Town and Country Planning Act 1990

Part V Compensation for Restrictions on New Development in Limited Cases

Preliminary

119 Scope of Part V

(1) This Part shall have effect for enabling compensation to be claimed in respect of planning decisions by which permission for the carrying out of new development of land is refused or is granted subject to conditions, in cases where at the time of the decision the land, or part of the land, has an unexpended balance of established development value.

(2) Schedule 12 shall have effect for the purpose of determining whether land has an unexpended balance of established development value for the purposes of this Part and, if so, what the amount of that balance is and for making further provision with respect to those questions.

(3) In accordance with subsection (5) of section 63, subsection (3) of that section does not apply for the purposes of this Part.

(4) In this Part—

(a) “interest” (where the reference is to an interest in land) means the fee simple or a tenancy of the land and does not include any other interest in it; and

(b) “local planning authority”, in relation to a planning decision, means the authority who made the decision.

Right to compensation

120 Right to compensation: general principles

Subject to the provisions of this Part, a person shall be entitled to compensation under this Part in respect of a planning decision by which planning permission for the carrying out of new development of land is refused, or is granted subject to conditions, if—

(a) at the time of the decision he is entitled to an interest in any land to which the decision relates which has an unexpended balance of established development value; and

(b) the value of that interest or, in the case of an interest extending to other land, the value of that interest in so far as it subsists in the land referred to in paragraph (a) is depreciated by the decision.

121 Planning decisions not ranking for compensation

(1) Compensation under this Part shall not be payable—

(a) in respect of the refusal of planning permission for any development which consists of or includes the making of any material change in the use of any buildings or other land; or

(b) in respect of any decision made on an application in pursuance of regulations under section 220 for consent to the display of advertisements.

(2) Compensation under this Part shall not be payable in respect of the imposition, on the granting of planning permission to develop land, of any condition relating to—

(a) the number or disposition of buildings on any land;

(b) the dimensions, design, structure or external appearance of any building, or the materials to be used in its construction;

(c) the manner in which any land is to be laid out for the purposes of the development, including the provision of facilities for the parking, loading, unloading or fuelling of vehicles on the land;

(d) the use of any buildings or other land; or

(e) the location or design of any means of access to a highway or the materials to be used in the construction of any such means of access,

or in respect of any condition subject to which permission is granted for the winning and working of minerals.

(3) In subsection (2) “means of access to a highway” does not include a service road.

(4) Compensation under this Part shall not be payable in respect of the application to any planning permission of any of the conditions referred to in sections 91 and 92.

(5) Subject to subsection (6), compensation under this Part shall not be payable in respect of the refusal of permission to develop land, if the reason or one of the reasons stated for the refusal is that development of the kind proposed would be premature by reference to either or both of the following matters, that is to say—

(a) the order of priority (if any) indicated in the development plan for the area in which the land is situated for development in that area;

(b) any existing deficiency in the provision of water supplies or sewerage services, and the period within which any such deficiency may reasonably be expected to be made good.

(6) Subsection (5) shall not apply if—

(a) the reason or one of the reasons stated as mentioned in that subsection is that the development would be premature by reference to the matters mentioned in paragraph (a) of that subsection, and

(b) the planning decision refusing the permission is made on an application made more than seven years after the date of a previous planning decision by which permission to develop the same land was refused for the same reason, or for reasons which included the same reason.

(7) Compensation under this Part shall not be payable in respect of the refusal of permission to develop land if the reason or one of the reasons stated for the refusal is that the land is unsuitable for the proposed development on account of its liability to flooding or to subsidence.

(8) For the purposes of this section, a planning decision by which permission to develop land is granted subject to a condition prohibiting development on a specified part of that land shall be treated as a decision refusing the permission with respect to that part.

122 No compensation if certain other development permitted

(1) Subject to subsection (2), compensation under this Part shall not be payable in respect of a planning decision by which permission is refused for the development of land if, notwithstanding that refusal, there is available with respect to that land planning permission for development to which this section applies.

(2) Where such permission is available with respect to part only of the land, this section shall have effect only in so far as the interest subsists in that part.

