ACV - Asset of Community Value

ACV – Asset of Community Value

ACV or Asset of community value give communities a right to identify a building or other land that they believe to be of importance to their community’s social well-being. If the asset comes up for sale, then they will be given a fair chance to make a bid to buy it on the open market. If the nominated asset meets the definition of an asset of community value, the local authority will list it.

To be considered as an asset of community value the asset must show that the actual current use of the asset furthers the social wellbeing or social interests of the local community and it is realistic to think that the future use of the asset will further the social wellbeing of the community

The act prevents the listing of assets which might have a community value in the future but which have not been used for that purpose for a long time – e.g. an area of derelict land that has been unused for some years. Assets can only listed by virtue of their present or recent use, not just by planned future uses. The listing of assets which are occasionally used for the social benefit of a local community but which are not primarily used for this purpose – e.g. a space used for an annual village fete cannot be listed.

Any developer should check the local register to establish as to whether a building or area of land is listed with the local authority. This might apply to pubs, but can apply to open green areas, village shops, old buildings, woodlands, community halls, public toilets, parks, museums, cinemas, sports facilities, etc.

The right for voluntary and community organisations in England to nominate an asset to be included on their local authority’s register of asset of community value was introduced as part of the Localism Act 2011. Also see The Assets of Community Value (England) Regulations 2012.

The regulations do not restrict in any way who the owner of a listed asset can sell his property to, or at what price. They do not confer a right of first refusal to community interest groups. Although this does vary in Scotland.

Selling an ACV or asset of community value

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 (i.e. originally granted for at least twenty-five years).

Unless an exemption applies, the owner will only be able to dispose of the asset after a specified window has expired.

The first part of this window is a six week interim period, which will apply in all cases, from the point the owner notifies the local authority. This will allow community interest groups to make a written request to be treated as a potential bidder. If none do so in this period, the owner is free to sell their asset at the end of the six weeks.

During the six week interim moratorium period a community interest group may request in writing to be treated as a potential bidder for the asset; this will bring the full moratorium period into force. 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 group of at least 21 local residents
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

If a community interest group does make a request during this interim period, then the full six month moratorium (again from the point the owner notifies the local authority) will operate. During this period the owner may continue to market and negotiate sales, but may not exchange contracts (or enter into a binding contract to do so later). There is one exception. The owner may sell to a community interest group during the moratorium period.

After the moratorium period the owner is free to sell to whomever they choose and at whatever price, and no further moratorium will apply for the remainder of a protected period lasting 18 months (running from the same start date of when the owner notified the local authority of wishing to sell). They do not confer a right of first refusal to community interest groups

The asset of community value (ACV) listing lasts for a period of five years and then it is delisted unless it is renewed.

Appeals

Property owners can appeal against the listing at anytime within the five year period if they feel that it no longer meets the criteria of Section 88 of the Localism Act 2011. The owner will have a right to an internal review by the council, and a right of appeal to an independent tribunal against the result of the internal review.