Introduction
The ‘Community Right to Bid’ was introduced by the Localism Act and came into force on 20 September 2012.
The Right to Bid gives voluntary and community groups, and town and parish councils, the opportunity to nominate local land buildings to be included on a list of ‘Assets of Community Value’. This is designed to give communities more opportunities to take control of the assets and facilities important to them.
- if the nominated asset meets the definition of an asset of community value, we must list it and notify the owner and the Land Registry. The owner will have a right to a review by the council, and an appeal to an independent tribunal.
- nothing further will happen until the owner decides to dispose of the asset, either through freehold sale, or the grant of a lease for at least 25 years. At this point, they must notify us of their intention to sell.
- the owner will only be able to dispose of the asset after a specified time period, known as a ‘moratorium’, has expired.
The legislation does not restrict who the owner can sell their property to, or at what price. It does not guarantee that the community will be able to take ownership of assets – it simply gives them some time to raise the funds and prepare a bid.
What are Assets of Community Value?
Buildings or other land within Somerset where:
- its current use (or use in the ‘recent past,’ that is in the past 5 years) furthers the social wellbeing and interests of the local community and
- the continued use (or in the next 5 years) furthers the social wellbeing and interests of the local community.
The Localism Act notes that “social interests” include “cultural, recreational and sporting interests”, but “social well-being” actually applies to a much broader set of activities. So, although this is not an exhaustive list, examples of assets of community value are shown below.
Education, health and well-being or community safety – for example:
- Nurseries and schools
- Children’s centres
- Health centres, surgeries and hospitals
- Day care centres, residential care homes
Sports, recreation and culture – for example:
- Woodlands, parks and open green spaces
- Sports and leisure centres
- Swimming pools or lidos
- Libraries
- Theatres
- Museums, heritage sites
- Cinemas
Community services – for example:
- Community centres
- Youth centres
Local democracy – for example:
- Town, civic and guildhalls
Any economic use which also provides an important local social benefit. In these cases, it is the social value of the business that counts, not just the nature of the business – this could include:
- Village shops
- Pubs
- Markets
Assets of community value cannot be:
- residential properties and associated land
- land licensed for use as a caravan site
- operational land used for transport, and other infrastructure.
Church of England property that is ‘vested’ in the care of the Churches Conservation Trust is exempt from the Moratorium. Churches are not subject to any other special treatment – nominations can be made in respect of any church asset, regardless of who owns it.
Community Interest Groups
The Community Right to Bid can be used by any ‘community interest group’. The government’s definition of this includes:
- Parish Councils
- unincorporated groups with at least 21 members who are on the electoral roll within Somerset and does not distribute any surplus it makes to its members
- neighbourhood forums
- charities
- companies limited by guarantee that do not distribute any surplus to members
- industrial and provident societies that do not distribute any surplus to members
- Community Interest Companies
- Community Benefit Societies
The group must not carry out their activities primarily for profit and must partly or wholly re-invest any surplus in the Somerset area or in a neighbouring authority area.
What is a local connection?
- the group must demonstrate that its activities are wholly or partly concerned with the Somerset area, or with a neighbouring authority (which shares a boundary) and
- any surplus it makes must be wholly or partly applied for the benefit of the Somerset area or a neighbouring authority’s area.
What happens once an asset is listed
Once an asset is listed, the owner cannot then dispose of it without:
- letting the local authority know that they intend to sell the asset or grant a lease of more than 25 years
- waiting until the end of a 6-week ‘interim moratorium’ period if the local authority does not receive a request from a community interest group to be treated as a potential bidder
- waiting until the end of a 6-month ‘full moratorium’ period if the local authority receives a request from a community interest group to be treated as a potential bidder
The owner does not have to sell the asset to the community interest group.
How long an asset remains on the register
All accepted nominations remain on the register for 5 years. However, if the asset is sold during this time, or if the asset no longer meets the definition of ‘community value’ for example in the event of change of use to residential, we will remove the asset from the Register.
After 5 years the asset is removed from the Register. If the community want the asset to go back on the register, they must nominate it again using the same process as above.
Register of Assets of Community Value
We are bound by law to list all accepted assets on our Register of Assets of Community Value.
We will notify applicants if their nomination is not eligible and enter it onto our Register of Unsuccessful Nominations. We can provide a copy of both registers, free of charge, on request.
Public Houses
Pubs that are listed as assets of community value will require planning permission to be demolished or changed to any other use. In effect, existing permitted development rights will be removed for pubs listed as assets of community value for as long as the pub is on the register. The relevant planning regulations can be summarised as follows:
a) All pubs listed as assets of community value (including those already listed) will require planning permission prior to any change of use or demolition. This protection applies from the date of nomination and applies for the duration of the period the asset is listed (usually 5 years).
b) Before a development takes place, the developer must write to the council’s planning department requesting as to whether the building has been nominated as an Asset of Community Value.
c) If the building is nominated, whether at the date of the request outlined in b) above, or on a later date, we will notify the developer as soon as is reasonably practicable after it is aware of the nomination, and on notification, development is not permitted for the specified period.
d) We have 56 days to confirm whether the pub is listed or nominated. This means that the owner cannot change use or demolish a pub lawfully within the prescribed 56-day period.
