1. Introduction - The Community Right to Bid was introduced by Part 5 Chapter 2 of the Localism Act 2011 based on a non-statutory guide in the September 2011 ACV Policy Statement . It operates in relation to properties which qualify as “assets of community value”. The use of such terms perhaps suggests a greater right than is actually conferred. It seeks to strike a balance between landowners and community enthusiasts. In doing so it probably offends both sets of interests. It is neither a right to buy nor a pre-emption right (unlike in Scotland) but a right to bid leaving the landowner free to proceed with a disposal as it wishes. If a community group is interested a moratorium is imposed to allow the bid by a community group to be organised.
This right is part of a parcel of community measures focused on by the 2011 Act – Community Right to Bid; Community Right to Challenge; Community Asset Transfer; Community Right to Reclaim Land; and Community Right to Build. This right seeks to address the concern that properties which are or have been used for the benefit of a local community are being developed and lost to the community. It does so by providing a procedure by which properties may be nominated to be added to a list of community assets maintained by the local authority and then allowing time in which a community group can arrange a bid to acquire the property if the owner intends to dispose of it. At present the period is six months from notification of the intention to dispose of the property if a community group expresses interest within six weeks of notification of the decision to dispose of the property. Crucially the right does not confer a right to compel an owner to accept such a community bid even if the bid equals or exceeds any other offer unless the owner is a charity or trustee. There is no statutory pre-emption right as under the Landlord and Tenant Act 1987.
2. Concerns – the ACV regime raises concerns with each set of interests affected by it.
(i) Property owner - from a property owner’s perspective there are two particular concerns if it is listed as an asset of community value. One is that it will deter interest if the owner wishes to sell. This has been expressed as a particular concern by publicans and companies owning chains of public houses. Applications are not infrequently made when the property is being marketed which is calculated to worry any owner. The other concern is that it will deter development of the property. There is then the more general concern that the current regime is a starting point and the right will be gradually extended so that once listed the restrictions could be increased in the future. This is illustrated by two recent developments. First a recent House of Commons committee has proposed that the six month moratorium be extended to nine months (see section 12 below). The second is the recent statutory instrument excluding a listed or nominated public house from the application of the permitted development rights regime. The latter is clearly very significant in the context of pubs because prior to this even if listed as an ACV it was still possible to covert to another use such as a fast food outlet or even a furniture store without the need to obtain a fresh grant of planning permission. Now that is not possible and it is necessary to obtain a fresh planning permission (see section 9 below).
(ii) Local community - from the local community’s perspective the right merely defers a disposal and does not allow the community to compel a purchase which is why so few listed properties have been acquired for the community. As yet listing does not (save as regards public houses) result in greater control over the use of the property and this is particularly a concern when the character of the property is such that a change in use can occur without the need for a fresh planning permission due to the application of permitted development rights. For example, the George IV pub in Brixton was listed but it had been sold to a food retailer prior to listing. The pub was then converted to a supermarket after the listing. This has been particularly prevalent with pubs which have been converting to supermarkets at the rate of two a week in the two year period beginning January 2012. Other pubs have been converted to furniture stores or fast food outlets.
(iii) Local authorities – separate from the owner and the community is the local authority which is required to administer another regime and which regime most unwelcomely from the authority’s point of view imposes a potential financial burden on it. Not only does the authority have to operate the system but if loss is caused to a property owner by listing then the authority is required to compensate the property owner (see section 11 below).
Local authorities will also be affected as property owners. A number of applications have been made by town councils in relation to properties owned by the Borough or District Council administering the list. This can place the Borough or District Council in a difficult position particularly when the property is also on the Council’s list of assets to be disposed of by that Council. In such circumstances there is an actual conflict of interest which is not addressed in the regime.
3. Operation of regime to date – the February 2015 report of the Communities and Local Government Committee on Community Rights (“the February 2015 Report”) states that just under 2000 properties have been listed but at most 11 have been purchased by the community with the most prominent being the Ivy House pub in Nunhead. In all there have been 122 community bids of which 60 have failed and 27 were then still outstanding. The absence of purchases has not prevented the making of nominations with increasing enthusiasm particularly in respect of public houses and football stadiums. By far and away the greatest number of applications have related to public houses as this has been seen as a means by which the continuing wave of closure of pubs can be stemmed and efforts made to revive the pubs. Just over 30% of listed assets are pubs and eleven of the eighteen reported substantive appeals have related to pubs.
However, there is a wide range of properties which have been the subject of applications including sports fields and clubs, gyms (Hackney), village shops, café, tea rooms, schools (former Penkhull infants school Stoke), post offices, pharmacies, hospitals, health clinics, surgeries. ambulance station, theatres, libraries, museums (Type Museum Stockwell), swimming pools, ice rink (outstanding nomination at Ryde) Turkish baths (Newcastle), community centres, schools, allotments, churches and chapels, scout huts, allotments, car parks, public toilets (Penge), bus shelters, phone boxes, war memorials, fields (such as Pier Field Skegness as yet undecided), windmills, community gardens (at Portishead produced from “eyesore” vacant land), parks such as Dulwich park, public amenity land, a lake, footpaths, cycle tracks and greens. Strikingly, and imaginatively, successful applications have been made in relation to the Lakeland fell Blencathra and the Undercroft at the South Bank used for skate boards as well as the Stockwell Skate park. Stickle Tarn in the Langdales has also been listed in response to the plan by the Lake District National Park Authority to sell off six beauty spots. Pinewoods comprising 96 acres of semi-natural woodland near Harrogate in Yorkshire has been listed as has been Tunbridge Wells Commons.
However, listing can fail to achieve its objective not just because the community bid is not accepted and the asset sold to a purchaser other than the community bidder. The use of the listed property may be changed notwithstanding the listing particularly if the permitted development rights regime applies to the listed asset.
4. Qualifying Assets – the regime applies to unbuilt-on land and to buildings or to a combination of both unless excluded (as to which see section 6 below). It does not matter who is the owner including the Crown Estate and local authorities. It does not matter whether the asset is owned by a commercial concern or a non-profit making body. It does not have to be in single ownership.
To qualify statutory criteria must be satisfied. These are set out in section 88 of the 2011 Act (for full wording see attached section at end of paper). Unfortunately this criteria is formulated in general terms with no definition provided for some important phrases and no real guidance. The official non-statutory guidance in the DCLG Guide indicates that this is deliberate with the intention that each local authority will determine its own meaning for such phrases. There is no requirement that such meanings should be publicised, for example, on the authority’s website. As a matter of practice some authorities do provide such on-line guidance. This is helpful but needs to be regularly reviewed in order to take on board the appeal decisions. In a number of cases judges of the First-tier Tribunal have adopted a different interpretation from that taken by some authorities. What constitutes “recent past” is an obvious example. Some authorities have considered this means the last five years but that has been vigorously rejected by the judges.
Such an approach to the formulation of a regime which adversely affects property rights is objectionable in principle but if adopted should at least require that there is certainty as to the approach adopted by a particular authority.
The potential for uncertainty is increased by the criteria not imposing absolute requirements. The relevant test is not whether the criteria have been satisfied but whether in the opinion of the particular authority the criteria has been satisfied. Normally this would mean that a decision by an authority that the criteria has been satisfied will not be capable of being challenged on the straightforward basis that the decision is wrong. Instead it would be necessary to show that the authority has made a decision that no reasonable authority would have made or there has been an error of law so that judicial review is justified based on the Wednesbury principle. The authority cannot adopt an interpretation of the statutory wording which is incorrect (Tesco Stores v Dundee City Council  UKSC 13).
However, when a decision to list is the subject of an appeal the present approach is that the appeal is a simple rehearing of the matter and so is not limited to considering the narrower grounds of judicial review and should not give significant weight to the Council’s decision (para. 7 in Patel v Hackney BC). At some stage I would expect this approach to be challenged. If correct there is no point in having the reference to the authority’s opinion which is out of line with other areas.
