Community Right to Bid

Page last updated at 10 April 2017 at 11:21

Community Right to Bid Guidance

 

Introduction

The ‘Community Right to Bid’ (also known as Assets of Community Value) was introduced by the Localism Act 2011 and came into force on the 21st September 2012. The provisions give local groups a right to nominate a building or other land for listing by Eastleigh Borough Council (‘the Council’) as an asset of community value. When a listed asset is to be sold, community interest groups will have a window of opportunity to bid for the ‘community assets’.

How to get an asset listed

What type of property can be nominated?

Who can nominate?

How can property be nominated?

What happens following a nomination?

Register of Assets of Community Value

Internal Review

Tribunal review

 

Once an asset is listed

What happens when the owner wants to sell the asset?

Enforcement

Compensation

Compensation review

When will an asset be removed from the list?

 

Asset listing

What type of property can be nominated?
A building or a piece of land is deemed to have community value if it has a use which furthers the social wellbeing or social interests of the local community (that is, cultural, recreational or sporting), or which have had such a use in the recent past. It can be a private or publicly owned property.

It will be necessary to show that the main use of the property or land can continue to meet these social objectives in the future or, in the case of a property or land where the use ceased in the recent past, that there is a realistic prospect of the continued or future social use of the asset. Examples may include village shops, pubs, libraries, community centres, sport centres and allotments.

The policy behind the legislation is to promote that continued use by giving local community groups the opportunity to prepare a business plan and gather finances in order to buy the asset, and thereby continue its use.

Residential properties, properties which have not had a social use for some years and properties that have been derelict or empty are not covered by the legislation.

 

Who can nominate?
Only eligible voluntary and community organisations can make nominations. This includes parish/town councils or voluntary or community bodies with a ‘local connection’. It also includes local neighbourhood forums, unincorporated bodies with 21 or more members, charities, companies limited by guarantee, industrial and provident societies and community interest companies.

Evidence of a ‘local connection’ will include showing that an organisations activities are wholly or partly concerned within Eastleigh Borough or within a neighbouring authority’s area; and, where the organisation is permitted to generate an operating surplus, that this surplus is applied wholly or partly for the benefit of the Eastleigh Borough area or a neighbouring area.

How can property be nominated?
The Council strongly recommends any group wishing to nominate land or property as an asset of community value contact the Council to engage in pre-nomination discussions.

In order to nominate a building or piece of land within the Council’s area as an ‘asset of community value’, a voluntary or community group must submit a completed application form to the Council.

A nomination must include the following information:

(a)          A description of the nominated land including its proposed boundaries;

(b)          A statement of the information which the nominator has had regard to -

(i)            the names of the current occupants of the land;

(ii)          the names and current or last-known addresses of all those holding a freehold or leasehold estate in the land;

 

(c)          A statement of the nominator’s reasons for thinking that the Council should conclude that the land is of community value -

(i)            that the actual current use, or use in the recent past, furthers the ‘social wellbeing and social interests’ of the local community;

(ii)           that in the case of the current use, there is a ‘realistic prospect’ that this use could continue or in the case of use in the recent past, that there is a ‘realistic prospect’ that within the next five years the use could resume;

 

(d)          Evidence that the nominator is eligible to make a community nomination.

 

What happens following a nomination?
Once the Council has received the nomination form it will be checked to ensure it is an eligible nomination, that it contains the required details and whether the asset is in an excluded category. The Council must decide whether or not to list the asset within eight weeks following the nomination.

Once this initial check has been completed the Council will assess the application to determine whether the nominated asset is of ‘community value’. In making this determination the Council will consider, amongst other things, whether the absence of the asset would deprive the local community of a building or property which is essential to the special character of the area and provides a place to meet, socialise, shop or a recreational, sporting or cultural facility.

This assessment will be carried out by the Planning Policy and Design Manager or his/her representative and will involve seeking advice and guidance from the local ward Members and it may involve seeking advice and guidance from other Council officers such the area co-ordinators, the Health and Community Team Manager and the Head of Development Control. The local parish or town council and Hampshire County Council may be asked to comment on the proposed nomination to help make the decision.

To demonstrate a ‘realistic prospect’ of continued or future use of the asset, the Council requests that the nomination includes an outline of how funds would be raised to purchase the asset and for on-going running costs, a business plan for the day-to-day running and for the upkeep of the asset and evidence of the availability of volunteers if they form part of the proposal.

Whilst assessing the application the Council will take all reasonable steps to notify the parish council (if there is one) and the owner (and/or freeholder and/or leaseholder and/or lawful occupant) of the land that the Council is considering listing the property as an asset of community value.

If the decision is taken that the asset should not be listed, details of this decision will be provided in writing to the body making the nomination, the parish council (if there is one) and the owner/occupier as appropriate. These nominations will be added to the Council’s register of unsuccessful nominations for future reference. The asset will remain on this list for a period of 5 years.

If the decision is taken that the asset should be listed, the land will be included on the Council’s register of assets of community value.  The owner has the right to appeal against this decision within eight weeks of the Council notifying them of the decision.

Register of Assets of Community Value
Once the asset is added to the Council’s register of assets of community value the Council will notify the owner/occupier/freeholder/leaseholder of the land and the community group who made the nomination. This notification will include the consequences for the land and its owner of the lands inclusion on the list and the right to ask for a review.

The Council will add the asset to the local land charges register and if the land is registered, apply for a restriction on the Land Register in Form QQ. This will ensure that all prospective new owners will be aware that an asset has been listed. There are also requirements on owners or mortgagees applying for first registration of listed land to apply for a restriction on the land register. They require a person who has become an owner of the land following a disposal to inform the local authority and provide ownership details.

