Learn how these notices can shape home-buying decisions and property value. When buying you must use the Homebuyers survey, to uncover all issues related to the property.
What is the purpose of a blight notice?
A blight notice is a legal notice served by a property owner to a public authority, when a property is likely to be acquired by the authority.
This is often due to planned public works or development projects.
A blight notice forces the acquiring authority to buy your home.
When do you qualify?
To qualify for a blight notice, specific conditions must be met. The property might be near a proposed infrastructure scheme, or within an area marked for urban redevelopment.
If a local authority or government department plans to acquire the property automatically, a blight notice becomes a relevant tool for the owner.
The legal definition of a blight notice
Legally, a blight notice falls under the realm of statutory blight. It's part of the compulsory purchase terms defined in the UK law.
The notice is a formal declaration by the property owner, claiming that the presence or prospect of compulsory purchase substantially reduces the property's market value.
This notice compels the acquiring authority to buy the property, usually at market value with related compensation.
Caveats of blight notices
Only resident freeholders and leaseholders with a lease duration of at least three years remaining qualify.
You must demonstrate that you've attempted to sell the property through a reputable estate agent and have been unsuccessful, except at a significantly reduced price.
An authority can successfully defend against a blight notice if they can show they have no intention of acquiring a property in the future, such as if a regeneration scheme is postponed or cancelled.
If the government has already confirmed a Compulsory Purchase Order or similar Order, there's no requirement to demonstrate reasonable efforts to sell.
The impact of a blight notice on property
Reduction of property value
Blight notices often lead to a decline in property value.
The market perceives these properties as less desirable due to the compulsory purchase in the future. This perception can substantially reduce the price property owners might expect on the open market.
You're likely to encounter a restricted pool of potential buyers, primarily those seeking bargains or specialised in dealing with such properties.
When a local authority or acquiring authority announces infrastructure schemes or housing developments that affect your property, the likelihood of receiving a blight notice increases.
This announcement alone can deter potential buyers, fearing the uncertainties and complexities a blight notice brings.
It's not just about the immediate reduction in value; the prolonged presence of a blight notice can lead to other challenges. Empty properties awaiting resolution can fall into disrepair, further diminishing their value.
Case studies: how blight notices have affected homeowners
Homeowners near large-scale development projects, like new roads or airports, often find themselves facing these notices. For instance, consider a homeowner in a rural area earmarked for a new motorway. Once rumours of a blight notice start, the value of the property might drop, and selling becomes difficult without accepting a substantially reduced price.
One case involved a homeowner whose property lay in the path of a proposed rail link. After receiving the blight notice, they struggled to sell the property, even at a reduced price. Despite reasonable endeavours, the only genuine offers came from investors looking to capitalise on the situation, offering far less than the home's prior market value. In this instance, the homeowner opted to serve a blight notice on the local authorities, triggering a legal process to sell the property to the acquiring authority at a fair market rate.
However, this process was time-consuming and emotionally taxing, highlighting the toll such situations can take on homeowners.
Understanding these effects helps you anticipate the challenges you might face if your property becomes subject to a blight notice.
By looking at how others have navigated these waters, you can prepare better for any similar situations that may arise in your journey as a property owner.
Why blight notices are seldom utilised
The blight notice procedure is not simple. You should be cautious about invoking blight notices; they are not used often for valid reasons.
If there's expected to be substantial disagreement regarding the property's value, negotiating the price and associated compensation can become a lengthy and challenging process, spanning months or even years.
In cases where consensus cannot be reached, there's a risk of losing your home, with the possibility of only receiving an advance payment (typically 90% of the authority's estimated value of your claim).
Any surplus amount would then require further negotiation or resolution through a prolonged and costly legal procedure.
The Royal Institution of Chartered Surveyors (RICS) operates a helpline scheme, which you can get free assistance from.
Getting advice from a solicitor rather than a conveyancer might be useful for you.
Compulsory purchase order (CPO) and blight notices
A compulsory purchase order (CPO) empowers certain bodies, typically public or statutory authorities, to acquire land or private property without the consent of the owner.
Authorities use CPOs mainly for public works or development projects deemed beneficial for the broader community.
In some cases, property owners can challenge the order, but typically, these efforts require substantial evidence and legal backing.
The connection between CPO and blight notices
A direct link exists between compulsory purchase orders and blight notices. When an authority announces a public works scheme or significant development, properties in or near the development area can face a blight notice.
This legal notice implies the property might be needed for the scheme.
Blight notices allow resident freeholders, whose property lies within the affected area, to sell their property to the acquiring authority ahead automatically, bypassing the expensive court process.
For you, as a property owner, understanding the interplay between compulsory purchase orders and blight notices is a must.
Recognising the early signs of a proposed development scheme near your property and the possible issuance of a blight notice will go a long way in preparing for future decisions.
Compulsory purchase order terms
When dealing with compulsory purchase orders, familiarising yourself with specific terms is beneficial. Terms like 'acquiring authority', 'open market price and related compensation', or 'blight claim' often appear in discussions and documents related to CPOs.
Knowing these terms helps you effectively communicate with legal experts or chartered surveyors and grasp the nuances of your situation.
Blight notice enforcement
When an acquiring authority objects to a property under a blight notice, the owner can enforce the notice. This action compels the authority to purchase the property.
It's a powerful tool for resident freeholders caught in the wake of proposed development schemes.
Serving a counter notice within two months can challenge the authority's estimate of the value of the property or other related matters.
However, tackling this requires specific legal knowledge, so seeking professional advice is advisable.
Lands chamber and tribunal
In cases of dispute regarding a blight notice, parties may refer the matter to the Upper Tribunal (Lands Chamber). This judicial body handles disputes relating to land valuation and compensation. Its decisions can profoundly impact the final settlement, including the years remaining before the notice will go ahead and the advance payment the owner might receive.
Understanding these connections and legalities can be complex. Hence, as a property owner, you should seek legal advice early in the process.
Timeframe for resolution of a blight notice
The resolution timeline for a blight notice can vary. Factors influencing this include the local council's actions and your response rate.
Keep engaged with your legal advisor and monitor the process closely for a timely resolution.
If the council fails to respond within two months, the blight notice will be activated automatically, prompting the council to initiate the process of purchasing your home.
Upon acceptance of the blight notice, a legal document known as a Notice to Treat will be issued, indicating the council's commitment to acquire the property under Compulsory Purchase terms, either through voluntary sale or compulsion.
The authority is then given a three-year timeframe to complete the acquisition.