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Community Right to Bid - a barrier to development?

Wed 05 Jul 2017

Allotments in Lancashire listed as an asset of community value (ACV) have been de-listed so that the land can be used as part of a housing development, following a decision of the First-tier Tribunal.

Assets of community value

One of the central policy objectives of the Localism Act 2011 was to encourage greater community involvement in the delivery of local services and to promote community asset ownership. In recognition of the damaging effect on neighbourhoods of the closure key local amenities such as pubs and village shops, the Localism Act introduced the community right to bid.

Thus, a parish council or groups with connections to the community can nominate buildings or land to be listed as ACVs. Under section 88(1) of the Localism Act, a local authority will list a nominated asset if the authority decides that: 

(1)  the use of the building or land furthers the social wellbeing or social interests of the local community, and

(2)  that such a use which furthers the social wellbeing or interests of the community can realistically continue.

An ACV is then removed from the authoritys list five years after it has been designated.

Once listed, the community right to bid only arises when the assets owner chooses to dispose of it. A moratorium is triggered by an owners intention to dispose of the ACV, during which community interest groups have the opportunity to develop a bid and raise the funds to purchase the asset.

ACV status has been designated to football grounds, pubs, village halls and even to car parks. Since the introduction of the community right to bid, approximately 4,000 AVCs have been listed in England. However, at the time of the February 2015 DCLG Committee report, only 11 such ACVs had been bought by community groups while 122 groups triggered the moratorium period.

Facts of New Barrow Ltd v Ribble Valley BC

Land used as allotments by a local group under a licence was listed as an ACV in February 2016, on nomination of the land by a local parish council. The allotments fell within a larger area of land owned by New Barrow Ltd, for which outline planning permission had been granted on 20 February 2014. At the time of the hearing, the owner was in the process of preparing a reserved matters application with a housebuilder, which was to undertake the development of the whole land.

The owner served a termination notice on the allotment holdersgroup and granted a licence to occupy to the housebuilder, so that the listed land could be used as a depot for the purposes of the development.

The owner appealed to the First-tier Tribunal to have the allotments de-listed as an ACV.

Were the allotments correctly listed as an ACV?

The tribunal judge held that Ribble Valley BC was entitled to find that the allotments satisfied the criteria to be listed as an ACV. At the time of the decision to list the allotments, and despite outline planning permission having been granted, it was not unrealistic to think that the land may continue to be used as allotments or, indeed, for any other use which might further the communitys social wellbeing or interests.  

The question of whether or not the allotments should continue to be listed as an ACV, now that a licence to occupy had been granted by the housebuilder, turned on whether it was now realistic to think that there could be a continued use of the land that would further social wellbeing or social interests of the community.

Decision

In light of the development licence, which extended beyond the five year period for which the allotments were to be listed as an ACV, a continuing use of the land as allotments was held to be unrealistic. The granting of the development licence materially changed the situation from when the land was first listed, such that the criteria under s.88(1) of the Localism Act could no longer be satisfied.

Therefore, just over a year after the allotments had been listed as an ACV, the tribunal judge held that the designation should be lifted.

Conclusion

Ultimately, ACVs only facilitate a right to bid. Designation of ACVs does not restrict who the owner of a listed asset can sell their property to, nor does it confer a right of first refusal to community groups. Indeed there is no obligation to sell on to the interested group.

The above is an interesting case that clearly indicates that the community right to bid does not present any substantial barrier to development. The listing of land as an ACV clearly does restrict disposal during the moratorium. However the decision in New Barrow highlights that this is a finite restriction and, moreover, changing circumstances surrounding the ACV will lead to de-listing, removing the community right to bid.

New Barrow Ltd v Ribble Valley Borough Council (Community Right to Bid) [2017] UKFTT 2016/0014 (GRC) (2 March 2017)

Karen Cooksley
Partner
T. +44(0) 7593 5182
E. kcooksley@wslaw.co.uk

Selena Arbe-Barnes 
Trainee Solicitor

T. +44(0) 7593 1941
E. sab@wslaw.co.uk

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