(3) Where a claim for compensation under this Part is made in respect of an interest in any land, planning permission for development to which this section applies shall be taken for the purposes of this section to be available with respect to that land or a part of it if, immediately before the Secretary of State gives notice of his findings in respect of that claim, there is in force with respect to that land, or that part of it, a grant of, or an undertaking by the Secretary of State to grant, planning permission for some such development, subject to no conditions other than such as are mentioned in section 121(2).

(4) This section applies to any development which—

(a) is of a residential, commercial or industrial character, and

(b) consists wholly or mainly of the construction of houses, flats, shop or office premises, or industrial buildings (including warehouses), or any combination of them.

123 Further exclusions from compensation

(1) Where an interest in any land has (whether before or after the commencement of this Act) been compulsorily acquired by, or sold to, an authority possessing compulsory purchase powers (other than statutory undertakers or the British Coal Corporation), that authority, and any person deriving title from that authority under a disposition made by that authority on or at any time after 1st July 1948, shall not be entitled to compensation under this Part in respect of a planning decision made after the service of the notice to treat or, as the case may be, after the making of the contract of sale by reason that the value of that interest, or of any interest created (whether immediately or derivatively) out of that interest, is depreciated by the decision.

(2) Subsection (1) shall apply to land which has at any time on or after 1st July 1948 (whether before or after the commencement of this Act) been appropriated by a local authority for a purpose for which the authority could have been authorised to acquire the land compulsorily as it applies to land in which an interest has been acquired as mentioned in that subsection, with the substitution for the reference to the service of the notice to treat of a reference to the appropriation.

(3) Where at the relevant date any land was or is operational land of statutory undertakers, or land of the British Coal Corporation of a class specified in regulations made under section 90 of the 1947 Act or under section 273 of the 1971 Act or under section 317 of this Act, the statutory undertakers or, as the case may be, the British Coal Corporation and any person deriving title from those undertakers or that Corporation shall not be entitled to compensation under this Part, in respect of a planning decision made after the relevant date, by reason that the value of any interest in that land is depreciated by that decision.

(4) In subsection (3) “the relevant date”—

(a) in relation to land which was such operational land or land of the British Coal Corporation as is mentioned in that subsection on 1st January 1955, means that day, and

(b) in relation to land which (whether before or after the commencement of this Act) became or becomes such operational land or land of the British Coal Corporation on a date subsequent to 1st January 1955, means that subsequent date.

(5) A person shall not be entitled to compensation under this Part in respect of depreciation of the value of an interest in land by a planning decision if he is entitled to compensation by virtue of section 108 in respect of depreciation of the value of that interest by that decision.

124 Grant of planning permission treated as subject to notional condition

(1) This section shall have effect where—

(a) on an application for planning permission for the carrying out of new development of land, a planning decision is made by which the permission is granted, whether unconditionally or subject to conditions; and

(b) the Secretary of State certifies that he is satisfied that particular buildings or works to which the application related were only included in it because the applicant had reason to believe that permission for the other development to which the application related (in this section referred to as “the principal development”) would not have been granted except subject to a condition requiring the erection or construction of those buildings or works.

(2) Where subsection (1) applies, then for the purposes of this Part—

(a) the application shall be deemed to have included, in the place of those buildings or works, such other development of the land on which the buildings or works were to be erected or constructed as might reasonably have been expected to have been included having regard to the principal development; and

(b) the permission shall be deemed to have been granted for the principal development subject to a condition requiring the erection or construction of those buildings or works.

Amount of compensation

125 General provisions as to amount of compensation

(1) Where a person is entitled to compensation under this Part in respect of depreciation by a planning decision of the value of an interest in land, the amount of the compensation, subject to the following provisions of this section, shall be—

(a) the amount by which the value of that interest, in so far as it subsists in land to which this section applies, is depreciated by the decision; or

(b) if less, the amount of the unexpended balance of established development value, immediately before the decision, of so much of the land in which the interest subsists as is land to which this section applies.

(2) Land to which this section applies, in relation to a planning decision, is land which—

(a) constitutes or forms part of the decision area; and

(b) at the time of the decision has an unexpended balance of established development value.

