UK: The Slowly Changing Face Of Assets Of Community Value

Last Updated: 3 October 2016
Article by Matthew Mainstone

Which properties are affected? Pubs are the most commonly protected assets, but shops, community centres and even football stadia have been listed as Assets of Community Value ("ACVs"). With limited exceptions, most importantly residential premises, most types of property can be listed as an ACV if it can be demonstrated that their use furthers the social wellbeing or social interests of the local community.

Initially designed as a means to give local community groups a fairer chance to bid for properties when they come up for sale in order to retain their community benefit, ACVs show signs of evolving into something more troubling for owners. Initially the main concern for those affected by the listing of a property as an ACV was the delay that it could cause to a sale. Otherwise, the constraints were minimal as the legislation introduced no requirement to sell to community groups, no restrictions on sale price and not even a right of first refusal. However, the restrictions have since grown teeth and some fear that ACVs could become a similar impediment to development as the registration of land as a town or village green.

The concept of ACVs was introduced by the Localism Act 2011 and given effect by the Assets of Community Value (England) Regulations 2012 in September 2012.

Local authorities have to keep a list of land in their area that is of community value and successfully nominated properties have to be added to that list. Assets can only be nominated by a local group whose activities are concerned with the local authority area or that of a neighbouring authority. These could be parish councils, neighbourhood forums, and unincorporated groups that require a membership of just 21 local people.

To qualify as an ACV, the building or land must 'in the opinion of the authority' have an actual current use that furthers the social wellbeing or social interests of the local community (which could be cultural, sporting or recreational) and it is realistic that this use of the property will continue. Properties can also qualify if they do not currently further social wellbeing or interests, but recently did, and it is realistic to believe that in the next five years there could be a use of the property that would further those interests.

If a property meets the criteria it will be listed. Owners can request a review and there is a right of appeal, but given that the bar is set quite low in the first place defeating a listing is no easy task.

If a property is listed as an ACV, the owner must notify the local authority if it ever wants to sell the freehold or a leasehold interest (where the lease was originally granted for 25 years or more). There is then a moratorium period, during which time the property cannot be sold, which is designed to give community groups sufficient time to express an interest and then possibly to prepare a bid. The moratorium period is six weeks, and if a community group expresses an interest in purchasing the property in that time it will be extended to six months.

Apart from that, the legislation initially placed no further restrictions on what an owner could do with the asset once it had been listed.

The first sign of a possible future influence of ACVs in planning decision-making was in some non-statutory guidance for local authorities issued by the Department for Communities and Local Government in October 2012, only a month after the ACV Regulations came into force. The guidance suggested for the first time that the listing of a property as an ACV could be a material consideration in determining a planning application for a change of use. The guidance went no further than that, but it suggested a move towards a more important role for ACVs. Additional protection is afforded by Paragraph 70 of the National Planning Policy Framework which specifies that planning decisions should guard against the unnecessary loss of valued facilities and services.

The next stage of the 'mission creep' was the introduction of the Town and Country Planning (General Permitted Development) (England) Order 2015 in April 2015. It placed significant restrictions on permitted development rights ("PD rights") to change the use of properties if they had been, or might be, listed as an ACV, particularly pubs.

If a change of use of a pub to certain other uses is proposed, including to a shop or restaurant use, that change of use cannot take place under PD rights if the property is listed as an ACV. The restriction applies for five years from the date of the listing. Not only that, but if the pub is not an ACV, before beginning development under PD rights the owner or developer has to ask the local authority if it has been nominated as an ACV. The development cannot take place for at least 56 days following a request - if the building is nominated, either at the date of the request or a later date during that 56 day period. If nominated, the local authority has to notify the owner/developer of the nomination and development cannot take place during the period between the date of its nomination and the local authority's decision. If the property is then listed as an ACV, the PD rights cannot be used for five years.

These restrictions apply regardless of whether the local authority has determined that the change of use may proceed under the prior approval process that has to be followed with some PD rights.

The PD rights restrictions also apply to the demolition of pubs in the same way. If the pub is listed as an ACV it cannot be demolished for the same five year period using PD rights, and where it is not listed an opportunity is effectively afforded to local community groups to nominate and secure the listing of the pub so that the PD rights to demolish are removed. In that case, planning permission would have to be obtained for any demolition, and given that the listing as an ACV can be a material consideration in a planning decision, it could potentially result in planning permission being refused.

Contravention of the restrictions can have serious consequences, as the owners of the Carlton Tavern in Maida Vale found out. They demolished the property without following the requirements and have recently been ordered to rebuild the pub to its previous condition.

Further changes may well be on the cards. A Private Member's Bill appears to be promoting further restrictions, and although the Bill is unlikely to become law it demonstrates an increasing expectation amongst the public that properties with a community benefit should be protected.

The Odeon Cinema in Kensington is a case in point. The property has planning permission for a predominantly residential development, but a local group has applied for the cinema to be listed as an ACV to enable their vision of "The Hitchcock" multi-arts centre to come to fruition. They don't own the building and any ACV listing will not compel the owners to sell it to them or to develop the cinema as a multi-arts centre, but it shows that the public increasingly attaches great importance to ACVs, even though they do not yet have the teeth that they wish. Watch this space!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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