The acquisition of land by parish councils

LEGAL MATTERS

Introduction

The purpose of this article is to describe why parish or community councils would want or need to acquire land and the legal and practical implications of doing so. It is part one of a series of three articles dealing with the acquisition, holding and disposal of land by parish councils.

In making decisions to acquire land, a parish council must consider and comply with the following principles of administrative law.

Administrative law framework – proper and valid decision-making

Valid exercise of functions

The valid exercise of a function must:

fall within the statutory envelope (functions);
be properly made by someone authorised to make the decision (authority);
follow the rules on proper decision-making.

Functions: duties and powers

A local authority is a creature of statute and can only do what statute expressly allows or implies. Functions are duties (obligatory requirements – “must” or “shall”) and powers (permissive – “may”).
The scope of a council’s powers will be materially affected by its ability to exercise Section 1 of the Localism Act 2011 (eligible councils only).

Authority

There must be authority for the transaction.
Decision-making can be through full council.
Decisions can be delegated to a committee or by a committee to a sub-committee or to an officer, but not to an individual member.

A valid decision must:

be reached in a procedurally correct way: specific steps and requirements, decision-making in public or in confidential session; and
itself be reasonable.

“Reasonable” means a decision which:

must take of account of proper considerations;
must leave out of account irrelevant considerations;
must be made for a proper purpose;
must be proportionate as to the purpose to be achieved and the expenditure involved;
must have regard to the council’s fiduciary duty to its taxpayers;
must be fair – avoiding bias or the appearance of bias and taking account of opposing views.

A decision-maker must have regard to certain specific statutory duties (e.g. reduction of crime and disorder, public sector equality duty) and must consider specific issues regarding consultations and legitimate expectation.
Decisions should be properly documented and justified by reasons in reports and background papers and recorded in minutes or records of delegated decisions.
1. The exercise of powers will be subject to the general law e.g. as to the obtaining of planning permission or the obtaining of consents of other bodies e.g. the Secretary of State, the Charity Commission.

What do we mean by land?

The Local Government Act (LGA) 1972 S270 defines land as including “any interest in land and any easement or right in, to or over land”. Land also includes buildings and structures attached to the land but not caravans or temporary structure (e.g Portakabins) which rest on the land. A licence, which is a contractual right to use land, is not an interest in land. For certain purposes, e.g. under the Town and Country Planning (General Permitted Development) Order 2015 (as amended), buildings can be treated separately from the land on which they stand, but this does not affect land law.

Acquisition, holding, use, appropriation and disposal of land

A local authority may only acquire, hold, use, develop or dispose of land within the statutory framework. Even if the transfer or conveyance by which the land was acquired does not specify the powers under which the land is acquired or is to be held, the land will be deemed to have been acquired or held for a statutory purpose.
The purposes for which land is acquired or held are crucial to the purposes for which it can be used or developed or the freedom with which it can be disposed of.
The statutory powers should be specified in any transfer upon acquisition, e.g. pursuant to S124 of the LGA 1972 or pursuant to S9 of the Open Spaces Act 1906.
Land may only be acquired for the council’s statutory purposes.
The LGA 1972 makes the following provisions:

124 Acquisition of land by agreement by parish …. councils

(1) For the purposes of:

(a) any of its functions under this or any other public general Act, or

(b) the benefit, improvement or development of its area,

a parish council may acquire by agreement any land, whether situated inside or outside its area (see specifically burial grounds and allotments).

125 Compulsory acquisition of land on behalf of parish … councils

(1) If a parish council is unable to acquire by agreement under S124 above and on reasonable terms suitable land for a purpose for which it is authorised to acquire land other than:

(a) the purpose specified in S124(1)(b) above, or

(b) a purpose in relation to which the power of acquisition is by an enactment expressly limited to acquisition by agreement, it may represent the case to the council of the district in which the parish is situated.

(2) If the district council is satisfied that suitable land for the purpose cannot be acquired on reasonable terms by agreement, it may be authorised by the Secretary of State to purchase compulsorily the land or part of it; the Acquisition of Land Act 1981 shall apply in relation to the purchase.

(4) The order shall be carried into effect by the district council but the land when acquired shall be conveyed to the parish council; and accordingly in construing for the purposes of this section and of the order any enactment applying in relation to the compulsory acquisition, the parish council or the district council, or the two councils jointly, shall, as the case may require, be treated as the acquiring authority.

(5) The district council may recover from the parish council the expenses incurred by it in connection with the acquisition of land under this section.