However, that is not the complete picture. At present there is no appeal from a refusal to list. A nominator can only challenge a refusal to list by way of judicial review. I have seen this with a case in which a local authority refused an application by a Town Council to list a property owned by the authority which was used by a mixture of commercial tenants and community tenants including the Town Council holding council meets there. The issue raised was whether or not the community uses were ancillary and there was a threat by the Town Council to commence judicial review proceedings. If proceedings are commenced in such circumstances will the Wednesbury principles apply even though they do not with listing appeals under the regime? There would seem to be justification for any approach other than to apply the Wednesday principle as was accepted to be the case with Shropshire Council’s refusal to allow a claim for a demolition deduction under the Community Infrastructure Levy (“CIL”) regime (R(oao Hourhope Limited) v Shropshire County Council.
5. Qualifying criteria - in deciding whether the statutory criteria is satisfied the authority has to adopt a two stage approach. The first stage is concerned with a consideration of the current actual use of the nominated property and then if the actual use condition is not satisfied the second stage is concerned with a consideration of use in the recent past. If the criteria are satisfied on the first stage that is sufficient and there is no need to proceed to the second stage.
5.1 Current actual user –
(a) Conditions - the first stage is for the authority to form an opinion as to whether the following two conditions have been satisfied in relation to the nominated property if there is a current actual use which is a community use. These two conditions in section 88(1) of the 2011 Act are:-
(i) the land or building is currently being actually used to further the social wellbeing or social interest of the local community (“community benefit”) and this use is not an ancillary use;
(ii) it is realistic to think that there can continue to be use of the land or building which is not ancillary and which will further community benefit. This future use for community benefit is not limited to the current use and so an entirely different community use can be proposed.
(b) social wellbeing/social interest - the statutory regime contains no definition of “social wellbeing or social interest of the community” save that “social interests” include in particular each of cultural, recreational and sporting interests (section 88(6)). Each local authority is to decide what it considers falls within the phrase. The benefit must be for the community and not individuals so that, for example, a nomination of an independent school will fail. The nomination of All Saints Pastoral Centre in London Colney was refused because it operated as a residential educational facility which was not viewed as being a community use. Community centres and village halls are very obvious candidates for nomination. It is not limited to non-profit making uses but also covers commercial uses. As well as pubs (whether or not in use) football stadiums such as Old Trafford and Oxford City have been listed.
Magistrates’ courts, fire stations and police stations have been refused by some authorities on the basis that they are not within the type of community use required. Bromley rejected a former police station because the public only had access to a small part of the building. Other authorities such as Waverley have listed police stations. Some authorities consider that car parking does not qualify whilst others do. Bus depots, Mecca Bingo halls and nightclubs have also been refused as not satisfying the criteria yet at least one authority has listed a bus station. It emphasises that the manner in which the listing regime is operated can vary from one authority to another with different views being held as to what types of property may qualify for listing.
Interestingly in the General Conference of the New Church v Bristol City Council Judge Lane considered it significant that the list of social interests did not include religious interests. He then went on to hold that “it does not encompass religious observances in a church, mosque or synagogue etc…”. Such a building will only come within section 88 if there is non-ancillary use which furthers social wellbeing or social interests of the local community (as to non-ancillary use see (d) below). Some authorities have listed churches and chapels but possibly on the basis that religious worship is a use for a community benefit.
I have seen a case in which the focus of the nomination was on retaining the building to enhance the character of the local area. It involved a boat house by the side of a canal. My view is that this is not sufficient to cause the building to qualify as an ACV. The focus should be on the use to which the building is put rather than the physical appearance of the building which should be dealt with exclusively by planning law.
There have been a number of appeals to the First–tier Tribunal General Regulatory Chamber. One concerned the Kassam Stadium which was listed by Oxford City Council and was appealed by the owner in Firoka (Oxford United Stadium) Limited v Oxford City Council. The core issue was whether the football use should be viewed as ancillary. In deciding this issue Judge Nicholas Warren had to consider condition (i) above. He held that this condition had been satisfied. His justification for this holding started at paragraph 10 of his judgment:-
““Social interests” includes in particular cultural, recreational and sporting interests.
11. It can hardly be denied that one of the current uses of the Kassam Stadium is to provide a home ground for Oxford United FC. Is that an “ancillary” use? It is true that there are only about 25 match days a year. In my judgment, however, the cultural, recreational and sporting interests with which I am concerned extend wider than the hour and a half or so for which 20 – 30 men play a game of football. The role of a football club in the local community goes far beyond that. This point is made in written submissions from OxVox the supporters’ trust which nominated the stadium as an ACV. The existence of a home town club, intrinsically linked to the use of its home ground, fosters community pride; stimulates daily conversations in pubs, work places and online; forges friendships and encourages the mix of generations. It was a recognition of the importance of this, no doubt, which resulted in the planning application for the whole stadium being made in 1996 “on behalf of Oxford United FC”. “
In a recent appeal concerning the Black Bull in Lowick – Hawthorne Leisure Acquisition Limited v Northumberland CC - it was argued that the nominated property was really a hotel rather than a pub. This was rejected by Judge Warren who considered that it was a thriving pub with four bedrooms. The community benefit arose from activities such as pub quizzes, over 60s events and fundraising for the local football club. The judge considered that the local pub encouraged friendships, conversation and the mixing of classes and generations. It was not exempt from listing as it was neither a hotel nor was the primary use the letting of guest rooms (para. 20).
It was argued in St. Gabriel Properties v Lewisham LBC that due to the dangers of alcohol and the need to reduce drinking the Windmill pub in Lewisham harmed the social wellbeing of the local community. This was unsurprisingly rejected.
These cases illustrate the type of factors to be taken into account, their indeterminate and the nature of the exercise to be undertaken. There is plenty of scope for divergence between local authorities in approach and conclusion.
(c) realistic continuation of community use – in the Gullivers Bowls Club v Rother DC Judge Warren rejected the argument that this required the anticipated community activity to be commercially viable or even to have a foreseeable long-term viability (para. 12). In the Tribunal decisions there is a very marked acceptance that financial problems can be overcome if there is a strong sense of local community especially if it has engaged with the particular property and has available to it credible advisers with experience of community projects. This particular aspect is more likely to be a live issue in the context of “recent past” cases than where there is a current actual use which already furthers a community benefit.
(d) Ancillary – to satisfy the two conditions the relevant community use must not be an ancillary use of the property. For example, if school playing fields are used on a Saturday by a local sports clubs or a club for disabled youngsters uses a farm one morning a month that community use will clearly be an ancillary use.
However, there is no definition or guidance as to what this means and so it is left to each local authority to decide. It is an issue which can cause real problems for local authorities. In a briefing paper for the House of Lords Report Stage prepared by Locality it was stated that ancillary meant “an incidental and minor feature of the use of asset”. I have seen cases in which it is argued on behalf of the nominator that all that is required is that the community use is not supportive of a main non-community use. In my view this is not correct. For example, if a local disabled group comes to a farm once a month that use is not supportive of the principal agricultural use of the farm but that should not cause the farm to qualify as an ACV.
As mentioned above this was the core issue in the Kassam Stadium case. This was used for 25 matches a year by Oxford United FC. It was also used by the London Welsh Rugby Club. The proportions of stadium revenues derived from the two clubs were 35% Oxford FC and 65% London Welsh. In addition hiring out the conference facilities was said to produce nearly £500,000 a year which exceeded the revenues of either club. The issue was whether the use by the Oxford United FC was sufficient to satisfy the actual user statutory conditions.
Judge Warren made the point that it is not necessary that the community use is the “primary use” (para. 9) which the legislators could have easily provided but omitted to do so. This is in contrast to the view expressed by Locality that a secondary use is ancillary and that the community use must be the principal use.
Nor did the judge accept the submission that the Community Right to Bid regime should be read as part of the general planning law. He accepted that material planning information will form an important part of the factual context but that planning concepts such as “planning unit” should not be imported. This is part of a trend. The CIL regime has a general exclusion of planning definitions from the Planning Acts albeit that the two subjects are linked. In consequence terms used in the CIL regime such as “lawful use” will bear their own interpretation.
In that case he held that the use by the Football Club was not ancillary and so because it was a community use the current actual use condition in the first stage was satisfied. It was enough that the football use was a significant use even though not the predominant use.
