Community right to bid - Guidance Notes

Guidance Notes

  • On 21st September 2012 Part 5, Chapter 3 of the Localism Act 2011 and the Assets of Community Regulations 2012 came into force. The provisions give local groups the right to nominate a building or other land for listing by the Local Authority as an asset of community value. It can be listed if a principal (“non-ancilliary”) use of the asset furthers (or has recently furthered) the community’s social wellbeing or social interest (which include cultural, sporting or recreational interests) and is likely to do so in the future. These facilities could include green spaces from community gardens and parks, to orchards and allotments and are not restricted to publicly owned land.
  • Local Authorities are required to maintain a list of land and buildings nominated by local voluntary and community organisations, including Parish Councils, as assets that are of value to the community.
  • When a listed asset comes up for sale, an interim moratorium period of 6 weeks will automatically apply. During this time community interest groups (including Parish councils) will be able to advise the Council that they wish to be treated as a potential bidder. If no such communications are received then the owner will be free to sell at the end of the interim moratorium period.
  • Nominated assets may be owned by anybody, including the Local Authority and the Crown.
  • If a community interest group lodges a wish to be treated as a potential bidder with the Council, the full moratorium period of 6 months will be triggered and the group will have up to 6 months to prepare a business case and secure funding.The owner cannot dispose of the asset during the applicable moratorium period, other than to a community interest group.
  • The owner cannot dispose of the asset during the applicable moratorium period, other than to a community interest group.

Nominating an Asset

  • It is open to parishes and community organisations, including neighbourhood forums (as constituted under section 61F of The Town & Country Planning Act 1990, added to that Act by the Localism Act) to nominate local assets to their Local Authority to be included on the list of assets of community value.
  • A neighbouring Parish Council can nominate an asset. Where the land is in a parish area, this means a parish which shares a border with it; or if an asset is in an unparished local authority area, so that there is no immediately adjoining parish council within the same local authority area, a parish council that borders the local authority could nominate an asset. 

Contents of the Nomination

  • A nomination must include the following information for the Local Authority to consider:
    • A description of the nominated land including its proposed boundaries. The boundaries do not have to be the same as ownership boundaries, for instance as shown on the Land Registry plan if the land is registered; nor is it necessary for all parts of the nominated site to be in the same ownership.
    • Any information the nominator has about the freeholders, leaseholders and current occupants of the site.
    • The reasons for nominating the asset, explaining why the nominator believes the asset meets the definition in the Act.
    • The nominator’s eligibility to make the nomination.
  • A nomination can be made at any time, including after an asset has been put on to the market. No restrictions on sale arise from nomination, it is only the listing which will cause the statutory provisions to be invoked.
  • The Council’s point of contact for submission and consideration of nomination forms shall be the Principal Solicitor (Planning & Property).
  • The Local Authority will have 8 weeks to decide whether the asset meets the definition set out in Section 88 of the Act or whether it falls into one of the excluded categories, including residential property, set out in Schedule 1 to the Regulations.
  • If the nominated asset is properly nominated, is in the Local Authority’s area, meets the definition, and is not excluded, the Local Authority must list it and inform all specified parties (including the parish council). They must also place the asset on the Local Land Charges Register and if the land is registered apply for a restriction on the land register in Form QQ.
  • If the owner objects to the property being placed on the list, they will have a right to an internal review by the Council of the decision to list. If the owner remains in disagreement with the listing after the internal review they have a right of appeal to an independent tribunal.
  • If the Local Authority does not agree that the asset nominated meets the section 88 definition or it is one of the excluded categories, they must place it on a list of assets nominated but not listed. If an owner is successful in their appeal against listing at internal review or tribunal stage then the asset must also be moved to the list of unsuccessful nominations.

Moratorium 

  • Once an asset has been listed nothing further will happen unless and until the owner decides to dispose of it, either through a freehold sale, or the grant or assignment of a qualifying lease.
  • Section 95 of the Act sets out the moratorium requirements and Section 96 of the Act defines “Relevant disposal”.
  • If an owner of a listed asset wishes to dispose of the asset they must notify the Council. This will trigger the interim moratorium period of six weeks. This runs from the date the Local Authority receives notification from the owner of their intention to dispose of the listed asset. 
  • The Council must update the list of assets of community value to show the owner’s intention to dispose of the asset. The updated list must give the dates of the interim and full moratorium end dates. 
  • The Council must inform the nominator that the asset is to be disposed of. 
  • During the interim moratorium period the nominator or other community interest groups may advise the Council in writing that they wish to be treated as a potential bidder. 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 charity
    • A community interest company 
    • A company limited by guarantee that is non-profit distributing
    • An industrial and provident society that is non-profit distributing 
  • (these groups will be renamed as community benefit societies by the Co-operative and Community Benefit Societies and Credit Unions Act 2010 when the relevant provisions come into force)
  • If the nominator or other community interest groups do not advise the Council that they wish to be treated as a bidder within the interim moratorium period the moratorium period ends and the owner may dispose of the asset and the list should be updated accordingly.
  • When a community interest group makes a written request to the Council during the interim moratorium period to be treated as a potential bidder this triggers the full moratorium period of six months and the owner may not dispose of their asset during this time. 
  • 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 of the Regulations. The full list of exemptions is set out in Annex A. 

Compensation

  • The scheme recognises that these provisions may have some financial impact on owners and provides a compensation scheme for private property owners. This will not be available to public bodies. The Local Authority will be responsible for administering the compensation scheme, including assessing and determining compensation awards. Owners and former owners will have rights of review and appeal regarding the Authority’s compensation decision.

Enforcement

  • The Regulations provide a penalty for non-compliance and measures to minimise the chance of a disposal not being compliant with the scheme.
  • The Council must add that an asset has been listed to the local land charges register. 
  • The Council must notify the owner that their asset has been listed and inform them of the implications. 
  • Owners are required to inform local authorities that the land has been entered on the Land Register as a result of an application for first registration and also to inform the Council if they have become the new owner of listed land, giving their name and address details. 
  • The Council must apply to the Land Registry for entry of a restriction on the Land Register when an asset is listed or when the owner of a listed asset changes.
  • The Council must apply to the Land Registry for cancellation of the restriction when an asset is removed from the list. 
  • When a listed asset is disposed of the Land Registry will need to be provided with a certificate from the conveyance that disposals of listed assets have complied with the moratorium requirements.

 

 


Last Updated on Friday, May 29, 2020

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