InsightsInsight - Agriculture and Rural, Commercial Property - POSTED: November 25 2021
Asset of Community Value guidance for landowners and purchasers
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An Asset of Community Value (ACV) is a building or other type of land which furthers the social wellbeing or social interests of the local community, or could do so in the future.
The law on ACVs was introduced to allow communities the opportunity to buy assets important to them, such as village shops or community halls, if they are put up for sale.
Communities are allowed a moratorium period where they can attempt to raise capital and bid for the land if the landowner wants to sell it.
In this article, we provide more detail on what ACVs are and the restrictions in place for landowners whose land or assets may be classed as an ACV. This guidance will also be of value to purchasers buying an ACV, such as a pub or community building.
What is an Asset of Community Value?
Although the legislation does not specifically define an ACV, section 88 of the Localism Act 2011 defines ‘land of community value’ as land in a local authority’s area that the local authority considers having community value.
This is on the basis that either:
- The primary current use of the land furthers the social wellbeing of the local community.
- The land can realistically continue to be used in a way that will further the social wellbeing or social interests of the local community (even if this is a different use to previously).
- The land has previously been used for the purposes of furthering the social wellbeing or interests of the local community in the recent past and can realistically be used for this purpose again within the next five years.
Section 88 defines ‘social interests’ as cultural, recreational and sporting interests. This means community buildings, buildings or land with historic value, pubs, sports grounds, local parks and car parks could all be ACVs.
Lists of Asset of Community Values
Local authorities are required to maintain two lists for ACVs:
- A list of land in the local area that is of community value
- A list of land that was unsuccessfully nominated for community value
These lists must be available for free inspection and a local authority must provide a copy of the lists on request.
Can you sell an Asset of Community Value?
If you are an owner of land listed as an ACV, you cannot enter into a ‘relevant disposal’ of the land unless three conditions, detailed in s95 of the Localism Act 2011, are met.
- The first condition is that the person who wants to enter into the disposal must have notified the local authority in writing.
- The second condition requires either the interim moratorium period to have ended without the local authority receiving a written request from any community interest group to be treated as a potential bidder, or the full moratorium period has ended.
- The third and final condition is that the protected period has not ended.
These rules apply unless the disposal is an exempt disposal.
Asset of Community Value regulations – guidance for landowners
The interim moratorium period is six weeks from the date the local authority receives notification of the proposed disposal. During this period you can only dispose of the land to a community interest group.
If no request is made by a community interest group within this six-week period, you can dispose of the land at the end of the period. There will not be a moratorium for the rest of the protected period.
If a request is made by a community interest group, the local authority must inform you that this request has been made and the full six-month moratorium period will operate.
The full moratorium period is six months from the date the local authority receives notice of the intention to dispose of the property in satisfaction of the first condition above. During this period, you can market the land and negotiate sales. You must not, however, exchange contracts or enter into a binding agreement to exchange, unless it is with a community interest group.
The protected period is 18 months from the date the local authority receives notification of a proposed disposal in accordance with the first condition, mentioned above.
Can I demolish an Asset of Community Value?
The ACV guidance notes say that the moratorium period will only be triggered by a disposal of the land and states the restrictions found in s95 will not apply.
Therefore, if you own ACV land, you will be able to demolish a building listed as an ACV. This is provided you have the other necessary consents, without an obligation to rebuild or moratorium period arising.
Summary and further support
The law on ACVs provides the public with more protection and the ability to protect those pieces of land that are important to their community.
Although not an automatic right or first refusal, this legislation does provide local communities with some opportunity to preserve areas important to them in their local area.
If you are a landowner with any assets which could fall under the scope of an ACV, or wishing to purchase an ACV, we advise that you familiarise yourself with the correct processes and procedures outlined in this article.
For further guidance on the issues covered in this article, please get in touch with our Commercial Property team today.
This content is correct at time of publication
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