Mixed use of a nominated property can arise not infrequently. As mentioned above it can occur with properties owned by local authorities which are in part let for commercial uses and in part used for community purposes. The test does not involve determining which use is the primary use. Rather it is necessary to look at the overall picture to ascertain whether the community use is a significant use in its own right in the context of the particular property and not subsidiary to another major use. All the circumstances will need to be looked at including the history of the building and the nature of the connection with the local community.
In contrast to the decision in the Kassam Stadium case the judge upheld the appeal against listing in Dorset County Council v Purbeck DC on the ground that the community use was ancillary use. School playing fields had been listed on the basis that they were used by two local sports clubs. The school closed and was used temporarily as an arts centre. There was a proposal to sell the school for housing and use the proceeds to purchase replacement fields for two nearby schools. The judge disregarded the statutory provisions governing the control of the playing fields but considered that the reality was that he was dealing with a school and attached playing fields even though the schools were closed. In consequence the playing fields were ancillary to the school. This will not always be the outcome. In Idsall School v Shropshire CC the listing of the playing fields of a private school were upheld. In that case there was significant use of the playing field through a community leisure centre which had a formal joint user agreement with the school.
A more analytical approach was adopted by Judge Lane in General Conference of the New Church v Bristol CC supra. The original and sole purpose was use as a church and this was the primary purpose on the facts. The building had been used for dance classes, Brownies and other such uses but this had dwindled to only one club on a regular basis. In consequence “the reality was that the church was still a church; not a community or social centre”. In consequence the uses were ancillary and the church should not have been listed.
In those decisions it is emphasised that the issue is “essentially fact-specific” (Judge Lane para. 16 in the Idsall School case supra). An owner of land who allows ancillary use of the land would be well advised to keep records regarding the use in case a nomination is made in respect of the land.
(e) Decided points – in the appeals heard by the First-tier Tribunal a number of specific points relating to the first stage actual use condition have been decided. These include:-
(1) Small outfits – in the Kassam Stadium case it was argued that the community right to bid regime is intended to apply only to simple units such as village shops or halls but not to complex situations such as football stadia. This was rejected. It is unfortunate both that there is no guidance as to how the regime should be applied to more complex sites and that there is not the ability to provide for the community facility to be located on a different part of the site. Such an approach is permitted in the context of planning applications.
(2) Car parks – in the Kassam Stadium case both the main car park and the overflow car park were included in the listing albeit shared with an associated leisure complex. Both were part of the original planning application. It was held that they were correctly included in the listing (para. 15/17).
(3) Sites awaiting construction – in the Kassam Stadium case part of the property listed including the site on which the west stand was to be constructed. It was held that the use to which the stand once completed was to be put in the future justified its inclusion in the list (para. 18).
(4) Use by Trespassers – Judge Warren has held that use by trespassers can be taken into account. This was in Higgins Homes plc v Barnet LBC which concerned land which had been leased in 1910 to local residents to be used as a private recreation ground. The lease expired in 2006 but the use continued after the purchase of the site by a developer. A village green application had been made but failed. The basis for this decision was that it is “a matter of common sense” that it will not encourage bad behaviour or breed disrespect. This would seem to miss the point that it is reliance on a wrongful act. This decision was applied by Judge Lane in Banner Homes Limited v St. Albans City and District Council which concerned meadows in respect of which Banner Homes hoped to obtain residential planning permission. An argument on behalf of Banner Homes was that the recreational use of the meadow was a trespass. It was material that there was no evidence of criminal damage or other criminal activity (para. 34) and that the use was equivalent in value to the sorts of games and pastimes envisaged by the town and village green legislation. Judge Lane refused to insert “lawful” before “use” in section 88 but did indicate that many unlawful uses would not further community benefit such as raves.
(5) Use of easement – one submission in the Banner Homes case was that use of two public footpaths across the meadows was sufficient to form the basis for satisfying the user condition in section 88 in respect of the whole of the meadows. This was not accepted by Judge Lane. This is linked in with the issue whether a visual amenity can constitute a community benefit.
(6) Owner’s ECHR rights – it was argued in the Kassam Stadium case that the listing was a breach of the owner’s rights under Article 1 of the First Protocol. The judge stated without reasons that he was satisfied it was not. In the St. Gabriel case he expressed doubt that the rights are engaged but considered that the issue is not “one to be considered at this level at this stage.” (para. 35).
(7) Part of nominated property not in use – merely because part is not in use it does not follow that it should be excluded from the listing. This point was considered in Gullivers Bowls Club v Rother. The whole of the Bowls Club had been listed notwithstanding that one of the two bowls greens had been closed along with two small outbuildings alongside that green. This represented about 37% of the site. The Club objected on the basis that there was no current or recent use for that part of the site. Judge Warren considered that it was a feature that sports club may have some facilities that are redundant (para. 8) but it would be artificial to split that part off. He held that it was correct to list the whole site.
(8) Visual amenity – it was argued in the Gullivers Bowls Club case that the social wellbeing of the local community was furthered by the visual amenity enjoyed by the residential care homes overlooking the bowling greens. Judge Warren doubted that this could ever be possible although if there is a statute or mural that might be a special case (para. 10). A similar point arose in the Banner Homes case. Viewing flowers from a footpath would not have been actual use for the purposes of section 88 which the judge stated requires a physical use (para. 18) otherwise any land would run the risk of being listed merely because it could be viewed from the public highway (para. 19).
(9) Motive – nominations with a view to preventing development are not matters which are relevant in this regime but should be addressed in the context of the law relating to development control (para. 32 General Conference of the New Church v Bristol CC supra and para. 13 Idsall School v Shropshire supra).
(10) Compensation evidence – in the St Gabriel case the developer had provided evidence to the authority as to the amount of compensation it would be claiming if the pub was listed. If the review was not successful in having the pub removed from the list a claim would be made of £55,000. This had increased to £124,000 if the appeal failed. The judge deprecated such an approach as it places pressure on a public official. Although there may be pressure from the owner to put in such evidence in my view the sensible step is not to put such evidence or claims forward until the issue of listing has been finally resolved. The local authority is fully aware of the risk of compensation claims and does not need it to be spelt out.
In that case an attempt was made in the listing appeal to deal with the authority’s refusal to grant compensation. The judge rightly refused to deal with this as the procedure relating to compensation review and appeal had not been complied with (see section 11 below).
(11) Local clubs - evidence of the membership of a local club which makes use of the asset for community benefit is not required. The local authority is not required to investigate the membership register to find out the proportion of members with a local address (para. 15 Higgins v Barnett LBC supra). It had been argued in that case that use by a private members club could not qualify but that was abandoned and the judge considered that to be correct (para. 14).
(12) Planning matters – the planning position of the nominated asset will be relevant. In Moat v North Lincolnshire DC account was taken of the decision of the planning inspector on an appeal against refusal to grant a planning permission to use a pub as a residence including the conclusion that “the loss of an important local service is not justified.”
5.2 User in the recent past –
(a) Conditions - in the event that there is no current actual user of the nominated property then the process moves on to the second stage. If the first stage does not result in the land or building being treated as an ACV then it has to be determined whether the next two conditions in section 88(2) have been satisfied. These two conditions are:-
(i) there was a time in the recent past when an actual use furthered community benefit which was not an ancillary use (the wording of this condition is different to all the other conditions in that it refers to furthering the social wellbeing or interest of the local community rather than social wellbeing and social interest but Judge Warren read in the word “social” in the St. Gabriel case at para. 27);
(ii) it is realistic to think that there is a time in the next five years when there could be use of the land or building which is not ancillary and which will further community benefit. As with the second condition of the first stage actual use conditions this future use for community benefit is not limited to the same use as occurred in the recent past.
(b) Recent past - With regard to these conditions one question is what is meant by recent past. There is no statutory definition or guidance. Some authorities, such as Thanet DC, have treated the recent past as being the five year period preceding the nomination. The nomination of the Brighton Hippodrome was refused as it had been closed for seven years and so there was no community use in the recent past.
