Community Right to Bid
Over the last 10 years, communities have been losing local amenities and buildings which they value such as the village shop, the local pub, a library or a parish hall. Nationally it is estimated that on average each year 300 pubs and 400 local shops are closed. However, at the same time local community asset ownership has been growing resulting in real benefits for many communities. Over 200 communities have bought their village shop and increasingly others are looking to take over their pub to prevent it closing.
Unfortunately, there are times when community organisations have insufficient time to organise funding and prepare a bid before an asset is sold and as a consequence a valued building or piece of land has been lost through a private sale.
Community Right to Bid will give communities a right to identify ‘up front’ a building or other land that they believe to be of importance to their community’s social well-being. The community can have the building or land added to the list of Assets of Community Value and if it comes up for sale there is a six month window to allow the community to prepare their bid. The property in question is then sold on the open market; however no preference is given to the local community bid.
For more information on the Community Right to Bid, please take a look at the following website http://mycommunity.org.uk/resources/understanding-the-community-right-to-bid/
What is an asset of community value?
Land or buildings which are used by the community, or have been in the recent past, and could continue in such a use are likely to be classed as ‘assets of community value’. These properties could include:
- community halls
- sports facilities
- town halls
- village greens
The building or land does not have to be in community ownership, it could be in private or local authority ownership.
Please note: Community Centres owned by the borough council and leased to community associations are already 'protected' for community use and their listing does not give any additional protection. Organisations are encouraged not to nominate these buildings. Any nomination that is received for an asset the organisation believes to be in council ownership must be accompanied by all the relevant documentation including the land registry details showing accurately the boundaries of the buildings and land being nominated.
The Community Right to Bid can only come into effect if a registered asset is to be sold. The fact that a property is proposed or nominated for registration cannot delay or prevent a sale.
Who can nominate an asset and how to make a nomination?
Only community groups can put forward nominations. Individuals or businesses are not able to do so. For a local group to be able to nominate land it will have to demonstrate that its activities are wholly or partly concerned with the local authority area where the asset sits or with a neighbouring authority (an authority which shares a boundary with the authority in which the asset is located).
Groups able to make nominations include:
- parish and town councils
- unincorporated groups
- neighbourhood forums
- community interest groups
How to make a nomination
Before making a nomination, you will need to define the exact boundaries of the building and land you wish to nominate and find out as much as you can about its ownership. The council will have to contact the current owner and, if the owner has rented or leased the premises, the council will also need to notify the current occupier, so please provide full names and postal addresses as relevant. If you are uncertain of the ownership and boundaries of the building and land you wish to nominate, you will need to carry out a search through the Land Registry.
If the property is not registered please provide the most accurate information that you can.
You will also need to explain the community use of the asset being nominated.
Many towns and villages have several community groups. Please liaise with the other groups (where applicable) and work together to share the workload but also to avoid multiple nominations for the same property. A property requires only one nomination, several nominations will not add weight to the case for listing.
Please complete the nomination form at the bottom of this page. Email the completed form to firstname.lastname@example.org or send to: Community Development, Basingstoke and Deane Borough Council, Civic Offices, London Road, Basingstoke, RG21 4AH.
Once the completed nomination form is submitted the council has eight weeks to make a decision as to whether to list the asset or not. In making this decision we will seek information from the owner, ward councillors and local groups (to verify whether or not the proposed asset meets the necessary criteria).
If the nominated asset is properly nominated, is in the local authority’s area, meets the definition, and is not excluded, the council must list it and inform all relevant parties (including the parish council). We 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.
If the council does not agree that the asset nominated meets the definition, or it is in one of the excluded categories, we must place it on a list of assets nominated but not listed.
The owner's right to object
When a property is nominated as an asset of community value the owner will be informed and has the opportunity to comment on the validity of the nomination. If their property is then registered as an asset they have the right to an internal review by the council of the decision to list. A request for a listing review must be made in writing within eight weeks of the notice of listing.
