Assets Of Community Value - Help & Advice For PROPERTY Owners

The moratorium requirements, as set out in section 95 of the Act, apply only to relevant disposals. “Relevant disposal” is defined in section 96. It means a transfer of the freehold or grant or assignment of a qualifying lease which gives vacant possession of the buildings and other land in question. However they will not apply to all relevant disposals, as some types of relevant disposal are exempt. These exemptions are partly in the Act and partly in the Regulations; the full combined list is set out in Annex A below. The moratorium provisions apply only to disposals, so for example if a building listed as an asset of community value is to be demolished without being sold, the moratorium rules in section 95 do not apply

An owner of a listed site may not make a relevant disposal of their asset during the 6 week interim moratorium period (unless it falls within one of the exemptions or is to a community interest group). This interim moratorium runs from the date the local authority receives notification from the owner of their intention to dispose of their listed asset

Once the local authority has been notified of the intent to dispose, they are required to update the list to show the owner’s intention to dispose and to give the interim and full moratorium end dates, and the end date of the protected period. The nominating community group must be informed. The local authority must also publicise all of these matters in the neighbourhood of the asset in question. It is for the local authority to determine how they do this.

During the interim moratorium period a community interest group may request in writing to be treated as a potential bidder for the asset; this will bring the full moratorium period into force. The community interest group does not have to provide any evidence of intention or financial resources to make such a bid. A community interest group must have one or more of the following structures:

(a) A charity

(b) A community interest company

(c) A company limited by guarantee that is non profit distributing

(d) An industrial and provident society that is non profit distributing (these groups will be renamed as community benefit societies by the 16 Co-operative and Community Benefit Societies and Credit Unions Act 2010 when the relevant provisions come into force)

Once a local community interest group makes a written request to the local authority during the interim moratorium period to be treated as a potential bidder, the owner may not dispose of their asset during the full 6 month moratorium (except as permitted). The local authority must as soon as practicable let the owner know that this request has been received (section 98 of the Act).

There is one type of disposal that may be made during a moratorium. An owner may sell during the interim or full moratorium period to a local community interest group – i.e. one which either did, or would have been eligible to, trigger the full moratorium.

There are a number of types of disposals which are exempt from the moratorium requirements, as set out in section 95(5) of the Act and in Schedule 3 to the Regulations. The full list of exemptions is set out in Annex A.

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We aim to provide an efficient, professional service, utilising our skills, experience and knowledge of the Right To Bid Legislation to your best advantage. We aim to provide honest advice about the merits of your case, and the best means of achieving success.

Indepth knowledge

The Right To Bid legislation, which is part of the Localism Act 2011 , Chapter 5 Part 3. Commonly known as an Asset of Community Value is a highly contested piece of legislation often used for purposes other that the legislators intended.

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Every asset of community value nomination is different, let our team help you formulate a strategy to respond to the nomination.

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As independent Asset of Community Value consultants we analyse how every local authority in England has interpreted this legislation with regards to being a material consideration in planning applications and what in the local authorities opinion actually furthers the social wellbeing and social interests of the local community.

What The Asset of Community Value Regulation Do

Owners Responsibilities

  • Inform the local authority if they wish to sell the listed asset or offer a lease of 25+ years
  • The owner is unable to accept an offer and exchange contracts until the moratorium is finished with anyone other then a qualifying community group.
  • Is FREE to sell the property to whomever they choose
  • Can sell the property at a price of there choosing

Local Authority

  • Inform the nominator and local community groups that the owner has triggered the moratorium.
  • Inform the owner if the full moratorium period has been triggered.

Nominee / Local Community Group

  • Has 6 weeks to decide if they wish to submit a bid to buy the asset
  • If they wish to bid, the full 6 months moratorium period would be triggered.
  • The owner does not have to accept your offer as it's a right to bid not buy.

Annex A

Exemptions

With regard to the following exemptions (with the exception of the first), the local authority will usually not know that the disposal is taking place, because an owner who is confident that the transfer they contemplate will be exempt will not need to notify the authority of intention to sell under section 95(2) of the Act. In some cases an owner may not be sure whether they are going to succeed in making an exempt disposal or not – for instance if they wish to sell the land together with a business sold as a going concern – and may notify the authority as a precaution. In that situation, if they were successful in arranging an exempt disposal, they could enter into a binding contract during the moratorium period. There is no requirement in the legislation that in such circumstances the owner has to explain to the local authority that the disposal is exempt. However it would be helpful for them to do so, and authorities might want to include advice to this effect in any explanation they send to owners about how the moratorium rules work.