In Scott v South Norfolk DC Judge Warren said that the phrase “in the recent past” was deliberately loose in contrast to the five years in the second condition and that it was not for him to undermine that by give the phrase a meaning which is certain (para. 7). In that case the pub had been closed for six years and the authority stated that there had been no community use currently or in the recent past on the basis of which finding could only result in a decision not to list albeit that the authority did list and this was set aside on the appeal. This was also the judge’s stance in Worthy Developments v Forest of Dean DC when he stated that it could not have been intended to import the five year period from the future condition when Parliament had failed to set out a precise period for the past condition.
In the official guidance it is suggested that if there has been user of the land for purposes such as use by the Ministry of Defence for live ammunition practice the period could be ten to twenty. This sheds little light on the type of cases which will normally arise. It is no surprise that with such uncertainty the risk of listing will discourage developers or even ordinary sales.
The actual community use in the recent past does not have to be shown to be for a substantial part of that recent past although trivial or very temporary use will be disregarded (para. 15 in the judgment in the Worthy case).
In Reed v Shropshire CC the Pheasant pub had been listed having closed in March 2012 due to dwindling trade. A nomination was made in April 2013. There was no dispute that whilst open as a pub this furthered the social wellbeing of the local community and was in the recent past. Interestingly this is now a community pub.
(c) realistic prospect – a prime battle issue will be whether there is a realistic prospect that there could be a future community use of the nominated property which is not an ancillary use. The test does not require the likely future use of the relevant building to be determined but rather to determine whether future community use is one of a number of realistic options for the building (the Worthy case – paragraphs 18 and 19). The test is not whether such future use is wholly unrealistic but whether it is realistic to think that there could be a relevant non-ancillary use in the next five years (Judge Lane at para. 26 in General Conference of the New Church v Bristol CC supra.) In Evenden Estates v Brighton and Hove City Council Judge Lane stated “that what is “realistic” may admit a number of possibilities, none of which needs to be the most likely outcome”. This approach was repeated by Judge Lane in Gibson v Babergh DCwho added that the possibility must not be “fanciful” (para. 18).It is another issue in the ACV regime which is very fact-sensitive issue.
The owner’s stated intentions should be taken into account “as part of the whole set of circumstances” (para. 11 Warren J. in Patel v Hackney BC) but those intentions will not be decisive alone. This is shown by the actual decision in Patel v Hackney. It concerned the Chesham Arms pub which had been purchased by Mr. Patel who then closed it with a view to converting it into flats. There was evidence that there was interest in running it as a pub and that it had been run profitably. Mr Patel’s evidence was that the residential development was going to proceed. The judge considered that there were three planning possibilities and each was realistic. One option was that a planning application would be refused and the pub reopened (para. 16). This shows that it is enough that there are a number of realistic possibilities and one of them is a community use.
In contrast in Spirit Pub v Rushmoor BC Judge Warren considered that there was no realistic prospect that the Tumbledown pub would revert to use as a pub or any other community use. This was a pub which although first established in 1600 had been closed since 2008. Before the coming into force of the 2011 Act McDonalds had purchased it subject to a tenancy in favour of Spirit. In consequence a transfer to McDonalds was not caught by the moratorium provisions. Further shortly before the hearing of the appeal planning permission had been granted for use of the property as a restaurant/takeaway. Judge Warren considered that he should take account of these factors. McDonalds had acquired the property and secured the necessary planning permission so no other possibility was realistic particularly as large sums would be required to be raised for a community use and no-one had been motivated to run the pub during the five years of closure.
In Reed v Shropshire CC supra the judge accepted the evidence of the owner that the business had dwindled and no-one wanted to buy it but the argument on behalf of the Council was that there was more than one possible realistic outcome and one of these possibilities was that in the next five years its use as a pub might resume. In consequence the appeal failed and the pub remained on the list of ACVs. In fact it has recently re-opened as a community pub.
This point has been repeated more than once. An example is Worthy Developments v Forest of Dean DC supra which concerned another closed pub, the Rising Sun. The owners provided evidence that in the last five years the pub had only been open at the most for eighteen months and that this indicated that there was no realistic prospect that the use could be resumed in the next five years. With regard to such evidence Judge Warren stated that “I accept these demonstrate that there are obstacles. It is important, however, not to confuse commercial viability with what altruism and community effort can achieve.” (para. 21). Notwithstanding the financial problems the judge considered that this did not demonstrate that the proposals of the “Save Our Sun” committee were not realistic. Strong backing within the community is a factor that will be taken into account when deciding whether there is a realistic prospect of future community use (see also Gibson v Babergh DC supra).
A similar decision was made in Sawtel v Mid-Devon DC  but there the pub was still open and had been functioning for 100 years with no prospect of planning permission to change the use and with an active Parish Council showing a keen interest. The judge considered that notwithstanding the argument that the pub was not viable there was a realistic prospect that it would continue. Such an argument also failed in the St. Gabriel case.
In an appeal concerning the Black Swan pub in Idridgehay near Belper it had been used for nearly 200 years as a “traditional village pub” before being converting to a French-themed pub/restaurant in 1997. In 2012 it was purchased by a developer and the bar and kitchen were removed. Judge Lane refused an appeal on the basis that the wine bar/restaurant was a community use and with an injection of £100,000 it could start up again (Crodstone v Amber Valley BC). The justification for the judge’s conclusion was that locals used both the restaurant and the pub, going there to meet other locals and for community events thereby satisfying the recent past condition. A feature of this case as in many cases is that there was no business plan put forward by those supporting the listing. The judges have not regarded this as significant when considering whether future community use in the next five years is a realistic prospect. The absence of such “a fully worked-out business case did not prevent the appeal failing in Moat v North Lincolnshire DC supra in respect of the Dolphin pub in Althorpe. In that case on the facts Judge Lane considered that “it is realistic to conceive of a future for the Dolphin as a community-run not for profit enterprise.” (para. 14).
Even the failure to operate a pub successfully on a quasi-volunteer basis by the commercial owner will not by itself convince the tribunal that there is no realistic prospect of a future non-ancillary use of the nominated asset for community benefit. In the appeal against the listing of the Rose Hill Tavern in Evenden Estates v Brighton and Hove City Council Judge Lane considered that it leaves open the possibility of “a genuine community-run organisation operating the Rose Hill Tavern on a not-for-profit basis” (para. 14). Again it was emphasised that there was no need to support the listing with a worked out business plan. In that case what impressed the judge was that the action group has “committed assistance from individuals with relevant experience” (para. 16). The expected increase of the population in the ward by just over 430 students and the impact of the introduction of several hundred students on a public house was an additional factor taken into account by the judge in that case.
A further decision on this issue is Matterhorn Capital v Bristol City Council. In this case a scouts hut which had been used for sixty years had been demolished by the developer after listing and after the lease of the site had expired. The recent past condition was easily satisfied by the use of the hut for scouts, guides, a martial arts club and providing an opportunity for adults to volunteer. The issue was whether the future condition was satisfied. The point was made that a fresh planning permission would be needed but the judge did not foresee any difficulty in obtaining such a permission. Notwithstanding the increased financial burden due to the demolition the judge considered that it was still a realistic possibility that there could be a community use in the next five years taking into account the past sixty years of community use. The developer had yet to obtain planning permission for a residential development. Planning permission had been previously granted but only on condition that part of the site was available for community use.
However, in General Conference of the New Church v Bristol CC supra Judge Lane stated that although a formal business plan was not required the proposals did need to be realistic and in that case the suggested proposed use was “entirely speculative” (para. 29). There was no evidence to suggest that there was a real interest in the proposed use
Evidence directed at showing that the use is not commercially viable by itself will not be enough to persuade the judge that there is no realistic prospect of non-ancillary future community use.
6. Excluded land and buildings – three categories of land and building are excluded from the operation of the listing regime in accordance with Schedule 1 to the Assets of Community Value (England) Regulations 2012 (“the 2012 Regulations”) (see Second Schedule hereto for full terms of Schedule 1). The principal exclusion relates to residences. The other two exclusions are caravan sites and land held by a statutory undertaking for its operations. The latter covers transport complexes such as airports and railway stations. For example, one of the grounds for refusing a nomination of Plymouth Airport was that there is excluded from the listing regime land regulated by the Civil Aviation Authority.
