The Community Right to Bid

The Community Right to Bid , along with ‘Community Asset Transfer’, ‘Community Right to Challenge’ and ‘Community Right to Build’, is part of the Localism Act and came into force in 2012. Under the Act, voluntary and community organisations and parish councils can nominate an asset to be included on a list of ‘assets of community value’ which is managed by the local authority. If the owner of a listed asset wants to sell the asset, a six month moratorium period will be triggered during which the asset cannot be sold. This period gives community groups some time to develop a proposal and raise the required capital to bid for the property when it comes onto the open market at the end of the moratorium period. The Act does not, however, give community organisations the power to force a sale. Similarly, the vendor retains the right to reject a community organisation’s offer in favour of another offer.  This is all in accordance with Part 5 Chapter 3 of the Localism Act 2011 (Assets of Community Value) (“the Act”) and The Assets of Community Value (England) Regulations 2012 .

In order to advise communities the My Community Rights online hub and advice service has been set up along with a £19 million Community Ownership of Assets programme offering grants to communities wanting to take control of a local asset such as a pub, shop, or library. In Brent, campaigners have been successful in adding Kensal Rise Library to the Brent Local Authority “List of Assets of Community Value”. The owners of the building, All Souls College, may now have to rethink their deal with property developers to build flats on the site, but All Souls can appeal against the decision. In West Somerset the owner of a pub that was recently listed has challenged the decision on the basis that he has lost money due to the property having to be taken off the market, so it will be interesting to see what All Souls do in this situation.

The TUC and the National Coalition for Independent Action have recently produced a report in which a range of contributors discussed the Localism Act.  In particular, concerns were raised in the report about the ‘Community Right to Challenge’, which was seen by many to be a ‘trojan horse’ for privatisation but another general concern was:

“…the lack of capacity within local community and voluntary organisations to make effective use of powers to buy community assets or produce neighbourhood plans. To many, this is seen as a way of empowering those in the community with the loudest voices, the most resources and the sharpest elbows to influence local decision making.”

In the article below from the ‘Local Government Lawyer’ website concerns are raised about the financial and time constraints forced on Local Authorities trying to administer the ‘Rights’.

“Worth noting is that land that used to further the social wellbeing and social interests of the local community ‘in the recent past’ will still be caught by the definition if it is realistic to think that there is a time in the next five years when it could be used to further (whether or not in the same way as before) the social wellbeing or social interests of the local community.

This definition is potentially very wide and would include amenities that have closed ‘in the recent past’ (which is up to the local authority to decide) but could be re-opened as something else, as long as the new activity still serves the community.

The net effect of this is likely to cost local authorities both time and money, as they will need to set up (in a form to be prescribed by regulations), publish and maintain, a list of nominated assets and a list of unsuccessfully-nominated assets, deal with requests to add or remove assets from the list, act as an intermediary between the landowner and the community group wanting to bid for the asset, publicise notices of disposal, compensate landowners and enforce the provisions.”

All in all, the right of the property owner to challenge a listing linked with the communities lack of power in forcing sales and the right of the vendor to reject an offer appears to put the whole basis of the ‘Community Right to Bid’ on very shaky ground!

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