The Localism Act 2011 provides for a scheme called ‘Assets of Community Value’. Under this scheme voluntary or community organisations in England can nominate land or buildings (assets) to which they have a local connection to become an Asset of Community Value (ACV). Local Authorities must maintain a list of ‘community assets’ within their area.
To be listed as an ACV, the asset must be nominated by a qualifying organisation and the Local Authority must consider it “realistic to think” that use of the asset furthers the social wellbeing or social interests of the local community and that the use can continue.
If an asset is listed as an ACV:
- Nothing further will happen unless and until the owner decides to dispose of the ACV, either through a freehold sale, or the grant or assignment of a lease, with a term of at least twenty-five years.
- If the owner of an ACV decides to dispose of it, they will need to provide the Local Authority with written notification of their intention to dispose.
- This notification will trigger a six week moratorium on the sale. During this initial moratorium period a qualifying community group can express an interest in bidding for the ACV.
- If one does, then there is a six-month moratorium (including the initial six weeks), to allow the community group to put a bid together. At the end of this moratorium the owner may sell to whomever they choose and at any price. The community bid doesn’t have to be successful.
- There is no requirement for the owner of an ACV to sell it, nor any restriction on what the owner can do with it while they own it. Whilst the listing does not prevent an owner from applying for planning permission to change the use or redevelop an ACV, it seems likely that the fact that it is listed as an ACV would be a material planning consideration.
In order to achieve a significant community benefit, these provisions do have an impact on the rights of private property owners. Owners of ACVs will be unable to sell property until the relevant moratorium periods have passed and some may find that ACV status reduces the sale value of their property. Those buying potential ACVs should check their local Community Assets Register, which are usually available on Local Authority websites, in order to clarify whether a property is listed. Owners of potential ACV assets which are not yet listed should be vigilant as to the balance of uses that the asset is used for. If community uses remain subsidiary, the property cannot be listed.
Owners of property listed on the Community Assets Register can appeal against its listing. Within a statutory time limit the owner may request a review of that decision and if it is upheld, they may appeal to the First Tier Tribunal. They can also claim compensation if they are able to demonstrate that the value has been reduced by its ACV listing. Our Housing Management Team has recently acted for a client in successfully defending an application by a Residents Association to list their head office as an ACV.
Our client objected to the claim for the following reasons:
- The Residents Association had produced insufficient evidence to show they have a right to nominate the head office as an ACV.
- The Residents Association had failed to evidence how their profits are used which is a necessary requirement of the Act.
- The community use of the head office was ancillary to the main use of the site.
- The Residents Association had failed to show a realistic prospect of continued or resumed use of the head office to enhance the social interests and social wellbeing of the community.
At the time of the claim, our client was due to begin marketing the head office for sale as they had found a new office they wished to purchase. Our client informed the Council of this in their objections as the claim had the potential to derail the deal which would have delayed the improvement in services for vulnerable adults which our client was hoping to achieve by the move to the new offices.
The Council decided that the head office was not an ACV and our client began to market the head office for sale. The Residents Association however filed a new application with additional information again seeking for the head office to be listed as an ACV. This was of great concern to our client as there is no statutory bar on successive applications and our client considered that the Residents Association may be deliberately abusing the statutory process to frustrate a sale of the head office that was in process. The Council however considered that it had a positive obligation to consider any application received. We informed the Council that we reserved our right to judicially review the Council if they entertained the second application, given the second application was based on the same underlying facts as put forward in the first application. We were able to persuade the Council to make their decision quicker than the guidelines they work within and they again concluded that the head office was not an ACV. No further application was received from the Residents Association and the sale of the head office proceeded without the need to judicially review the Council.
The closure of pubs and other local amenities has greatly accelerated in the past decade. One of the contributing factors to this is the permitted development regime which has seen supermarkets acquire pubs to convert them for use as mini-supermarkets without the need to obtain full planning permission. In an attempt to protect pubs and other local amenities from this, community groups have attempted to list pubs and other local amenities as ACVs to protect them from closure.
The Government responded to this and a motion supported by cross party MPs seeking to protect local amenities by amending the General Permitted Development Order 1995 so that any demolition or change of use involving the loss of a pub would require planning permission.
Ministers have now decided to go a step further and in January 2015 announced that they would be implementing secondary legislation at the earliest opportunity to protect pubs. The proposal means that a planning application will be required for change of use or demolition of a pub which is listed as an ACV. An ACV listing could then also trigger planning enforcement where demolition or a change of use takes place without planning permission.
Given the proposed changes are based upon the successful listing of a public house as an ACV; it seems likely that the number of ACV applications will increase significantly.
For further information about this or any other property matter, please contact Triya Maicha.