The residence exclusion covers not just homes but includes hotels, houses in multiple occupation and holiday dwellings. The exclusion of a residence extends to the land connected with it but probably not other buildings save for those ancillary to the residence. The extent of the land excluded does not require an elaborate investigation of what constitutes the house’s curtilage. Instead it will cover all land which with the residence is in single ownership provided that any part can be reached from every other part. If a road, canal, river or railway splits the land then this will not prevent the requirements being satisfied if but for that intervention such access would be possible.
Importantly it does not cover vacant land with planning permission for the construction of a residence or even land with an uncompleted dwelling in the course of construction. What is not clear is what happens if a dwelling is built on listed land. Should it then be removed from the listing or does it have to remain?
A building which is only partly used as a residence will still be listed if it otherwise qualifies for listing. This is intended to cover shops or pubs with integral living accommodation but the scope of this limitation on the residence exclusion could be unexpectedly wide. A home with part exclusively used for commercial or professional purposes would take the building outside the residence exclusion. Its operation could depend on what constitutes a single building which has been a vexed question for purposes such as rating and sewers. This provision could operate in a harsh and unexpected manner.
7. Community Nomination –
(a) Nominators - to be considered for listing the local authority has to receive a community nomination. This requires that the nomination is made by any one of the local parish councils or in Wales the community council or a voluntary or community body with local connections (section 89(2)). The definition is not identical to the community interest group which can make a written request to be treated as a potential bidder (see section 8(e) below).
What constitutes a voluntary or community body and what constitutes a local connection is governed by regulations 4 and 5 of the 2012 Regulations. A body other than a parish council must carry on activities which are wholly or partly concerned with the local authority’s area or a neighbouring authority’s area. If the body is an unincorporated body, company limited by guarantee or industrial and provident society then not only must it not be able to distribute any surplus to its members but the surplus must be applied in whole or part for the benefit of a local authority’s area or a neighbouring authority’s area. In the case of an unincorporated association there must also be 21 local members which requires them to have a registered address on the electoral roll for the local authority area or the neighbouring authority’s area. In addition to such bodies a voluntary or community body will include charities or community interest companies which have qualifying local activities and also neighbouring parish councils within reg. 4(2).
When a challenge is made in appeal proceedings to the validity of the community nomination the approach adopted by the judges is very relaxed as regards formal compliance with the requirements that must be satisfied by nominators. In the Hawthorne Leisure case supra a group of 25 local residents without a formal constitution was held to be a voluntary unincorporated association. The requirements as to the distribution of any surplus was treated as satisfied because there was no surplus but the judge did indicate that in appropriate cases the authority should seek a written assurance that no surplus would be distributed to members (para. 12).
The application of these regulations to branches of national organisations has been considered in St. Gabriel Properties v Lewisham LBC supra. The nomination resulting in listing in that case had been made by the South East London branch of CAMRA. It was argued that the nomination was invalid because CAMRA had no local connection. Judge Warren held that the nominating body was subject to a hybrid treatment. CAMRA is a company limited by guarantee and this in turn governs the characterisation of the branch and determines whether the requirements regarding distribution of surplus are satisfied. However, the activities of the branch rather than the national activities of CAMRA will determine whether the branch has a local connection. Even if wrong on this Judge Warren accepted that a branch could be an unincorporated body as this is a broad term including community groups of many descriptions. It is not necessary for such a body to have a written constitution containing a rule that any surplus cannot be distributed to members. It was open to the Tribunal to consider the evidence regarding the actual application of the body’s funds in order to decide whether the requirement regarding distribution was satisfied.
(b) Nomination – each local authority will normally provide a standard form for nominating an ACV. The nominator must
(i) describe the land including the proposed boundary. In some cases the boundary may be crucially important if the listing is to apply to part only of a holding.
(ii) provide details of the freehold and leasehold owners and occupants;
(iii) give the reasons for thinking that the authority should conclude that the land is of community value;
(iv) set out evidence of the nominator’s eligibility.
There is an emphasis on making such forms easy to complete. The problem with this is that it does not ensure that both the authority and the property owner are provided with a properly particularised statement of the justification for listing. Nor does it compel full supporting evidence to be supplied by the nominator. This can place an owner at a disadvantage in seeking to defeat the application within the specified time limit. It also runs the risk of repeated applications with repeated attempts to improve supporting evidence. Some applications can be remarkably informal written in manuscript with sparse explanation. This is unfair on landowners.
It has been reported that the Otley Pub Club has applied to Leeds City Council for a blanket classification of all 20 pubs in Otley. The Chairman justifies this on the basis that “they are an integral part of our historic town and part of its wide appeal.” Surprisingly the application has been accepted and all twenty pubs have been listed. It would not seem to be in line with the requirements of the regime. Some authorities have rejected a nomination of a single pub on the basis that there are other similar pubs in the locality. What is stop such applications being made in respect of other types of buildings such as shops?
(c) Timetable – an authority has eight weeks from receipt of the community nomination to decide whether or not to list (reg. 7). Following receipt the authority must take all practicable steps to notify the nomination to the local parish council, freehold and leasehold owners of the land, and any lawful occupants. There is no specific time limit for such notification and it will be important for any owners or occupiers that wish to respond to receive notification as soon as possible because the authority’s eight week limitation will be running. For the purposes of this regime an owner will be the freeholder if there are no leases with a term which when granted was for a term of not less than 25 years. If there is a lease with such a term of years then the owner of that leasehold interest is the owner. If there is more than one such lease then the owner is the leaseholder most distant from the freehold reversion (section 107).
There is no procedure providing a means by which a nomination can be opposed. However, it is to be expected that written representations by or on behalf of the owner will be considered by the authority. It is not the intention that the authority should only take into account information in the application for listing. Not only is such an approach fair to the owner but it is in the interest of the authority to receive the owner’s evidence and representations before listing because if it lists and then removes the asset on receipt of such evidence and submissions it runs the risk of having to pay compensation for loss caused by the listing.
Due to the timetable there is a need for an owner that wishes to oppose the application to focus on the key issue which is whether one or other of the tests in section 88 have been satisfied and to speedily assemble any evidence to support the opposition. From the owner’s point of view it is far preferable to successfully oppose an application because there is currently no appeal from a refusal to list.
(d) Mandatory listing – the authority is bound to consider any community nomination and if the nominated asset is in the authority’s area and “of community value” satisfying the requirements of section 88 then the authority must register the nominated asset on the list (section 90(2), (3) and (4)). There is no discretion which would allow the authority to refuse to register the asset. In the event that the authority decides that the asset does not qualify then the authority must supply the nominator with written reasons for not including the nominated asset on the list (section 90(6)).
(e) Publicity – the authority must publish two lists. One will be the list of ACVs and the other will be the list of failed nominations (section 94(1)). These will be found on the authority’s website. Copies must be made available for inspection and copies provided free of charge on request. Notice of the inclusion of the asset on the list must be given to the freehold or leasehold owner and occupiers of the land, the nominator and the local parish council (section 91(2) and reg. 5). Such notice must state the consequences for the land and the owner of listing and the right to request a review (section 91(3)).
(f) Renewed nominations – there is nothing in the statutory regime to prevent a renewed nomination for listing to be made if the local authority decides not to list. This is frustrating for landowners. Some local authorities will not allow a renewed application within five years of the decision not to list. It may be that some will reject an application if it is considered vexatious. That seems to have been the position in one case I saw with a renewed application. That must be justifiable if there is a legal objection to listing which cannot be overcome no matter how many times the application is made. It has been recommended by the House of Commons committee that there should be an ability to renew but only if there is new and material information.
