Property

The Community Right to Bid…. Two years on

The House of Commons Communities and Local Government Committee has reported on how the Community Right to Bid has worked in the 30 months since it was introduced in September 2012.

The right gives community groups the right to nominate something as an asset of community value (“ACV”). The local authority then decides whether or not to list the nominated asset as such. If it is listed, the owner must wait for either six weeks or six months to elapse before selling. During this moratorium, community groups have an opportunity to bid for the asset in question. If anyone expresses interest in the six week period, the owner must wait the full six months before exchanging contracts. The legislation does not entitle a bidder to force the owner to sell either to it or anyone else.

The DCLG says that 1,800 assets have been listed. (See Box)

Type of asset Proportion of total listed
Pub

31%

Other

12%

Community centre

8%

Playing field

5%

Church

4%

Community shop, library, car park, allotment, school, sports ground, park

3% each

Post office, other public space, land, village green

1% each

It seems that the longer moratorium period has been triggered 122 times, but that only 11 acquisition’s by community groups have resulted. The report, recommends some reforms, in the light of experience.

Permitted Development Rights (“PD rights”) The Government has already set its face against an ACV forfeiting its PD rights under planning law; once it has been listed; arguing that community groups can try to persuade the LPA to make an Article 4 direction which would have the same effect. However, the report strongly advocates the forfeiture of PD rights for “the duration of the listing of five years, whichever is the longer” even if compensation becomes payable as a result.

Material planning consideration  Currently authorities may treat listing as an ACV as a material planning consideration. The Committee thinks listing ought invariably to be one.

Nine month moratorium period – Apparently six months is not long enough for bidders to mount a credible bid. The Committee thinks the longer moratorium period should be extended to nine months. Landowners may be glad to hear that, on that basis, the Committee declined to support a suggestion that the bidding community group should have the right to by the property unless outbid by a third party!

Early termination of moratorium period – If a community group abandons its bid the owner still has to wait until the moratorium expires before exchanging contracts. The report recommends that the moratorium should expire earlier if the community bid fails.

Appeal by disappointed nominator – An owner can appeal a decision to list an asset. But the nominating body has no such right if the authority declines to list. The Committee thinks nominating bodies should be able to appeal against refusals to list.

Exemption for sales of going concerns – The ACV legislation exempts sales of going concerns. CAMRA argued that this is abused by developers of pubs who have no medium or long term intention to run the pub. The Committee recommends closure of what it sees as a “loophole”.

The ACV legislation is due to be reconsidered by the Government later in 2015. Given that it’s not a controversial issue from a party political point of view, it seems likely that the Committee’s recommendations may see a lot more daylight, whatever the result next May.