Article Directory :: Finance & Investment Articles

What is a Compulsory Purchase Order?

By Carlton Johnson

Republish: EasyPublish™ Published: 12Jul2008 Word count: 504 Viewed: 344 time(s) Get Free Content For Your Site

Have you ever thought to your self - what is a compulsory purchase order? This article will explain what this term means and it will also explain to you why it is important in terms of property investing or developing.

A compulsory purchase (CPO) order is given by authorities to allow them to purchase a property in the future.

This gives the authorities the right to purchase a property in the future for a specific purpose. If you take a look at the area where the order is placed you will usually see that there is some sort of development taking place. The development could be that the road is being widened or they are doing some other sort of work in the area. However sometimes CPO's can appear haphazard and lacking any plans as regards to where they are located.

Take for example an area like Burnley. There were properties in Burnley a few years ago that were under a compulsory purchase order, but the decision appeared to be random. Half of the properties on a given street were under orders while others in the street were not.

If your property is under a compulsory property order you will typically be given the fair market price for your property. The government does not wish to put any property owner in a worse position as the result of a CPO.

The government has determined that this power is only given to local authorities when it is necessary to make improvements to the land for things like, urban regeneration. This is the method the government must use to gain the land that is necessary for these improvements. They shall only be used as part of a plan for redevelopment or to regenerate the area.

There are some problems with these orders, however. You may be getting the fair market value of the property, but when is the value determined?

Will the price be given to the landowner at the time the order is issued or will they wait until the time the property is about to be demolished.

There is a vital difference between these two timings. If your value is determined when they are about to demolish the whole area to enable them to start regeneration, your property could be considerably less valuable because of the other properties that have already been knocked down. Your property will not have as much of a value in an area that is barren and undergoing major renovation.

This is why it would be wise to get in writing from the local authorities what they plan to pay you and when. If possible, it would also be prudent to get written assurances that this figure will not change in a negative way in the future.

There have been people who have done quite well with the amount of money the government has given them for their property, while others have not. You will need to do all you can to make sure you are not one of the latter.

EasyPublish™ this article - publishers click here

More articles by Carlton Johnson

Free Report!
Ten Essential Secrets Of Article Marketing ... Grab Your Free
Copy Now:

Need Content?
Regular Top Quality Content for your Blog, Ezine or Website ...
Delivered Direct,
For Free!
Click For Details