(g) Duration of listing – the listing will last for a period of five years although the local authority has the ability to remove the asset from the list before the expiry of that period. It must be for a good reason as the authority is required not only to give notice of the removal to the freeholders and leasehold owners and occupiers of the property, the local parish council and the nominator but must also state the reasons for removal. A successful application to change the permitted use of the asset may result in it being removed from the list. A disposal within twelve months of the expiry of a moratorium period will require the asset to be removed. The authority should keep the list of ACVs under review to ensure that when appropriate assets should be removed from the list. There is nothing to prevent a fresh nomination for listing being made on the expiry of the five year period with a view to having the asset relisted.
(h) Land Registry restriction – when registered land is listed as an ACV a restriction should be entered so that a subsequent disposition can only be registered if a conveyancer has certified that the moratorium provisions have been complied with. In the case of unregistered land such a restriction should be entered on first registration (para. 2 Sch. 4 2012 Regulations).
8. Moratorium –
(a) General operation of moratorium – if an owner wishes to make a relevant disposal of a listed ACV then written notice must be given to the local authority which will trigger a moratorium (section 95). The details of the proposed disposal do not need to be provided in the notice. Once the notice is given an interim moratorium period will start to run in which period a relevant disposal cannot be made. This is a period of six weeks from notification to the authority of the owner’s wish to make a relevant disposal (“the notification date”).
If the local authority receives a written request from a community interest group requesting that it be treated as a potential bidder in relation to the listed ACV then the interim moratorium period shall be extended to a full moratorium period which is a period of six months beginning with the notification date. If no such written request is received by the local authority within the interim moratorium period then the owner is free to make the relevant disposal within the protected period which is a period of eighteen months running from the notification date. In the event that a written request is made triggering the full moratorium period then on the expiry of that period the listed ACV can be the subject of the relevant disposal during the protected period. The owner may dispose of the ACV upon such terms as it wishes and to whomsoever it wishes without any restriction. Once that protected period has expired without such a relevant disposal having been made then if the owner wishes to make a relevant disposal a fresh notice must be given and a fresh moratorium will be triggered operating again in the same way. This has happened recently with Fenton Town Hall which is owned by the Ministry of Justice and was listed in July 2013. The MoJ gave notice that it intended to sell and the Fenton Community Association requested that it be treated as a potential bidder. The six month period expired with no bid from FCA. Then the eighteen months expired with no disposal by the MoJ. Now it wants to sell and it will have to go through the same procedure again as a new moratorium takes effect.
(b) Relevant disposal – for the purposes of operating the moratorium provisions a disposal is a relevant disposal (section 96) if
(i) a disposal with vacant possession of the freehold estate in the listed ACV;
(ii) a grant of a lease for a term of twenty-five years or more; or
(iii) the assignment of a leasehold estate when the original term was for twenty-five years or more.
(iv) a contract to make a disposal within (i), (ii) or (iii) is a relevant disposal when the agreement “becomes binding”.
Certain types of disposal are excluded by reg. 13 and the Third Schedule to the 2012 Regulations (see section 8(e) below and the Third Schedule hereto for the full terms).
It would appear that a sale of a freehold subject to a lease is not a relevant disposal. The grant of a lease for a term which was less than 25 years when granted will not be caught. For a freeholder to grant a short term lease to A and then sell to A the freehold subject to that lease will run the risk of a sham argument or the application of the Ramsay principle but the wording of section 96 encourages such thoughts.
(c) Publicising the owner’s notification - following receipt of a notification of a wish to make a relevant disposal the authority must update the list of ACV’s by revealing that such written notification has been given, the date of receipt and when the interim moratorium period will end (section 97). The nominator of the particular listed ACV should also be informed in writing of such matters and in addition the authority should publicise such details in the local area. This is necessary to alert interested community bodies to the running of the interim moratorium period and the date by which a written request to be treated as a potential bidder must be received by the local authority.
(d) Written request – a written request to be treated as a potential bidder must be given by a community interest group. For these purposes a community interest group is the local parish council and any one of a charity, a company limited by guarantee, an industrial and provident society and a community interest company provided that such body has a local connection (see section 7(a) above). As soon as practicable after receipt of such a written request within the interim moratorium period the local authority must pass on the request to the owner of the listed ACV or inform the owner of the details. So far few assets have been purchased for the community through this process. The purchase of the Ivy House in Nunhead has received considerable publicity. There have been a few others as well such as the Kings Arm at Shouldham which was purchased for £225,000 of which £150,000 was raised by donations and the remainder by grant.
(e) Excluded disposals – this is an important aspect of the regime as regards landowners. Not all disposals are a relevant disposal subject to the moratorium. A disposal of the type set out in section 95(5) or Schedule 3 to the 2012 Regulations (their full terms set out in the Third Schedule hereto) will not be a relevant disposal and so can proceed without triggering the moratorium even if the subject matter is a listed ACV. This section will focus on those which are more likely to occur. The following disposals are included amongst those which are not relevant disposals:-
(i) gifts including a transfer into settlement (sub-section (5)(a);
(ii) distributions by personal representatives (sub-section (5)(b)) and a sale if to raise funds for one of a number of specified purposes such as the payment of taxes or the deceased’s debts (sub-section (5)(c));
(iii) changes in trustees (sub-section (5)(g)) or a transfer from a trustee to a beneficiary (sub-section (5)(h));
(iv) between members of a family (sub-section (5)(d)) and this is determined by whether the parties have a common grandparent (sub-section (7)(b));
(v) changes in membership of a partnership (sub-section (5)(i);
(vi) as part of a sale of an on-going business (sub-section (5)(f)). This has given rise to criticism as a route by which the moratorium can be avoided. For example, a sale of a pub business together with the pub will not be subject to the moratorium and the purchaser may then convert the pub to a store. It has been recommended by a House of Commons committee that this be removed.
(vii) part-listed disposals (sub-section (5)(e) and para 11 Sch. 3) – a disposal of land which is in part listed and in part not will not be a relevant disposal if both (1) the land is in single ownership (even if not the same registered title); and (2) each part of the land can be accessed from the other without having to cross land owned by a another person (para. 11(1) Sch. 3). Land divided by a road, railway, river or canal will still satisfy condition (2) if it is reasonable to think that the condition would be satisfied if such intervening land were removed and there was no such gap (para. 11(2) and (3) Sch. 3). These conditions are similar to those applicable when considering the extent of a residence excluded from the operation of the regime (see section 6 above).
This could be particularly relevant if land adjoining a residence in single ownership is listed. I have had to advise on a nomination that would have had such an outcome if it had been successful. The nomination had been made when the property was on the market and an offer made to purchase. I suspect that the nominator had not appreciated that listing would not have stopped a sale from going ahead without any wait.
There is nothing in the provisions to deal with a case in which the owner of a listed ACV acquires adjoining land which is not listed. If the two conditions are satisfied by the partly listed and partly not listed land now being in a single ownership can the aggregate holding be sold without being subject to the moratorium? It would appear that it can be.
(viii) Separation agreement relating to the care of a child dependent on one of the parties (para. 2);
(ix) Pursuant to a section 106 planning obligation unless the land was listed before the obligation was entered into (para. 4(1)(a));
(x) disposals pursuant to an option, pre-emption right, nomination, right of first refusal unless the land was listed when the option or right was entered into (para. 4(1)(b)). A grant of an option when an application has been made but not decided will mean that on the exercise of the option after listing there will be no moratorium and the sale can be completed without having to wait. This does not expressly cover an exchange of contracts prior to listing but the completion of such a contract will not trigger a moratorium because the disposal will be treated as having occurred when the contract became binding. An example of this is the Centurion pub in Chester which has been recently listed. Contracts for the sale of the pub took place in November 2014. The purchaser wants to convert it to use as a care home for which a fresh planning permission will be needed. The Council has advised that as the exchange took place before listing the moratorium provisions will not apply.
(xi) certain disposals in relation to compulsory purchase – the transfer back to the original owner after a compulsory purchase (para. 5) and the acquisition by statutory compulsory purchase (para. 8);
(xii) sale by way of enforcing security (para. 6);
(xiii) pursuant to insolvency proceedings (para. 7);
(xiv) inter-group transfer (para. 10).
An excluded disposal will not cause the land previously listed to lose that listing and so the transferee will have to abide by the ACV regime.