(3) If, in the case of any land to which this section applies—

(a) compensation is payable under this Part in respect of two or more interests in that land by reason of the same planning decision, and

(b) the aggregate amount of compensation payable apart from this subsection in respect of those interests would exceed the amount mentioned in paragraph (b) of subsection (1),

the amount mentioned in that paragraph shall be allocated between those interests in proportion to the depreciation of the value of each of them respectively, and the amount of the compensation payable in respect of any of those interests shall be the sum so allocated to that interest.

(4) Where the land constituting the decision area, taken as a whole, does not satisfy both of the following conditions, that is to say—

(a) that at the time of the decision it has an unexpended balance of established development value; and

(b) that every interest subsisting in it, the value of which is depreciated by the decision, subsists in the whole of that land,

subsection (5) has effect for the purpose of assessing the compensation payable under this Part in respect of any interest subsisting in that land or any part of it.

(5) Where this subsection applies in relation to an interest in land—

(a) the depreciation of the value of the interest by the planning decision shall first be ascertained with reference to the whole of the land which constitutes or forms part of the decision area and is land in which that interest subsists;

(b) the land referred to in paragraph (a) shall then be treated as divided into as many parts as may be requisite to ensure that each such part consists of land which either—

(i) satisfies both of the conditions mentioned in subsection (4); or

(ii) is not land which, at the time of the decision, has an unexpended balance of established development value; and

(c) the depreciation of the value of the interest, ascertained in accordance with paragraph (a), shall then be apportioned between those parts, according to the nature of those parts and the effect of the planning decision in relation to each of them; and

(d) the amount of the compensation shall be the aggregate of the amounts which would be payable by virtue of the previous provisions of this section if the planning decision had been made separately with respect to each of those parts.

(6) In this section “the decision area” in relation to a planning decision means the aggregate of the land to which the decision relates.

126 Assessment of depreciation

(1) For the purposes of this Part, the value of an interest in land, or of an interest in so far as it subsists in particular land, shall be taken to be depreciated by a planning decision (in this section referred to as “the relevant decision”) if, and to the extent to which, that value, calculated in accordance with this section, falls short of what that value so calculated would have been if the relevant decision had been a decision to the contrary effect.

(2) Subject to the following provisions of this section, any such value shall for the purposes of this section be calculated—

(a) as at the time of the relevant decision; but

(b) as affected by that decision, by any grant of planning permission made after that decision and in force immediately before the Secretary of State gives notice of his findings on the claim for compensation in respect of that decision, and by any undertaking to grant planning permission so in force; and

(c) on the assumption that, after the relevant decision and apart from any such permission or undertaking as is mentioned in paragraph (b), planning permission would not be granted for any new development of the land in question, but would be granted for any development of it other than new development.

(3) If in consequence of another planning decision or of an order, being a decision or order made—

(a) before the relevant decision; and

(b) either in respect of the whole or part of the land to which the relevant decision relates or in respect of land which includes the whole or part of that land,

compensation to which this subsection applies has become or becomes payable in respect of that other planning decision or that order, the calculation to be made under this section shall be made as if that other planning decision had been a decision to the contrary effect or, as the case may be, that order had not been made.

(4) Subsection (3) applies—

(a) to any compensation payable under this Part or under Part II or Part V of the 1954 Act or Part VI of the 1962 Act or Part VII of the 1971 Act; and

(b) to so much of any compensation payable under section 107 of this Act, or section 164 of the 1971 Act, or section 118 of the 1962 Act, or under the provisions of those sections as applied by section 108 of this Act, or section 165 of the 1971 Act or section 119 of the 1962 Act respectively, and so much of any compensation to which Part IV of the 1954 Act applied, as is or was payable in respect of loss or damage consisting of depreciation of the value of an interest in land.

(5) In this section “a decision to the contrary effect”—

(a) in relation to a decision refusing permission, means a decision granting the permission subject to such condition (if any) of a description falling within section 121(2) as the authority making the decision might reasonably have been expected to impose if the permission had not been refused; and

(b) in relation to a decision granting the permission subject to conditions, means a decision granting the permission applied for subject only to such of those conditions (if any) as fall within that section.