The full list of exemptions is as follows. The first is in a different category to the remainder, in that the moratorium rules will have been triggered by notification from the owner, but the sale will be able to take place during the moratorium. Categories (b) to (j) are in section 95(5) of the Act, and (k) to (y) are in Schedule 3 to the Regulations. Item (f) – part-listed land – is partly defined in the Act, and partly in the Regulations.

a. disposal to a local community interest group, which can be made during a moratorium period (interim or full) – see regulation 13(1)

b. disposals which are gifts (including transfer for no payment to trustees by way of settlement upon trusts)

c. disposals by personal representatives in accordance with the will of the deceased owner or under intestacy rules

d. disposal by personal representatives of the deceased owner in order to raise money for matters connected with administration of the estate

e. disposals between family members (“family member” is defined in section 95(7) of the Act as the owner’s spouse or partner and descendants of grandparents – which includes the owner’s own parents, but not the grandparents)

f. part-listed land – i.e. sale of a site only part of which has been listed – where it meets the requirements set out in the Regulations (see concluding paragraph for details) 22

g. sale of land on which a business is carried on, together with sale of that business as a going concern (in such circumstances there would normally be payment separately for the business as a going concern, e.g. the value of equipment, stock and goodwill)

h. disposals occasioned by somebody becoming or ceasing to be a trustee

i. disposal by trustees in connection with the trust, as specified

j. a disposal occasioned by a person becoming or ceasing to be a partner in a partnership

k. transfers made in pursuance of a court order

l. transfers (not in pursuance of a court order) as part of a separation agreement between spouses or civil partners (or ex ditto) including agreements for care of dependent children

m. a transfer (not in pursuance of a court order) for the purposes of any enactment relating to incapacity, with “incapacity” being widely defined to include physical and mental impairment and any interference with capacity to deal with financial and property matters

n. a disposal made in pursuance of a legally enforceable requirement that it should be made to a specific person, including disposals required under planning obligation agreements; and in the case of an option to buy, nomination right, pre-emption right or right of first refusal only if the agreement was entered into before the land was listed (and in this context it should be noted that an option etc entered into after the land is listed would count as a relevant disposal under section 96(4) of the Act)

o. disposals of a description which brings them within the Crichel Down rules (where the land was acquired by compulsory purchase but is no longer needed, and the disposal is by way of return to the original owner or their descendants) – see DCLG Circular 06/04 “Compulsory Purchase and the Crichel Down Rules”: http://www.communities.gov.uk/documents/planningandbuilding/pdf/19188 85.pdf

p. sale by a lender under a power of sale (i.e. where the land was security for a loan)

q. disposal of land under bankruptcy or other insolvency proceedings – the wording is “insolvency proceedings as defined by Rule 13.7 of the Insolvency Rules 1986“, which gives a very wide definition of insolvency proceedings

r. compulsory purchase disposals (see the wide definition of “statutory compulsory purchase” in regulation 1, which includes disposals by a purchaser deemed to acquire the land compulsorily under a statutory blight notice, and also disposals by agreement where a compulsory power could be used) 23

s. the grant of a agricultural tenancy to a successor on the death or retirement of the current tenant pursuant to Part 4 of the Agricultural Holdings Act 1986

t. transfers between connected companies in a group of companies (using the definition of “group undertaking” in section 1161(5) of the Companies Act 2006, modified to restrict “undertaking” to a body corporate)

u. disposals of part-listed land – this is the second part of the definition, the other part being in the Act – section 95(5)(e)5 . See final paragraph below for details.

v. disposals of closed Church of England churches under Part 6 of the Mission and Pastoral Measure 2011: the lengthy process in Part 6 of the Measure involves public consultation, and at the end of it the building will either be sold or leased for an agreed purpose, or demolished, or transferred to the Churches Conservation Trust for preservation – following which outcomes it will once more be possible to list the building and land if appropriate. 

w. disposals by any owner for the purpose of continuing health service provision on the land (in accordance with section 1(1) of the National Health Service Act 2006)

x. a disposal of land to be held for the purpose of a school (excluding independent schools), further education institution or 16 to 19 Academy

y. disposal of land subject to a statutory requirement regarding the making of the disposal, where that requirement could not be observed if the Assets moratorium rules were complied with. 

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