(f) Infringement – care must be taken to ensure compliance with the obligations imposed by the ACV listing regime. A disposal which contravenes section 95(1) and occurs during the moratorium will be ineffective (reg. 21(1)) unless the transferor having made all reasonable efforts to find out if the land is listed still does not know that it is listed when making the disposal (reg. 21(2)). There is no beating about the bush. The disposal does not take effect even if registered at HM Land Registry and if the purchase price has been paid. Presumably the parties must wait until the expiry of the moratorium and then execute a confirmatory transfer but by then all sorts of problem could have arisen. If the agreement was whilst the property was listed even a confirmatory transfer could be ineffective as it will be treated as occurring during the period of listing. Further the listing of the land will also give rise to a local land charge (section 100).
Unlike the amended legislation relating to the statutory pre-emption right in favour of flat owners there is no provision dealing with conditional contracts. Knowing that a nomination is to be made or is on foot can an owner enter a conditional contract to sell? If the owner does and the contract becomes unconditional after listing can the sale be completed without waiting? Is the agreement only binding when it becomes unconditional so that the disposal is treated as made at that date rather than the earlier date that the conditional contract is entered into (section 96(4))? In contrast a disposal pursuant to the exercise of an option granted before the subject matter was listed will not be a relevant disposal (para. 4(2)). Would put and call options be a better solution? The uncertainty regarding this area of the regime is undesirable.
Will a contract to sell a listed ACV entered into after the giving of notice of an intention to dispose on terms providing for a deferred completion fixed for after the expiry of the moratorium period be an infringement and thus ineffective? It will be as it is a contract to sell which is a relevant disposal.
9. Planning –
(a) Control of use – listing brings in controls relating to the disposal of the ACV but not as to the use of the listed ACV. This means in particular that the owner retains the unfettered ability to change the use of the listed ACV in accordance with the Permitted Development Rights. For example a pub can be converted to restaurant, office, residential or retail use. Listing will not, therefore, necessarily achieve the desired objective of saving the asset for the community as exemplified by the George IV pub (see section 3 above).
(b) Material consideration - at present listing does not automatically cause the listing of the ACV to be treated as a material consideration when considering planning applications relating to the listed ACV. In the Government Policy Statement (September 2011) it states that “..it is open to the Local Planning Authority to decide that listing as an asset of community value is a material consideration if an application for change of use is submitted, considering all the circumstances.” It may be taken into account by the planning authority but does not have to be.
This point was emphasised in R (on the application of East Meon Forge and Cricket Ground Protection Association) v East Hampshire District Council. The case concerned a planning application for permission to convert the first floor of the Forge to a flat. The Forge in Petersfield had been the site of the ancient village blacksmith and was listed as an ACV as it “has a special resonance for the local community and furthers the cultural interest of the community”. The planning officer concluded in his report that the listing had very little bearing on the proposed development and should be given negligible weight. In the judicial proceedings this conclusion was challenged. Lang J. DBE stated at para. 100 that in so far as this advice “was based upon the inherent limitations of the community asset scheme, it was a matter for the Committee to decide upon in the exercise of its planning judgment. Accordingly the officer could properly so advise.”
In some areas the listing of an ACV will be treated as a material consideration for the planning purposes. A planning application to change the use of the closed and listed Pear Tree pub in Hildersham has been refused citing the importance of the pub to the community as illustrated by the listing as an ACV. However, even if a material consideration it may be possible to overcome this by the provision of an alternative community facility. For example, the Queensbury public house in Willesden Green was listed by Brent LBC. On an application for planning permission to demolish and create 53 residential units together with a new pub and communal facilities the Inspector, B. Lyons, took account of the listing in her decision on 23rd March 2015 but did not consider that it was a reason for refusing permission because a new public house was to be provided and so there would be no net loss of community facilities (para. 72). This allows the facility to be replaced possibly at a different location which is not allowed for in the ACV regime. The application was refused on the ground of harm to the character of the area and its impact on the local heritage.
10. Review and appeal –
(a) Nominator - a nominator currently has no right to request a review or appeal from a refusal to list. This means that if a nominator wishes to challenge such a decision the only option is to pursue judicial review proceedings. I have seen threats to take such a step but it means that the challenge will be governed by the Wednesbury principles and the Court will not consider the listing nomination afresh.
(b) Owner – there is a two stage procedure by which an owner may challenge a listing decision as is the case with the Community Infrastructure Levy regime. The first stage is to request a review and if that does not result in the removal of the asset from the list it is then possible for the owner to appeal to the First-tier Tribunal.
(i) Review – a written request must be made within eight weeks of the giving of written notice of the listing of the property (para. 1(1) Sch. 2). The authority has the ability to extend this period. If it is not reasonably practicable for the authority to give that notice and it has to take reasonable alternative steps for the purpose of bringing it to the notice of the owner (section 91(2)) then the eight week period runs from the completion of those steps (para. 1(2) Sch. 2). The review will be conducted by an officer with appropriate seniority but who has not been involved in the original decision (para. 4 Sch. 2). This procedure applies even if the owner is the local authority.
The owner may require an oral hearing and if the owner does not then it is for the local authority to decide whether one is needed (para. 7 Sch. 2). The owner may appoint a representative (para. 5(1) Sch. 2) and documents may be sent by the authority to the representative rather than the owner (para. 5(2) Sch. 2). Representations may be made by both the owner and the representative (para. 8 Sch. 2). It is for the local authority to determine the procedure to be followed and notify it to the owner (para. 6 Sch. 2).
The decision on the review must be made within eight weeks of the written request for the review (para. 9 Sch. 2) unless the owner agrees a longer period.
A review can result in the removal of a property from the list. An example is the Farmer’s Arms in Woolsery North Devon which was removed on review. However, having been removed on a review there is nothing to prevent it being nominated and added to the list subsequently. In Gibson v Babergh DC the Bull Inn in Thorpe Morieux Suffolk was removed from Babergh’s list of ACV on a review in January 2014 but was added back in July. On appeal Judge Lane noted that there was no legal impediment to such a listing.
(ii) Appeal – if the review decision is to retain the listing then the owner or a successor may appeal to the First-tier Tribunal (reg. 11). Matters concerning Community Right to Bid are allocated to the General Regulatory Chamber and the procedure is governed by the Tribunal Procedure (First-tier Tribunal) (General Regulatory Chamber) Rules 2009/1976 (as amended). The time limit is 28 days from the review decision (rule 22(1). There have been a number of such appeals and the majority end with the review decision being upheld but not all. To date there have been twenty decisions (including two on costs alone). The listing will not be suspended pending the determination of the appeal and so the moratorium and infringement provisions will apply if the owner wishes to sell before the appeal is decided.
At present the appeal hearing is treated as a rehearing conducted with reference to the facts as at the date of the hearing so that events occurring between the date of the listing and the appeal may be taken into account (Gullivers Bowls Club supra para. 18 and para. 9 Spirit Pub v Rushmoor BC supra (planning permission granted after listing) and Patel v Hackney supra at para. 7). Judge Warren has emphasised that this type of appeal is an ordinary appeal and not subject to the narrow limitations applicable to judicial review proceedings applying the “Wednesbury unreasonable” principles (para. 3 Scott v South Norfolk DC). If it is right that the hearing is to be a rehearing then circumstances occurring between the review decision and the appeal hearing should be taken into account. In the Spirit case Judge Warren relied on Quilter v Maplesdon (1882) 9 QBD 672 and Ponnamma v Arumogam  AC 383. However, those cases do not establish that the appeal hearing should necessarily be a rehearing. Although Judge Warren when considering this point in the Patel case refers to the conditions for listing being prefaced by the words “in the local authority’s opinion” he does not explain what effect is given to them when the appeal is a rehearing.
Statements made at any review hearing by or on behalf of any of the parties may be part of the evidence considered by the appeal judge in the context of the overall information but are unlikely to be treated as a concession (para. 13 the Crodstone case).
It is possible for the parties to agree that the appeal will be decided on the basis of written representations without an oral hearing as happened in Spirit Pub Co v Rushmoor BC (para. 6) and Dorset CC v Purbeck DC (para. 3). Often the community interest group which has nominated the property for listing will also be joined as an interested party.