Claims for and payment of compensation

127 General provisions as to claims for compensation

(1) Compensation under this Part shall not be payable unless a claim for it is duly made in accordance with this section.

(2) Subject to subsection (3), a claim for compensation under this Part shall not have effect unless it is made before the end of the period of six months beginning with the date of the planning decision to which it relates.

(3) The Secretary of State may in any particular case (either before, on or after the date on which the time for claiming would otherwise have expired) allow an extended, or further extended, period for making such a claim.

(4) Regulations made under this section may—

(a) require claims for compensation under this Part to be made in a form prescribed by the regulations;

(b) require a claimant to provide such evidence in support of the claim, and such information as to the interest of the claimant in the land to which the claim relates and as to the interests of other persons in it which are known to the claimant, as may be so prescribed.

(5) Any claim for such compensation in respect of a planning decision shall be sent to the local planning authority.

(6) That authority shall transmit the claim to the Secretary of State as soon as possible after receiving it and furnish him with—

(a) any evidence or other information provided by the claimant in accordance with regulations made under this section; and

(b) such other information (if any) as may be required by or under regulations made under this section, being information appearing to the Secretary of State to be relevant to the exercise of his powers under the provisions of Part III relating to the review of planning decisions where compensation is claimed.

(7) Where a claim is transmitted to the Secretary of State under subsection (6) and it appears to the Secretary of State—

(a) that the development to which the planning decision related was not new development, or

(b) that at the time of the planning decision no part of the land to which the claim relates had an unexpended balance of established development value, or

(c) that compensation is excluded by section 121 or 122,

he shall notify the claimant accordingly, stating on which of those grounds it appears to him that compensation is not payable, and inviting the claimant to withdraw the claim.

(8) Unless a claim transmitted to the Secretary of State under subsection (6) is withdrawn, the Secretary of State shall give notice of the claim to every other person (if any) appearing to him to have an interest in the land to which the planning decision related.

128 Effect on claims of direction under s. 80

(1) Where, in accordance with section 81(4), the Secretary of State gives notice of a direction under section 80 to a person who has made a claim for compensation in respect of the planning decision to which that direction relates, that person, if he does not withdraw the claim, may, at any time within 30 days after the service on him of the Secretary of State’s notice, give notice to the Secretary of State modifying the claim.

(2) Subject to any such modification, where the Secretary of State gives a direction under section 80 in respect of a decision of a local planning authority, any claim made in respect of that decision shall have effect as if it had been made in respect of the decision which, by virtue of the direction, is substituted for the decision of the authority or, as the case may be, as if it had been made in respect of the decision of the authority as modified by the direction.

129 Determination of claims

(1) Regulations under this section shall make provision—

(a) for requiring claims for compensation under this Part to be determined by the Secretary of State in such manner as may be prescribed;

(b) for regulating the practice and procedure to be followed in connection with the determination of such claims;

(c) for requiring the Secretary of State on determining any such claim—

(i) to give notice of his findings to the claimant and to any other person who has made a claim for compensation under this Part in respect of the same planning decision, and

(ii) if his findings include an apportionment, to give particulars of the apportionment to any other person entitled to an interest in land appearing to the Secretary of State to be an interest substantially affected by the apportionment.

(2) Subject to subsection (3), provision shall be made by such regulations—

(a) for enabling the claimant or any other person to whom notice of the Secretary of State’s findings has been given in accordance with subsection (1), if he wishes to dispute the findings, to require them to be referred to the Lands Tribunal;

(b) for enabling the claimant and any other person to whom particulars of an apportionment included in those findings have been so given, or who establishes that he is entitled to an interest in land which is substantially affected by such an apportionment, if he wishes to dispute the apportionment, to require it to be referred to the Lands Tribunal;

(c) for enabling the claimant and every other person to whom notice of any findings or apportionment has been given as mentioned in paragraph (a) or (b) to be heard by the Tribunal on any reference under this section of those findings or, as the case may be, of that apportionment; and

(d) for requiring the Tribunal, on any such reference, either to confirm or to vary the Secretary of State’s findings or the apportionment, as the case may be, and to notify the parties of the decision of the Tribunal.

