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Utilities Supplies and Compulsory Powers

Posted on 30th October, 2015

A service provider that is supplying a new or improved service connection may require any one of the following documents to provide it with the relevant permission to enter landowners’ land to install equipment and subsequently inspect maintain and repair it:

Easement.  An easement is a document created by deed and provides for a right for the utilities provider to lay apparatus in land owned by a third party and a subsequent right to access the land to maintain, repair, renew etc the apparatus.   An easement is usually granted for a term in perpetuity.   A deed of easement creates a legal interest in land.  A deed of easement will bind a future purchaser of the land who will purchase subject to any restrictive covenants contained in the document such as covenants not to build over the apparatus.

Wayleave Agreement.    A wayleave is a more informal document similar to a licence and does create a legal interest in land.  It is a document which can be entered into between the utilities provider and a third party e.g. a developer.  The party granting the wayleave does not need to own land in order to grant the document (as would be the position with a deed of easement).  A wayleave agreement does not require registration at Land Registry and will not bind a successor in title to the landowner/developer.  It is often the case that a wayleave agreement can be terminated on notice which is not the position with a deed of easement which usually considers for a term in perpetuity with no provision for early termination.

Lease.   Occasionally a utilities provider will require exclusive possession of land in order to lay or install its apparatus.  This is often the position where an electricity substation or perhaps a sewage treatment station is to be installed.    In these circumstances a lease will be required.  If there are pipes or cables which will run through the landowners’ surrounding land outside of the area being leased then the lease will need to include easements allowing the utilities supplier to use land outside of the area exclusively demised for these purposes.

It is often the position that a developer or landowner will seek to negotiate with the utilities supplier with regard to the form of documentation required and the content of such documentation.    In some instances however negotiation proves unsuccessful and in these circumstances a utilities supplier may seek to rely on its statutory powers to obtain an easement, wayleave or lease.    This is often a last resort for a utilities supplier as the procedure is often expensive and slower and governed by statute.  The compulsory purchase powers for relevant suppliers are contained in the Electricity Act 1989, Gas Act 1986 and Water Industry Act 1991 respectively.

In the event that a utilities supplier is required to proceed via the compulsory powers route it will follow the procedure set out in the relevant governing statue (above) and the procedure set out in the Acquisition of Land Act 1981 and Compulsory Purchase Act 1965.  In general, the compulsory purchase procedure requires the utilities provider to:

  1. Determine the land and rights that are required and demonstrate that having regard to all circumstances compulsory purchase is justified;
  2. Undertake an investigation to determine all interested that will be affected by use of the compulsory purchase powers.  This process includes a requirement to submit statutory notices to landowners affected by the procedure;
  3. Publicise a draft order.  Any objections to the order must be received within 21 days from the date of publication.  If no objections are received the order can be confirmed however even if the order is confirmed a further 6 week period allowing challenges to take place exists.  If no objections are received the order is made final.  If objections are received then a public inquiry or hearing is held.

It should also be noted that electricity service providers have a statutory power to compulsorily acquire a wayleave.  If an electricity service provider relies on these powers then compensation will be payable to the relevant landowner.

It is worth noting that a gas supplier has no statutory right to acquire a wayleave but does have compulsory purchase powers for acquisition of land/leases or deeds of easement.


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