Assets of Community Value - Beware the Dangers
The Localism Act 2011 gave parish councils and community groups the right to apply to the Local Authority for property to be designated as an asset of community value (ACV).
If the LA considers that the land in question furthers the social wellbeing or social interests of the local community (a wide test), then they can decide to list the land as an ACV and add it to the public register of ACVs that all LAs are obliged to maintain.
Many hundreds of properties have already been listed as an ACV in England and Wales, ranging from village halls, public houses or local parks, to large Premier League football stadia such as the homes of Manchester United, Liverpool and Newcastle United.
Once a property has been listed as an ACV, the owner must follow a statutory process when seeking to dispose of it (unless the proposed transaction falls into one of the few classes of exempt disposals that do not require compliance with that process).
The owner must give the LA notice of any intended disposal and there is then a six week moratorium period during which no disposal can be made. During that period, the LA publicises the intended disposal and the community group that applied for ACV listing for the property may express an interest in being treated as a bidder for it. If that happens, there is a further six month moratorium during which the landowner may only dispose of the property to the community group.
At the end of the six month moratorium, the landowner is then free to dispose of the property to any party it chooses for a period of one year. If no disposal is made during that period, then the process would need to be followed once again for future disposals.
It must be remembered that ACV rules give the community group a right to bid for property, but do not give any party a right of first refusal and nor do they oblige the landowner to dispose of its property to any particular party. The ACV rules can therefore be a valuable tool for local communities but are not fatal to a landowner's plans. The rules can delay, but not necessarily frustrate, proposed sales or development of land.
As a potential buyer or seller of land, it is important that your solicitors check the records of both the Land Registry and the LA when considering a disposal. Here at VWV we are fully equipped to deal with transactions involving ACVs and any other type of property.