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  1. Wealth
June 29, 2017

Can government seize private properties?

By Spear's

If government were ever to consider requisitioning investment properties in London to rehouse Grenfell Tower victims, it would infringe upon the basic tenets of Human Rights law, writes Rebecca Waterhouse

In the wake of the tragedy at Grenfell Tower, is has been suggested that the government should requisition local empty housing owned by private individuals for those left homeless. Whatever your political leanings, the suggestion does attract sympathy. However, whether the government could requisition empty investment properties is a different question.

In exceptional circumstances, historically, emergency legislation has provided the government with powers to seize property for the national benefit. During the two World Wars many stately homes, perhaps most famously Bletchley Park, were requisitioned as part of the war effort. Unsurprisingly, emergency legislation can only be enacted in an emergency situation – an event which threatens serious damage to human welfare in a place in the UK, or an event or situation which threatens serious damage to the environment of a place in the UK. Although a tragedy such as the Grenfell Tower could rightly be characterised as an emergency situation, for any legislation to be enacted it must be shown that existing legislation is insufficiently effective, or unreliable without the risk of serious delay.

Under current legislation, a number of public bodies, including local authorities and the Homes and Communities Agency, have powers to acquire land compulsorily. According to government guidance, it is intended that these powers are used as a last resort to secure land needed for the implementation of projects where there is a strong public interest justification to ‘deliver social, environmental and economic change.’

The Homes and Communities Agency have compulsory purchase powers to ‘improve the supply and quality of housing’ and ‘support the regeneration of communities’ and local housing authorities have powers to acquire land and properties to provide housing accommodation.  However, in all cases it would need to be shown that there was adequate justification to exercise such powers, and evidence of a long-term strategic need for the land would need to be provided.

The homes which are the subject of media discussion in South West London are the empty ones. Residential properties held as investments, unoccupied. Local authority powers do allow for the purchase of empty properties, as a last resort, where there is no other prospect for bringing the property back into residential use.  But before any compulsory purchase may be considered the owner of the property must be encouraged to restore it to full occupation.

Where such Government interference in private property and private life is considered, the Human Rights Act also affords protections to the individual. In particular, Article 1 of Protocol 1 of the European Convention on Human Rights, which is implemented into UK law by the Human Rights Act, provides that an individual is entitled to the peaceful enjoyment of his possessions. In cases where compulsory purchase orders have been considered by the courts, it has been held that for such an order to be within the law a balance must be struck between the rights of the individual property owners and the rights of the community. In determining a fair balance, the availability of compensation reflecting the value of the property acquired by the authority is crucial.

In the event of a compulsory purchase order, the legislation provides that property owners are to be compensated for the loss of their land – a complex calculation is made to represent ‘the value of the interest’ in the land, considering the open market value of the land as well as additional compensation for loss and disturbance.

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It seems as though, whatever the media outcry, the current rules would make it very difficult for local authorities to seize private residences fit for habitation from individual property owners. Emergency legislation is highly unlikely in peacetime and a move by the government to requisition residential property under emergency legislation in this way would be hugely controversial.  Without paying an appropriate market price for empty properties, the government would be unable to force the sale of properties from private individuals without risking infringing established principles of Human Rights law – and considering the average property price in the Royal Borough of Kensington and Chelsea is approximately £2million, requisitioning privately owned housing could quickly turn into a very expensive exercise.

Rebecca Waterhouse is an associate at boutique private wealth law firm Maurice Turnor Gardner LLP 


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