Internal Review
Within eight weeks of being notified of their property being listed as a ‘community asset’, the owner can appeal to the Council for a ‘listing review'. The asset will remain listed during the review period. The owner and the Council will bear their own costs associated with the review.

Any appeal must be made in writing to the Council. The Council will then have eight weeks from the date of receiving the request to carry out the review. This may take longer in particularly complicated cases but if so this will be agreed with the parties involved. The review will be carried out by a senior officer who was not involved in the decision to list the asset.

The owner may appoint a representative to act on his behalf in connection with the review. The Council will provide all relevant documents to this representative and will advise of the procedure that will be followed for the review.

The owner may request an oral hearing and the owner and the owner’s representative may make representations to the reviewer orally and/or in writing.

The decision of the Council will be made in writing and a copy will be provided to the owner and the body who made the original nomination. If the review concludes that the asset should not be included on the list of assets of community value the property will be removed from the list.

Tribunal review
If the owner is dissatisfied with the internal review, they will have 28 days from the date on which the Council notifies them of the internal review decision to appeal for a review by the General Regulatory Chamber of the First-Tier Tribunal.

Owners must submit their appeal in writing to the First-Tier Tribunal:

Email: GRC@hmcts.gsi.gov.uk

Post: Tribunal Clerk, Community Right to Bid Appeals, HM Court & Tribunals, First-tier Tribunal (General Regulatory Chamber), P.O. Box 9300, Leicester, LE1 8DJ

 

Once listed

What happens when the owner wants to sell the asset?
When an owner wishes to sell property listed on the register he must notify the Council of his intentions. There are some exemptions to the requirements and it is therefore recommended that owners contact the Council for detailed advice on this.

If the sale is a ‘relevant disposal’, a six week interim moratorium period will begin on the day the owner notifies the Council of his intention to sell. The Council will update the register to show the interim and full moratorium dates. The Council will then notify the nominator and any community bodies who have registered an interest in the owner’s intention to dispose of the asset. If you are a community group who wishes to receive these details please contact the Council to join the database.

During the 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 ‘expression of interest’ does not need to include any financing details, nor does it bind the community interest group into making a bid.

A ‘community interest group’ must have a local connection and be incorporated as a charity, a community interest company, a company limited by guarantee that is non-profit distributing or an Industrial and Provident Society that is non-profit distributing.

The full moratorium period runs for six months from the date the owner notified the Council of their intention to dispose of the asset. This will give the community group an opportunity to prepare a full bid.

During the interim or full moratorium period, the owner can continue to market and negotiate the sale of the property, however, unless an exempt disposal applies, the owner can only dispose of the asset to a community interest group. A community interest group which bids for the asset does not have to be the same community group which nominated the asset and/or activated the full moratorium.

At the end of the moratorium period the owner can sell the property to whoever they like.

After the interim or full moratorium period has expired (as applicable), the owner will have an 18 month protected period from the date when they notified the Council of their intent to dispose, where no further moratorium periods can be triggered. During the protected period, the owner can dispose of the asset to whoever they wish and at whatever price they wish.

Once the protected period has expired, if the asset has not been disposed of, the owner cannot enter into a relevant disposal. If the owner wishes to enter into a relevant disposal they will need to notify the Council and the process begins again, with a six week interim moratorium period starting from the date the Council was notified.

Enforcement
Local authorities are required to add that an asset has been listed to the local land charges register and if the land is registered, apply for a restriction on the Land Register.

When a listed asset is disposed of, and a new owner applies to the Land Registry to register a change of ownership of a listed asset, they will therefore need to provide the Land Registry with a certificate from a conveyancer that the disposal (and any previous disposals if this is the first registration) did not contravene section 95(1) of the Localism Act (the moratorium requirements).

If a non-compliant disposal of a listed asset occurs, the transfer will be ‘void’, meaning that the change of ownership has not taken place. If the transfer has been erroneously registered on the Land Register it will still be void, and would have to be rectified. This penalty will not apply if the owner was unaware through no fault of their own that the land was listed when it was sold.

Owners are encouraged to seek independent legal advice on these points.

Compensation
Private owners may claim compensation from the Council for losses and expenses incurred which would not have occurred if the land had not been included on the list.

The Regulations provide that this will specifically include a delay in entering into a binding agreement to sell which is wholly caused by the moratorium period; or legal expenses incurred in a successful appeal to the Tribunal.

A compensation claim must be made by the owner within whatever is earlier out of 13 weeks from the end of the interim or full moratorium period (as appropriate), or from the date when the land ceased to be listed.

Claims must be made in writing to the Council, stating the amount of compensation sought and providing the necessary supporting evidence. The burden of proving the claim will fall upon the owner.

The Council will consider the validity of the claim as soon as practical and will give written reasons for the decision.

Compensation review
An owner who is dissatisfied with the Council’s response to their compensation claim can appeal for an internal review of the claim within eight weeks of being notified of the Council’s decision. The owner can ask for a review of the decision and/or the amount of compensation awarded.

The process for the review will be the same as for a listing review.

An owner who is dissatisfied with the outcome of the Council’s internal review of their compensation claim can appeal for a Tribunal review within 28 days of being notified of the internal review decision.

When will an asset be removed from the list?
A property will be removed from the Register of Assets of Community Value if;

a) it has been on the register for five years;

b) the owner has been successful in a listing review;

c) the owner has demolished the listed asset;

d) the Council deems the listed asset to no longer be of community value.

A property will be removed from the Register of Unsuccessful Nominations if it has been on the register for five years.

When a property is removed from either registers the Council will release a statement setting out the reasons for the removal. The Council will notify the owner, any leaseholders and the nominator of the statement. In the case of an asset being de-listed, the Council will also notify the Land Registry.