(3) Where on a reference to the Lands Tribunal under this section it is shown that an apportionment—

(a) relates wholly or partly to the same matters as a previous apportionment, and

(b) is consistent with that previous apportionment in so far as it relates to those matters,

the Tribunal shall not vary the apportionment in such a way as to be inconsistent with the previous apportionment in so far as it relates to those matters.

130 Payment of compensation

Where compensation is determined under section 129 to be payable, the Secretary of State shall pay the compensation to the person entitled to it in accordance with the previous provisions of this Part.

Recovery of compensation

131 Apportionment of compensation

(1) Where, on a claim for compensation under this Part in respect of a planning decision, the Secretary of State determines that compensation is payable and that the amount of the compensation exceeds £20, the Secretary of State shall—

(a) if it appears to him to be practicable to do so, apportion the amount of the compensation between different parts of the land to which the claim for compensation relates, and

(b) include particulars of the apportionment in the notice of his findings under section 129.

(2) In carrying out such an apportionment the Secretary of State shall divide the land into parts and distribute the compensation between them according to the way in which the different parts appear to him to be differently affected by the planning decision.

(3) Subsections (1) and (2) shall apply on a reference to the Lands Tribunal under section 129 with the substitution for references to the Secretary of State of references to the Lands Tribunal (unless the decision of the Tribunal will not affect the amount of the compensation or any apportionment of it by the Secretary of State).

132 Registration of compensation

(1) Where, on a claim for compensation under this Part in respect of a planning decision, compensation of an amount exceeding £20 has become payable, the Secretary of State shall cause notice of that fact to be deposited—

(a) with the council of the district or London borough in which the land is situated, and

(b) if that council is not the local planning authority, with the local planning authority.

(2) Notices deposited under this section must specify—

(a) the planning decision and the land to which the claim for compensation relates,

(b) the amount of compensation, and

(c) any apportionment of it under section 131.

(3) Notices deposited under this section shall be local land charges, and for the purposes of the [1975 c. 76.] Local Land Charges Act 1975 the council with whom any such notice is deposited shall be treated as the originating authority as respects the charge constituted by it.

(4) In relation to compensation specified in a notice registered under this section, references in this Part to so much of the compensation as is attributable to a part of the land to which the notice relates shall be construed as follows—

(a) if the notice does not include an apportionment under section 131, the amount of the compensation shall be treated as distributed rateably according to area over the land to which the notice relates;

(b) if the notice includes such an apportionment—

(i) the compensation shall be treated as distributed in accordance with that apportionment as between the different parts of the land by reference to which the apportionment is made; and

(ii) so much of the compensation as, in accordance with the apportionment, is attributed to a part of the land shall be treated as distributed rateably according to area over that part.

133 Recovery of compensation on subsequent development

(1) No person shall carry out any new development to which this section applies, on land in respect of which a notice (“a compensation notice”) is registered under section 132, until any amount which is recoverable under this section in accordance with section 134 in respect of the compensation specified in the notice has been paid or secured to the satisfaction of the Secretary of State.

(2) Subject to subsections (3) and (4), this section applies to any new development—

(a) which is development of a residential, commercial or industrial character and consists wholly or mainly of the construction of houses, flats, shop or office premises, or industrial buildings (including warehouses), or any combination of them; or

(b) which consists in the winning and working of minerals; or

(c) to which, having regard to the probable value of the development, it is in the opinion of the Secretary of State reasonable that this section should apply.

(3) This section shall not apply to any development by virtue of subsection (2)(c) if, on an application made to him for the purpose, the Secretary of State has certified that, having regard to the probable value of the development, it is not in his opinion reasonable that this section should apply to it.

(4) Where the compensation specified in the compensation notice became payable in respect of the imposition of conditions on the granting of permission to develop land, this section shall not apply to the development for which that permission was granted.

134 Amount recoverable and provisions for payment or remission of it

(1) Subject to the following provisions of this section, the amount recoverable under section 133 in respect of the compensation specified in a compensation notice—

(a) if the land on which the development is to be carried out (“the development area”) is identical with, or includes (with other land) the whole of, the land comprised in the compensation notice, shall be the amount of compensation specified in that notice;

(b) if the development area forms part of the land comprised in the compensation notice, or includes part of that land together with other land not comprised in that notice, shall be so much of the amount of the compensation specified in that notice as is attributable to land comprised in that notice and falling within the development area.

