgage.
(5)
The value of the land is the value—
(a)
agreed by the claimant and the acquiring authority, or (failing such agreement)
(b)
estimated by the acquiring authority.
(6)
For the purposes of subsection (5) the value of the land is to be calculated in accordance with rule 2 of section 5 of the Land Compensation Act 1961 (market value), whether or not compensation is or is likely to be assessed in due course in accordance with rule 5 of that section (equivalent re-instatement).
(7)
If there is more than one mortgagee, payment must not be made to a mortgagee until the interest of each mortgagee whose interest has priority to his interest is released.
(8)
But the total payments under subsection (3) must not in any event exceed 90% of the value of the land.
(9)
Subsection (10) applies if—
(a)
the acquiring authority estimated the compensation,
(b)
it appears to the acquiring authority that their estimate was too low and they revise the estimate,
(c)
the condition in F26section 52ZA(1)(c) would have been satisfied if the revised estimate had been used instead of their estimate, and
(d)
a request is made by the claimant in accordance with section 52(2).
(10)
The provisions of section 52ZA(2) to (5) must be applied on the basis of the revised estimate.
(11)
If—
(a)
the acquiring authority estimated the value of the land,
(b)
it appears to the acquiring authority that their estimate was too low and they revise the estimate, and
(c)
a request is made by the claimant in writing,
any balance found to be due to a mortgagee on the basis of the revised estimate is payable in accordance with this section.
52ZCLand subject to mortgage: supplementary
(1)
This section applies for the purposes of sections 52ZA and 52ZB.
F27(2)
Within 28 days of receiving a request for a payment under section 52ZA or 52ZB, the acquiring authority must—
(a)
determine whether they have enough information to give effect to section 52ZA or, as the case may be, 52ZB, and
(b)
if they need more information, require the claimant to provide it.
(3)
A request under section 52ZA(3) or 52ZB(3) must be made in writing and must be accompanied by the written consent of the mortgagee.
F28(3A)
In a case where the compulsory acquisition to which the request relates is one to which the Lands Clauses Consolidation Act 1845 applies, the acquiring authority must make any payment under section 52ZA or 52ZB—
(a)
before the end of the day on which the authority take possession of the land, or
(b)
if later, before the end of the period of two months beginning with the day on which the authority—
(i)
received the request under section 52ZA(3) or 52ZB(3), F29...
(ii)
received any further information required under subsection (2)F30, or
(iii)
received any further information required under section 52(2A)(b).
(3B)
In all other cases, the authority must make any payment under section 52ZA or 52ZB—
(a)
before the end of the day on which the notice of entry is given or the general vesting declaration is executed, or
(b)
if later, before the end of the period of two months beginning with the day on which the authority—
(i)
received the request under section 52ZA(3) or 52ZB(3), F31...
(ii)
received any further information required under subsection (2)F32, or
(iii)
received any further information required under section 52(2A)(b).
(4)
Subsections F33... (8) to (9) of section 52 apply to a payment which may be or is made under section 52ZA or 52ZB as they apply to a payment which may be or is made under section 52.
(5)
The relevant amount is the amount of the compensation agreed or estimated as mentioned in section 52(3).
(6)
If the land is subject to more than one mortgage, the reference in sections 52ZA(1)(c) and 52ZB(1)(c) to the principal is to the aggregate of the principals of all of the mortgagees.
(7)
A payment made to a mortgagee under section 52ZA or 52ZB—
(a)
must be applied by the mortgagee in or towards the discharge of the principal, interest and costs and any other money due under the mortgage;
(b)
must be taken to be a payment on account of compensation and treated for the purposes of section 52(10) as if it were an advance payment made under section 52;
(c)
must be taken, with effect from the date of the payment, to reduce by the amount of the payment the amount in respect of which interest accrues for the purposes of section 11(1) of the Compulsory Purchase Act 1965 F34or any bond under section 85 of the Lands Clauses Compensation Act 1845;
(d)
must be taken into account for the purposes of determining any payments (or payments into court) which may be made for the purposes of sections 14 to 16 of the Compulsory Purchase Act 1965.