The property will remain on the list while the review is carried out. The review will be undertaken by a senior officer of the council who was not involved in the original decision to list. The owner can make representation to the reviewer and the council must complete the review within eight weeks (unless otherwise agreed). The owner and the council will bear their own costs of the review.
Please note that it is only the owner who has a right to a review of a decision to register an asset. There are no rights for others to have the decision, to list or not to list, reviewed.
If the owner is not satisfied with the outcome of an internal review they then have the opportunity to appeal. The appeal must be made to the General Regulatory Chamber of the First-Tier Tribunal within 28 days from the date on which notice of the decision appealed against (the outcome of the review) was sent to the owner. The property remains listed during the appeal process.
The community right to bid
The purpose of the register of Assets of Community Value is to ensure that if a registered asset comes up for sale, a moratorium on the sale, of up to six months, can be used. This provides local community groups with a better chance to raise finance and to make a bid to buy the asset on the open market. However, the owner still has the right to sell to whoever they wish for whatever price at the end of the moratorium period. There is no first right of refusal for community groups.
The Community Right to Bid only applies to those community facilities which are on the Register of Assets of Community Value.
The sale of an asset of community value
If an owner wishes to sell an asset of community value they must first notify the council's Community Development Team by emailing email@example.com or by writing to Community Development, Basingstoke and Deane Borough Council, Civic Offices, London Road, Basingstoke, RG21 4AH.
From the point that the owner notifies the council of their intention to sell the first moratorium period of six weeks commences. At this stage the council will inform the local community groups it is aware of, local ward councillors and the parish council of the pending sale. The six week period allows community interest groups to make a written request to be treated as a potential bidder. If no groups wish to bid for the property it can then be sold at the end of the six week period.
Only those groups which fit the definition set out by the Government can use the right to bid.
If a community group makes a request during the first 6 week moratorium period to be treated as a potential bidder, then the full six month moratorium period commences and starts from the date the owner notified the council of their intention to sell. During this time the owner can market the property or negotiate a sale but may not exchange contracts (or enter into a binding contract to do so later). The only exception is that the owner may sell to a community group during the six month period.
The owner is free to sell to whoever they wish at whatever price at the end of the six week period if there has been no community interest, or after the six month period if there has been community interest. No further moratorium periods can apply for the remainder of a protected period lasting 18 months; starting from the point that the owner notified the council of their intention to sell.
Not all proposed sales or transactions have to be notified to the council, for example gifts or disposals in accordance with a will. If you are the owner of a registered asset of community value you must:
- make every reasonable effort to establish whether your property is a registered asset or not prior to selling (you are advised to have this confirmed in writing)
- inform the local council of your intention to sell the property
- not sell the asset until the end of the six week period, or if there is community group interest of making a bid, within the 6 month period (unless to a community group)
- inform the council that the land has been put onto the Land Register as a result of an application for first registration
- inform the council if you have become the new owner of listed land (giving your name and address)
- comply with this scheme because non-compliant sales will be void or ineffective, meaning that the change of ownership has not taken place
- seek advice from the council prior to commencing a sale or property transaction.
Private owners may claim compensation for loss and expense incurred through the asset being listed or previously listed. Most claims will arise from the moratorium period being applied but may relate to loss or expense arising simply as a result of the land being listed.
Claims must be made in writing to the council within 13 weeks from the end of the six week or six month moratorium period (as appropriate) or from the date when the land ceased to be listed (when claiming expenses in relation to a successful appeal at a Tribunal).
Compensation claims are considered by the council. The owner may seek a review of a claim decision, this is an internal review undertaken by senior officers within the council. An owner may also appeal against the outcome of an internal review of a compensation decision. As with listing appeals the appeal will be made to the General Regulatory Chamber of the First Tier Tribunal.
The information contained in these web pages is only an overview to give a general understanding of the purpose and process of Assets of Community Value and the Community Right to Bid. For detailed guidance please look at the documents below. If you are an owner of a listed asset you are particularly advised to take legal advice prior to selling an asset to ensure that you comply with the legislation.