Compulsory purchase is the power to purchase rights over an estate in English land law, or to buy that estate outright, without the current owner's consent. In England and Wales, Parliament has granted several different kinds of compulsory purchase power, which are exercisable by various bodies in various situations. Such powers are meant to be used "for the public benefit". This expression is interpreted broadly.
Although land may be acquired by consent, or by conduct which raises another party's reasonable expectations, these private methods of acquiring land are often insufficient for adequate public regulation. Building national infrastructure, such as railways, housing, and sewerage, typically needs compulsory purchase, because private owners might not give up land required for public works except at an extortionate price.
History
Historically, compulsory purchases were carried out under the Inclosure Acts and their predecessors, where enclosure was frequently a method of expropriating people from common land for the benefit of barons and landlords. In the industrial revolution, most railways were built by private companies procuring compulsory purchase rights from private Acts of Parliament, though by the late 19th century, powers of compulsory purchase slowly became more transparent and used for general social welfare, as with the Public Health Act 1875, or the Housing of the Working Classes Act 1885. Compulsory purchase legislation was significantly extended during the First World War for military use, and after the war for housing, as certain principles became standardised.
Local authority purchase
Today, the Land Compensation Act 1961 section 5 generally requires that the owner of an interest in land (e.g. a freehold, leasehold or easement as in Re Ellenborough Park) receives payment for the "value of the land ... if sold on an open market by a willing seller". Compensation is often also available for losses to a home, or if one's business has to move. The Compulsory Purchase Act 1965 sets conditions for a purchase to be made, and the Acquisition of Land Act 1981 regulates the conditions for granting a "Compulsory Purchase Order". Typically, either central government represented by a Secretary of State, or a local council will be interested in making a compulsory purchase.
The authority of local councils to make purchases for specific reasons can be set out in specific legislation, such as the Highways Act 1980 to build roads when strictly necessary. However the Town and Country Planning Act 1990 section 226, which allows compulsory purchase to "facilitate the carrying out of development, re-development or improvement" for the area's economic, social, or environmental well being, must be confirmed by the Secretary of State, and similarly the Local Government Act 1972 section 121 requires the council seek approval from the government Minister.
Leasehold purchase
The most general power originally appeared in the Leasehold Reform Act 1967. Under that Act, the Leasehold Reform Act 1987, and the Leasehold Reform, Housing and Urban Development Act 1992, private individuals who are leaseholders have the power in certain circumstances to compel their landlord to extend a lease or to sell the freehold at a valuation.
Recompense, under compulsory purchase, is not necessarily a monetary payment of open market value (see James v United Kingdom [1986]), but in most cases a sum equivalent to a valuation made as if between a willing seller and a willing purchaser will fall due to the previous owner.
Utility companies
Utility companies have statutory powers to, for example, erect electrical substations or lay sewers or water pipes on or through someone else's land. These powers are counterbalanced by corresponding rights for landowners to compel utility companies to remove cables, pipes or sewers in other circumstances (see for example section 185 of the Water Industry Act 1991).
Compulsory purchase only applies to the extent that it is needed for the purchaser's purposes. Thus, for example, a water authority does not need to buy the freehold in land in order to run a sewer through it. An easement will normally suffice, so in such cases the water authority may only acquire an easement through the use of compulsory purchase.