Asset of Community Value

Part 5 of Chapter 3 of the Localism Act 2011 and the Assets of Community Value Regulations 2012, effective September 21, 2012, introduced the concept of ‘assets of community value’.

This scheme empowers local community groups to potentially assume control over certain assets and amenities in their vicinity by affording them time to prepare a bid. According to Don Foster MP, the goal is to enable local authorities to collaborate with communities in safeguarding buildings and amenities that hold significant local importance to residents and workers.

Under these provisions, communities have the right to nominate buildings or land as assets of community value. Nominations may be made by voluntary or community groups, such as parish councils, but not by individuals or local authorities. Following an 8-week period, the local authority assesses the nomination against the criteria outlined in Section 88 of the Act. An asset can be listed as an asset of community value if its primary use contributes to the community’s social well-being or interests, encompassing cultural, sporting, or recreational pursuits.

Upon a successful nomination, the local authority must add the asset to a list of community value assets, notify relevant parties (including the parish council), and register it in the local land charges register. Assets not meeting the criteria or falling into excluded categories are placed on a separate list of nominated but not listed assets.

Owners have the right to object to their property’s listing and can seek an internal review by the local authority. If a disagreement persists, they may appeal to an independent tribunal.

Once listed, an asset remains inactive until the owner decides to sell it. The owner must wait for a specified moratorium period to elapse before disposing of the asset. This includes an interim 6-week period during which community interest groups can express their intention to bid. If such a request is made, a 6-month moratorium is triggered by the owner’s notification to the local authority.

Throughout this period, the owner may market the asset and negotiate sales, but contracts cannot be exchanged except with a community interest group. Following the moratorium, the owner is free to sell the asset to any party at any price.

This system aims to provide community groups with time to formulate bids and secure funding for the asset’s purchase when it becomes available on the open market. While community groups are not granted automatic preference, bids from local communities may ultimately prove successful.

Sales not compliant with these regulations are deemed void, indicating that the change of ownership is legally nullified.

Recognising potential financial impacts on owners, the scheme includes a compensation scheme for private property owners, which is administered by the local authority.

Certain asset types are exempt from listing, including residential property.

Additionally, in March 2016, Community Pubs Minister Marcus Jones unveiled a new support and finance programme to assist communities in acquiring their local pubs for community benefit.