(8)
If the amount, or aggregate amount, of any payments under—
(a)
sections 52 and 52ZA, or
(b)
section 52ZB,
on the basis of the acquiring authority’s estimate of the compensation exceed the compensation as finally determined or agreed, the excess must be repaid by the claimant.
(9)
No payment must be made to a mortgagee—
(a)
if any of the circumstances mentioned in subsection (10) applies, or
(b)
if the compulsory acquisition is only of a right over land.
(10)
The circumstances are—
(a)
payment has been made under section 14(2) of the Compulsory Purchase Act 1965;
(b)
a notice under section 14(3) of that Act has been given;
(c)
there is an agreement under section 15(1) or 16(1) of that Act or the matter has been referred to the F35Upper Tribunal under that section.
(11)
The claimant in relation to settled land for the purposes of the Settled Land Act 1925 is the persons entitled to give a discharge for capital money.
F3652ZDMaking a request for advance payment
(1)
The appropriate national authority may by regulations impose requirements about the form and content of a request under section 52(2), 52ZA(3) or 52ZB(3).
(2)
In subsection (1) “appropriate national authority” means—
(a)
in relation to a request relating to the compulsory acquisition of land in England, the Secretary of State;
(b)
in relation to a request relating to the compulsory acquisition of land in Wales, the Welsh Ministers.
(3)
Regulations under subsection (1) may permit or require a person specified in the regulations to design a form to be used in making a request.
(4)
Regulations under subsection (1) may require an acquiring authority to supply, at specified stages of the compulsory acquisition process, copies of a form to be used in making a request.
(5)
Regulations under subsection (1) are to be made by statutory instrument.
(6)
A statutory instrument containing regulations under subsection (1) is subject to annulment—
(a)
in the case of an instrument made by the Secretary of State, in pursuance of a resolution of either House of Parliament;
(b)
in the case of an instrument made by the Welsh Ministers, in pursuance of a resolution of the National Assembly for Wales.
F3752ZEPayment to mortgagee recoverable if notice to treat withdrawn
(1)
Where an acquiring authority have made a payment to a mortgagee under section 52ZA or 52ZB in relation to an interest in land and notify the claimant that the notice to treat relating to the interest is withdrawn or has ceased to have effect before the authority take possession of the land, the authority may by notice require the claimant to pay them an amount equal to the amount of the payment, unless another person has acquired the whole of the claimant's interest in the land.
(2)
Subsection (3) applies where—
(a)
a payment under section 52ZA or 52ZB has been registered as a local land charge in accordance with section 52(8A),
(b)
the whole of a claimant's interest in land has subsequently been acquired by another person (a “successor”),
(c)
any notice to treat given in relation to the interest is withdrawn or ceases to have effect before the authority take possession of the land, and
(d)
the acquiring authority notify the successor that they are not going to give the successor a notice to treat (or a further notice to treat) in relation to the interest.
(3)
The authority may by notice require the successor to pay them an amount equal to the amount of the payment.
(4)
A notice under subsection (1) or (3) must specify the date by which the claimant or successor must pay the amount.
(5)
The date mentioned in subsection (4) must be after the period of two months beginning with the day on which the authority give the notice under subsection (1) or (3).
(6)
Neither subsection (1) nor subsection (3) affects a right to compensation under section 31(3) or (3A) of the Land Compensation Act 1961 or section 5(2C)(b) of the Compulsory Purchase Act 1965.
F38 52A Right to interest where advance payment made.
(1)
This section applies where the compensation to be paid by the acquiring authority for the compulsory acquisition of any interest in land would (apart from this section) carry interest under section 11(1) of the Compulsory Purchase Act 1965 or any bond under F39... section 85 of the Lands Clauses Consolidation Act 1845.
F40(2)
If the authority make a payment under section 52(1) F41after the date of entry to any person on account of the compensation—
(a)
they must at the same time make a payment to that person of accrued interest, for the period beginning with the date of entry, on the amount of the compensation agreed or estimated under section 52(3) (the total amount), and
(b)
the difference between the paid amount and the total amount is an unpaid balance for the purposes of this section.