Examples of land which can only be acquired by agreement include open space under S9 of the Open Spaces Act 1906. Open space land cannot be acquired compulsorily for statutory allotments (S41 of the Small Holdings and Allotments Act 1908).
Other specific powers under which land may be acquired include Sections 2–9 of the Open Spaces Act 1906, S25 of the Small Holdings and Allotments Act 1908 (allotments), S19 of the Local Government (Miscellaneous Provisions) Act 1976 (recreational facilities), S57 of the Road Traffic Regulation Act 1984 (parking places) and S50 of the Food Act 1984 (markets).
Trustees of public recreation grounds or allotments may, with the consent of the Charity Commission, transfer such land to a parish council (whether or not the land is subject to charitable trusts): S298 of the Charities Act 2011.
A local authority may accept, hold and administer gifts of land for any of its functions: S139 of the LGA 1972.
Land may be acquired by adverse possession – 12 years for unregistered land, 10 years for registered land. The council must have treated the land as an owner: maintaining it, fencing it, repelling trespassers, occupying without force, not secretly, not with another’s permission.
Consideration may be in money or money’s worth and constitutes capital expenditure. Consideration can be financed from revenues, capital reserves or borrowing. A local authority cannot secure borrowing by way of mortgage of land: S13 of the Local Government Act 2003. Acquisition under compulsory powers or against the background of compulsory powers will engage the compensation code under the Land Compensation Acts.

Methods of acquisition

Acquisition may be freehold (purchase) by way of transfer or exchange or leasehold by grant or assignment or the grant of a right, e.g. an easement. Acquisition may accrue by operation of time, e.g. accretion or adverse possession. Acquisition may be achieved by appropriation.
Transfers of land, leases of more than seven years and freehold easements must be registered at the Land Registry by the transferee or lessee. Leases will also be noted on the landlord’s freehold title. Easements will appear in the property register of the title to the land benefited and in the charges register of the land burdened.
A lease connotes exclusive possession and may be subject to the protection of the Landlord and Tenant Act 1954, Part II. A lease which confers an estate in land is to be distinguished from a licence which is a contractual right to use land.
A parish council may enter into management agreements for the regulation of land of which it has taken control even if it has not acquired an interest: see e.g. S10 of the Open Spaces Act 1906.
There are compulsory powers of control and maintenance of closed churchyards: see S215 of the LGA 1972.
Licences do not constitute an interest in land. They are contractual rights to use land and are personal to the licensee. Licences do not run with the land. It is important that a licence does not confer exclusive possession as this may constitute a lease.
Appropriation is the transfer from one statutory purpose to another.
There cannot be any implied or informal appropriation of land.
The LGA 1972 provides:

126 Appropriation of land by parish … councils

(1) Any land belonging to a parish council which is not required for the purposes for which it was acquired or has since been appropriated may, subject to the following provisions of this section, be appropriated by the council for any other purpose for which the council is authorised by this or any other public general Act to acquire land by agreement.

Appropriation of open space land is treated as if it were a disposal of the land in question and the statutory advertisement procedure is engaged: S127 of the LGA 1972. Appropriation of a common, village green or public open space to land for statutory allotments cannot proceed without an order by the Secretary of State: S28 of the Land Settlement (Facilities) Act 1919.

Practical points to note – general

When approaching property transactions, you should bear in mind the following general points:

Carry out a full appraisal of the proposal and the terms offered or wanted.
Establish what the terms are.
The authority should be looking for the best price when buying or selling.
Are the necessary statutory powers available?
Take professional valuation and legal advice.
Ensure that decision-making is appropriate and documented and that appropriate authorities are in place. NB: the importance of delegated authority.
There is a project plan, including a timetable, in place and a person has been appointed to lead.
The clerk is properly equipped and authorised to act as the single point of contact with solicitors, etc.
An adequate budget is approved to cover consideration, professional fees, fees for searches and the Land Registry, Stamp Duty Land Tax (SDLT), etc.
Ensure proper reporting mechanisms.
Do not underestimate costs or timescales, especially where there are pushy solicitors, prospective tenants playing games or unrepresented landlords or tenants.
Do not underestimate the significant work involved in dealing with Commercial Property Standard Enquiries (CPSEs).
Managing the process – note the difference between agreeing terms and handling the legal process.

Practical points to note – acquisitions

For acquisitions you must consider the following:

Is the statutory purpose clear?
What are the terms?
Agreements for the acquisition and sale of land must be in writing and signed.
Acquisitions by local authorities need not be preceded by a contract.
There must be a thorough investigation of title.
Full searches are the norm unless the authority is familiar with the land.
Transfer/lease must be executed as a deed under the council’s common seal or with signatures of two councillors.
Transfers of land and leases of over seven years must be registered at the Land Registry.
SDLT could be payable.
Who is paying what costs?
Look at insurance and changes to the council’s insurance schedule, asset and risk registers.
Are arrangements in place for the management and maintenance of the asset?
Beware restrictive covenants, overage clauses and rights of pre-emption.
Beware principal authorities seeking to offload land and also be aware of statutory allotments.

Ian Davison has worked in and for local government for over 40 years. He is a partner in Surrey Hills Solicitors LLP. Before joining private practice, he was a chief officer providing and managing a wide range of services including legal, democratic, scrutiny, member support, licensing and project management, and he has acted as Monitoring Officer and Electoral Returning Officer. He was also a clerk to a parish council. Ian is legal advisor to the Kent, West Sussex and Hampshire Associations of Local Councils and SERCAF. He is also a contributor to the local government, open spaces, recreational leases and highways titles of the leading professional practitioner work the Encyclopedia of Forms and Precedents. For more information, see www.surreyhillssolicitors.co.uk

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Written by Ian Davison, partner, Surrey Hills Solicitors LLP
As appeared in Clerks & Councils Direct, July 2022
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