Assets of Community Value - further explanation

The Community Right to Bid Provisions

The Community Right to Bid is one of the new community rights set out in the Localism Act 2011. It is also known as assets of community value.

The Assets of Community Value (England) Regulations 2012 came into force on 21 September 2012.

Rights granted

The purpose of the Community Right to Bid provisions is to allow communities time to prepare bids for land and property assessed as being of benefit to the community when those assets come up for disposal.

Local community groups and parish councils will be able to nominate privately and publicly owned land and property for inclusion on a list of assets of community value. The list will be maintained by Bradford Council, which will also be responsible for managing the process for determining whether a nomination of a property as an asset of community value is successful.

Owners of listed land and property are unable to dispose of their property without first notifying the council. This triggers a six week moratorium on disposal during which local community groups and parish councils are able to express an interest in bidding for the property. If no expressions of interest are received the owner is free to dispose of the property at the end of the six week period. If an expression of interest is received the initial six week moratorium extends to six months to allow community groups and parish councils to prepare to bid for the property or to negotiate with the property owner. At the end of the six month period the property is removed from the list and the owner is able to sell the property to who ever they want and by whatever means they wish.

Please note that the sale of a listed property to a community group/organisation can proceed during the moratorium period provided that the purchaser meets the Act’s definition of community group.

Rights not granted by the Act

The Community Right to Bid provisions do not:

• give community groups or parish councils a right of first refusal when listed community land and buildings come up for sale 
• give community groups or a parish council the right to purchase land and property listed as assets of community value at a reduced price ie less than market value 
• compel a property owner to sell to a community group or parish council. Once the procedures set out in the Act are complied with property owners are free to sell their property to whomever they wish 
• restrict how a property owner can use their property.

What is an Asset of Community Value?

Land or property falls within the definition of asset of community value where its current primary use furthers the social wellbeing or social interests of the local community, and where it is realistic to think that this use will continue. Social interests include culture, recreation and sport. A property will also qualify when its main use in the recent past meets the definition, and it is realistic to think that its use may again fall within the definition within the next five years (whether or not in the same way as before). Communities nominating an asset will need to show that the main use of the property meets the definition and that it is realistic to think that the main use of the asset will continue to meet the definition.

Certain buildings or land or excluded from the definition of asset of community value and it is for the Local Authority to determine where the regulations apply to a particular property. Land and property excluded from the definition of asset of community value includes premises that are wholly residential including gardens, outbuildings and associated land, licensed and some unlicensed caravan parks and operational land and property of statutory undertakers.

Who can nominate an asset to be listed?

Local authorities cannot list land on their own initiative – it must be nominated. Nominations to list an asset as being of community value can be made by:

• a local voluntary or community group that is incorporated – this means it has a separate legal status from its members 
• A local voluntary or community group that is not incorporated but has at least 21 members who appear on the electoral roll within Bradford Council or a neighbouring authority 
• a parish council 
• neighbouring parish councils – if a parish council borders an unparished area it may nominate asset within that area 
• community interest groups with a local connection which has one of the following structures: 
  • A charity 
  • A community interest company 
  • A company limited by guarantee that is non profit distributing 
  • An industrial provident society that is non profit distributing.

For a local group to be able to nominate it must be able to demonstrate that its activities are wholly or partly concerned with the local authority area within which the asset is located or with a neighbouring authority (which shares a boundary with Bradford).

How to nominate land or property as being an Asset of Community Value.

Those nominating will be asked to provide details of the property in question, their organisation and why they believe that the land and property meets the asset of community valuation definition.

You can find the Asset of Community Value Nomination Form on this page.

Officers will determine whether the applicant meets the criteria set out in the Act and confirm that the nominated property is situated within Bradford District. Only applications that meet the initial criteria set out in the Act ie nominating organisation, location of asset within Bradford District and a current or recent use which is not an exempt use will be taken forward for consideration.

The Council will have a statutory duty to notify owners and occupiers of the receipt of a nomination for a property for inclusion in the list of Assets of Community Value.

Appeals

Property owners (but not occupiers) may appeal against the Council’s decision to list their property as an asset of community value. In the first instance the property owner should ask the council to review its decision. If the council upholds its decision to list the owner may appeal to the First-Tier Tribunal.

As outlined above, it is proposed that the decision to list a property and the review of that decision will be carried out by different parties within the council.

There is no provision within the Act for nominators to challenge a decision not to list a property or decision to remove a property from the list following a review. However, the council will be required to provide nominators with reasons why their application is unsuccessful or why a property has been removed from the list. It is expected that government will publish guidelines for the nomination and appeals procedure.

List of Assets of Community Value and Unsuccessful Nominations

Details of properties that have been nominated will be added to the Council’s List of Assets of Community Value which is published on the Council’s website and will also be available from the offices of Estate Management. 

Land and property will be removed from the list after 5 years or if it's sold within the 5 year period.

On adding a property to the list of assets of community value the Council will register a land charge against the title of the property. Owners are prohibited from selling the freehold of the property or from granting or assigning a lease which was originally granted for 25 years or more without notifying the Council of their intention to do so.

The council will notify the following of the decision to add or remove an asset of community value from the list:

1. The land/property owner. 
2. The occupier of the land/property if different from the owner 
3. The person who nominated the land/property for inclusion in the list.

The property owner will be advised of the consequences of their property being included in the list and of their right to ask for the decision to be reviewed. Owners cannot dispose of their property during the moratorium period (save for exemptions specified in the Act and regulations).

View the List of Assets of Community Value

The implications of listing property as an asset of community value

The listing of land and property as an asset of community value effectively imposes a moratorium on the sale of the property with owners of listed assets required to notify the council of their intention to dispose of the property.

The owner’s notification of intention to sell triggers an interim moratorium period of six weeks during which the owner is prohibited from selling the property. On receipt of the notice of intention to sell the council will amend the list of assets of community value to record that the notice has been received and dates between which the interim moratorium period will run; advise the person who originally nominated the property of the owner’s intention to sell and publicise that the notice has been received within the area that it is situated inviting expressions of interest from community groups or parish councils who wish to bid for the property.

If no expressions of interest are received within the initial moratorium period the owner is free to dispose of the property. However, if an expression of interest is received from a qualifying community group or parish council the initial moratorium period extends to a full moratorium of six months from the date that the owner submitted the notice to sell to the council. The purpose of the six month moratorium is to allow community groups time to raise funds to enable them to bid for the property.

During the full moratorium period owners are prohibited from selling their properties save for the exception that the property may be sold to community groups or parish councils that meet the definition of community group referred to above.

On expiry of the full moratorium period the owner is able to dispose of the property to whoever they want and has a period of 18 months from the date when the original notice of intention to sell was served in which to complete a sale before additional moratorium periods can be triggered.

If an owner does not comply with the moratorium period any sale which occurs during a moratorium will be deemed as not have taken place.

Exemptions to the moratorium on sale

Certain sales of listed assets are exempt from the moratorium periods. These include where a disposal is a gift; a disposal is made between members of the same family; where the land or building being sold forms part of a bigger estate or the sale is to a new owner who will continue the same business.

Compensation payable to owners of listed assets

The council is required to administer a compensation scheme and determine applications for compensation where a property owner incurs loss from delays in being able to dispose of property due to the interim and/or full moratorium periods. Claims for compensation may also be made in respect of losses incurred as a result of land or property being listed.

The compensation scheme does not extend to public bodies.