(2) Where, in the case of any land in respect of which a compensation notice has been registered, the Secretary of State is satisfied, having regard to the probable value of any proper development of that land, that no such development is likely to be carried out unless he exercises his powers under this subsection, he may, in the case of any particular development, remit the whole or part of any amount otherwise recoverable under section 133.

(3) Where part only of any such amount has been remitted in respect of any land, the Secretary of State shall cause the compensation notice to be amended by substituting in it, for the statement of the amount of the compensation, in so far as it is attributable to that land, a statement of the amount which has been remitted under subsection (2).

(4) Where, in connection with the development of any land, an amount becomes recoverable under section 133 in respect of the compensation specified in a compensation notice, then, except where, and to the extent that, payment of that amount has been remitted under subsection (2), no amount shall be recoverable under section 133 in respect of that compensation, in so far as it is attributable to that land, in connection with any subsequent development of it.

(5) No amount shall be recoverable under section 133 in respect of any compensation by reference to which a sum has become recoverable by the Secretary of State under section 308.

(6) An amount recoverable under section 133 in respect of any compensation shall be payable to the Secretary of State either—

(a) as a single capital payment, or

(b) as a series of instalments of capital and interest combined, or

(c) as a series of other annual or periodical payments, of such amounts, and payable at such times, as the Secretary of State may direct.

(7) Before giving a direction under subsection (6)(c) the Secretary of State shall take into account any representations made by the person by whom the development is to be carried out.

(8) Except where the amount payable under subsection (6) is payable as a single capital payment, it shall be secured by the person by whom the development is to be carried out in such manner (whether by mortgage, covenant or otherwise) as the Secretary of State may direct.

(9) If any person initiates any new development to which section 133 applies in contravention of subsection (1) of that section, the Secretary of State may serve a notice on him—

(a) specifying the amount appearing to the Secretary of State to be the amount recoverable under that section in respect of the compensation in question, and

(b) requiring him to pay that amount to the Secretary of State within such period as may be specified in the notice.

(10) The period specified under subsection (9)(b) must not be less than three months after the service of the notice.

Supplementary provisions

135 Mortgages, rent-charges and settlements

(1) Regulations made under this section may make provision—

(a) as to the exercise of the right to claim compensation under this Part,

(b) as to the person to whom such compensation or any part of it is to be paid, and

(c) as to the application of any such compensation or any part of it,

in cases where, apart from this section, the right to claim the compensation is exercisable by reference to an interest in land which is subject to a mortgage, or to a rentcharge, or to the trusts of a settlement, or which was so subject at a time specified in the regulations.

(2) In relation to any case where by virtue of any such regulations compensation or a part of it is to be paid to the owner of a rentcharge, the regulations may—

(a) make similar provision to that made by section 25 of the [1943 c. 21.] War Damage Act 1943 (rights of owners of rentcharges as to payments for war damage) but with such adaptations and modifications as may be prescribed, and

(b) provide for disputes arising under the regulations, so far as they relate to rentcharges, to be referred to the Lands Tribunal for determination by it.

136 Calculation of value

(1) In calculating value for any of the purposes of this Part—

(a) subject to subsection (2), rules (2) to (4) of the rules set out in section 5 of the [1961 c. 33.] Land Compensation Act 1961 shall apply with the necessary modifications; and

(b) any mortgage to which the interest to be valued is subject shall be disregarded.

(2) Rule (3) of those rules shall not apply for the purposes of paragraph 15 of Schedule 12.

(3) Where for the purposes of any of the provisions of this Part—

(a) value falls to be calculated by reference to the duration of a tenancy, and

(b) by reason of any option or other contractual right with respect to the determination, renewal or continuance of the tenancy, the date of expiry of the tenancy is not ascertainable with certainty,

that date shall be taken to be such as appears reasonable and probable having regard to the interests of the party by whom the option is exercisable, or in whose favour the right operates, and to any other material considerations subsisting at the time when the calculation of value falls to be made.