There is generally a BIG fear amongst investors about Compulsory Purchase Orders(CPO) – which is where the local council decides to purchase your property because of regeneration related projects. Without doubt, when you are buying properties you certainly have to do your research – this is vital. However, you can also be in ownership of a property and then receive a CPO even though originally there was no indication that the council were looking to remove properties in your area. In some cases your street may not be included in the CPO list and then a change of strategy in the regeneration may change this situation. In my case it happened a few years back when the CPO area was extended by several streets. This included one of my BTL’s.
This is not a bad thing as long as you have kept your property in good condition..
So here is a VERY important TIP to all those property investors who currently own property that may be subject to a Compulsory Purchase Order (CPO).
When you receive notification from the local Council that they wish to initiate a CPO on your property you must engage a surveyor to act on your behalf and have the house assessed at fair market price. Your surveyor can present your case to the council to achieve the best price.
Here is the BIG one – on completion you are also eligible for:
- Landlords Loss Allowance (other terms are used) this can be around 7.5% of the sale price.
- Disturbance Allowance – which includes costs of valuation for another property plus all related legal costs
- Relocation allowance.
There is a lot more to the process – but this is something your surveyor/valuer can help you with. These three allowances alone can add several thousand pounds onto the sale proceeds that you receive – CHA CHING!
The key is to always keep your property in good market condition