(2A)
The paid amount is—
(a)
the amount of the payment under section 52(1), or
(b)
if the land is subject to a mortgage, the aggregate of that amount and the amount of any payment made under section 52ZA(3).
(3)
If the authority make a payment under section 52(4A) above to any person on account of the compensation, they shall at the same time make a payment to him of accrued interest, for the period beginning with the date of entry, on—
(a)
the amount by reference to which the payment under section 52(4A) above was calculated; less
(b)
the amount by reference to which the preceding payment under section 52(1) or (4A) above was calculated.
(4)
Where the authority make a payment under section 52(4A) above on account of the compensation, the difference between—
(a)
the amount of the payment; and
(b)
the amount by reference to which it was calculated less the amount by reference to which the preceding payment under section 52(1) or (4A) above was calculated,
is an unpaid balance for the purposes of this section.
(5)
If, on an anniversary of the date on which the authority made a payment to any person under section 52(1) above on account of the compensation—
(a)
the amount of accrued interest on the unpaid balance under subsection (2) above or, as the case may be,
(b)
the aggregate amount of the accrued interest on any unpaid balances,
exceeds £1,000, the authority shall make a payment to the claimant of the amount or aggregate amount.
(6)
The acquiring authority shall, on paying the outstanding compensation, pay the amount of the accrued interest on the unpaid balance under subsection (2) above or, as the case may be, the aggregate amount of the accrued interest on any unpaid balances.
(7)
For the purposes of subsections (5) and (6) above, interest accrues on any unpaid balance for the period beginning with—
(a)
the making of the payment under section 52(1) or, as the case may be, 52(4A) above; or
(b)
if any payment has already been made in respect of that balance under subsection (5) above, the date of the preceding payment under that subsection.
(8)
For the purposes of this section—
(a)
interest accrues at the rate prescribed under section 32 of the Land Compensation Act 1961 or, in the case of a bond under section 85 of the Lands Clauses Consolidation Act 1845, at the rate specified in section 85; and
(b)
the amount by reference to which a payment under section 52(1) or (4A) was calculated is the amount referred to in section 52(3)(a) or (b) for the purposes of that calculation.
(9)
Where any payment has been made under section 52(1) above on account of any compensation, the acquiring authority is not required to pay interest under section 11(1) of the Compulsory Purchase Act 1965 or any bond F42... under section 85 of the Lands Clauses Consolidation Act 1845.
(10)
Where the amount, or aggregate amount, of any payment under section 52 above made on the basis of the acquiring authority’s estimate of the compensation is greater than the compensation as finally determined or agreed and, accordingly, the interest paid under this section is excessive, the excess shall be repaid.
(11)
If after any interest has been paid to any person under this section on any amount it is discovered that he was not entitled to the amount, the interest shall be recoverable by the acquiring authority.
(12)
The Secretary of State may from time to time by order substitute another sum for the sum specified in subsection (5) above; and the power to make orders under this subsection shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
F4352BInterest on advance payments of compensation paid late
(1)
If the acquiring authority are required by section 52(1A) or (1B) to make an advance payment of compensation but pay some or all of it late, the authority must pay interest on the amount which is paid late (“the unpaid amount”).
(2)
Interest under subsection (1) accrues on the unpaid amount for the period beginning with the day after the last day on which payment could have been made in accordance with section 52(4) or (4ZA).
(3)
If the amount of the advance payment is greater than the compensation as finally determined or agreed (“the actual amount”), the claimant must repay any interest paid under this section that is attributable to the amount by which the advance payment exceeded the actual amount.
(4)
The Treasury must by regulations specify the rate of interest for the purposes of subsection (1).
(5)
Regulations under subsection (4) may contain further provision in connection with the payment of interest under subsection (1).
(6)
Regulations under subsection (4) are to be made by statutory instrument.
(7)
A statutory instrument containing regulations under subsection (4) is subject to annulment in pursuance of a resolution of either House of Parliament.