Exemptions
Some types of disposals are exempt from the moratorium process even if the asset is listed. These are set out in the government guidance on the community Right to Bid and include:
- if the disposal is a gift
- if the disposal is made between members of the same family
- if the land or building being disposed of is part of a bigger estate
- if the disposal is of a building or piece of land on which going-concern business is operating, provided that the sale is to a new owner to continue the same business (for example, if an owner of a pub wants to sell the pub to a new owner, to continue running it as a pub).
Another exemption is when the owner agrees a disposal to a local community interest group, which can be made during a moratorium period. This will have been triggered by the owner notifying the local authority of their intention to sell.
How to apply
Nominations
We will consider nominations at any time during the year. If the intended asset is already on the open market, providing contracts have not been exchanged, we can still consider the nomination.
How does the community submit a nomination?
Email acv@somerset.gov.uk to discuss your project. There are a number of ways in which we may be able to help, and the Community Right to Bid may not always be the best route for all organisations. If a group decides to go ahead, they must complete the Nomination Form. If all the necessary information is not submitted, then we may be unable to consider an application.
Prior to submitting a nomination, please read the nomination form guidance notes.
How long will it take?
We will acknowledge receipt of all nominations within 5 working days. During, or after this time, we may contact applicants for further information and discuss the nomination with the applicant. Under legislation, we are obliged to make a decision on whether or not to list the asset within 8 weeks of receiving a complete nomination. All applicants will be contacted once a decision has been made.
As part of the process to consider an application for an asset of community value, the council must take all practicable steps to inform and consult with the following if an asset has been nominated:
- a parish council (if any) in which the land lies (or partly lies)
- the owner as defined in section 107 of the Localism Act
- all others with a legal estate, such as if the owner is not the freeholder, then the holder of the freehold estate, and any other leaseholder apart from the owner
- any lawful occupant (which could include a licensee).
The council will also inform the relevant local elected member(s) of a nomination within their area.
Can an asset be re-nominated?
The council will not acknowledge successive nominations of a previously unsuccessful nominated asset, within a period of 12 months, unless the following condition has been met:
- That the nominee has proven within their nomination that a substantial or material change in circumstance has occurred since the council’s original assessment of the building or land.
If this condition is not met, successive nominations will be excluded, and the nominee will be notified in writing by the council.
Can the owner request a review of the council’s decision?
Yes, owners can request a review from us. The owner must request the listing review within 8 weeks of the date that we notified the owner of the listing. The asset remains on the register while the review is carried out, which will be conducted by a relevant Service Director.
If the review results in a change in the listing, we will notify the owner and the nominating body, including the reasons for the decision. If the asset remains on the register after the review, the owner can appeal to an independent tribunal.
The application process
- Once we receive your nomination we will acknowledge receipt, notify the owner and assess if it is eligible. If the nomination meets the relevant criteria and is approved by the Council, the asset will be included on the register. A register will also be compiled for any unsuccessful nominations that do not meet the criteria. From nomination to a decision, whether to list or not, must be completed within 8 weeks.
- If accepted, Somerset Council will notify the owner and the Land Registry that the asset has been included on the Register. The owner has a right to appeal against the listing. There is no right of appeal for nominators if an asset is not listed.
- Once listed, the asset remains on the register for up to 5 years until such time as it is sold.
- If the owner decides to sell the property, they must notify the Council, unless, in the case of a business such as a shop or pub, the intention is to sell the asset as a going concern. We will notify you as the nominating body and publicise in the local area. This triggers an initial 6-week moratorium during which the owner cannot complete a sale unless it is to the community.
- From this point, any community organisations wishing to submit a written intention to bid to purchase the property must do so within this window.
- If an intention to bid is received during the 6-week period, then the full 6-month moratorium is triggered (again starting from the date the owner first notified the council of their intention to sell). During this period, the owner may continue to market and negotiate sales but may not exchange contracts or enter a binding contract to do so later; the one exception being that the owner may sell to a community interest group during this moratorium period.
- If there has been no community interest in bidding during the initial 6 week moratorium, or following the full 6 month moratorium no bid is received, 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).
Compensation
Property owners who believe they have incurred losses or costs as a result of complying with these procedures can apply for compensation from the Council. Details are set out in Somerset Council’s Procedures for Compensation for Community Right to Bid.
Notices to the community of current assets
If we receive notifications of relevant disposals of Assets, then the notices to the community will be shown here.