An appeal can be withdrawn before the hearing and unless the appellant has acted unreasonably in bringing or conducting the appeal no costs order will be made against the appellant (Magic Lantern case – Red Star Express v Walsall MBC).
If the appeal is successful costs can only be awarded in favour of the successful applicant if the respondent has acted unreasonably (rule 10(1)(b) GRC Procedure Rules). Mr. Scott as a successful appellant sought a costs order against South Norfolk DC. Judge Warren stated that the challenges in a Tribunal against a state decision do not generally attract a costs penalty unlike court proceedings. This is an advantage to both the authorities and citizen. He did not consider that the authority had acted unreasonably especially taking into account that it is a relatively new jurisdiction “in which local authorities are still finding their way.” (para. 5). This was despite the authority having listed the pub notwithstanding that it had been found as a fact that there had been no community use in the recent past. However, a successful appellant can seek to recoup the reasonable costs of appeal by way of compensation (see section 11 below).
An appeal from a decision in the First-tier tribunal is to the Upper Tribunal.
11. Compensation – a major concern for local authorities operating the regime is the potential liability to pay compensation to a landowner. This liability can arise without any fault on the part of the authority and operates as a form of insurance with the authority as the insurer. It would appear from the evidence provided to the Committee that so far no payments of compensation have been made.
(a) Measure - the local authority is obliged to pay compensation if the owner incurs “loss or expense in relation to the land which would be likely not to have been incurred if the land had not been listed” (reg. 14(2)). Two types of loss are highlighted as being included in this cover by reg. 14(3). One is loss due to a delay in selling due to the operation of a moratorium – for example wasted payments such as interest or rates. The second is reasonable legal expense incurred in a successful appeal to the First-Tier Tribunal in relation to listing, a refusal to pay compensation or the amount of compensation. However, it is not just loss due to the operation of the moratorium which is covered. If the listing results in a reduction in value then that can be claimed for although until the property is sold there will be a query as to whether the loss has been incurred.
It should be noted that it is loss in relation to the listed asset. In consequence it will not cover loss in relation to adjoining land owned by the same person. In such cases the part listed exception may apply so that a disposal will not be subject to the moratorium provisions. However, notwithstanding this loss could still occur as regards the value of the part of the land not listed but a reduction in value will not be recoverable as compensation.
Nor will it cover loss that has occurred prior to listing. It is not hard to predict arguments on behalf of a local authority that a significant portion of any loss has been incurred as a result of the prospect of listing rather than the actual listing. Such an approach should not succeed as it would defeat the intention behind the compensation provisions in the regime.
Legal expenses incurred due to a failed application for listing cannot be recovered.
(b) Claim - there are stringent requirements to be satisfied when making a claim for loss or expense. The requirements are
(i) a written claim must be made;
(ii) the claim must be made within thirteen weeks of the loss or expense being incurred or finished being incurred. There is clearly plenty of scope for disputes as to the date at which the period starts to run and whether this time limit has been complied with. It is a very tight limitation period during which all the necessary evidence gathering will need to be undertaken. With a claim for a loss this will often involve valuations and obtaining such evidence within the time limit will be testing.
(iii) state the amount of compensation claimed;
(iv) be accompanied by the supporting evidence. This means that at this stage the supporting valuations should be provided.
(c) Procedure – it is for the local authority to determine the amount of compensation that it will pay. It is open to the owner of the land to request a review of the decision not to allow a claim or with regard to the amount determined. The procedure for the review is governed by Schedule 2 of the 2012 Regulations and is the same as with a review of a listing decision (reg. 16). The person requesting the compensation review may appeal the review decision to the First-tier Tribunal (reg. 17).
12. Future changes – the February 2015 Report proposes that certain changes be made to the Community Right to Bid regime. These are:-
(a) Right to buy – there will always be the risk that the right to bid could be converted to a community right to buy. In Scotland there is already a community right to buy which takes the form of a right of pre-emption. The issue was considered by the Committee but no change is proposed in the recent report.
(b) Extension of moratorium – it is proposed that the six month period of the moratorium be extended to nine months as in many cases the six month period is too short a period in which to arrange a community bid.
(c) Permitted development rights – there was a desire to remove all listed ACVs or all pubs (whether or not listed) from the scope of Permitted Development Rights regime but this was opposed strongly by the government. In consequence the proposed change was restricted to pubs that are listed as ACVs. This proposal has been quickly taken up by the government so that if the use of a listed pub is to be changed a planning application will be required and there will be a need for consultation (see section 9 above). Such a planning application will not trigger the Community Right to Bid.
(d) Material consideration – to avoid uncertainty it is proposed that the listing of an ACV should automatically be treated as a material consideration for planning purposes.
(e) Termination of moratorium – if a community bid ends during the moratorium period it is proposed that this should bring the moratorium period to an end rather than it continuing for the full six month period.
(f) Appeal – it is proposed that the nominator have a right to appeal from a refusal to list an asset which will be likely to increase the number of cases heard by the First-tier Tribunal.
(g) Going concern disposals – concern was expressed that sales of an ACV as part of a continuing business were a loop hole allowing the moratorium restriction to be avoided. It was proposed that this be removed but care will have to be taken as this change could result in substantial compensation claims.
(h) Renewed nominations – it is proposed that there be a specific ability to renew a nomination that has been rejected by the local authority if there is new and material information.
(i) Funding – local authorities are seeking to dispose of asset which are a financial burden and the voluntary section is hard pressed to fund such assets. It is proposed that more funding be made available to assist community bids.
13. Continuing issues – a number of issues remain unaddressed with regard to the operation of this regime. The British Property Federation has sought to highlight them in responses to consultations but without success so far. These include
(i) Relocating site – it has been suggested that in order to allow a development to progress there should be an ability to substitute an alternative site for the listed ACV. This relocation can happen with planning applications. However, there is no such provision with listed ACVs.
(ii) Complex sites – the regime contains no ability to mitigate the consequences of listing when dealing with a large complex or mixed use site. The Courts undoubtedly consider that applying the regime poses no problem when identifying whether the whole or a part should or should not be listed (see the Kassam Stadium case). However, that does not assist with the consequences for the whole site of such a listing.
(iii) Predominant community use – there is much to be said for the test of qualifying as an ACV being whether the asset is currently or has in the recent past been predominantly used for community purposes. The present test is much more nebulous.
(iv) Strengthening nomination process - there are no requirements as to the evidence or level of particularity that has to be provided by the nominator which can place the owner at a serious disadvantage when seeking to prevent a listing. The bias towards informality means that this has not been addressed.
(v) Distinction between services and building – there is a contradiction in the core of the regime. What is sought to be protected for the local community are the services being provided at the building but the regime focuses on the building and the ability to dispose of it rather the services. This has discussed but never addressed and so remains a flaw in the regime.
9 Stone Buildings Lincoln’s Inn
London WC2A 3NN
First Schedule – Section 88 Localism Act 2011
Section 88 Land of community value
(1) For the purposes of this Chapter but subject to regulations under subsection (3), a building or other land in a local authority's area is land of community value if in the opinion of the authority--
(a) an actual current use of the building or other land that is not an ancillary use furthers the social wellbeing or social interests of the local community, and
(b) it is realistic to think that there can continue to be non-ancillary use of the building or other land which will further (whether or not in the same way) the social wellbeing or social interests of the local community.
(2) For the purposes of this Chapter but subject to regulations under subsection (3), a building or other land in a local authority's area that is not land of community value as a result of subsection (1) is land of community value if in the opinion of the local authority--
(a) there is a time in the recent past when an actual use of the building or other land that was not an ancillary use furthered the social wellbeing or interests of the local community, and
(b) it is realistic to think that there is a time in the next five years when there could be non-ancillary use of the building or other land that would further (whether or not in the same way as before) the social wellbeing or social interests of the local community.
(3) The appropriate authority may by regulations--
(a) provide that a building or other land is not land of community value if the building or other land is specified in the regulations or is of a description specified in the regulations;
(b) provide that a building or other land in a local authority's area is not land of community value if the local authority or some other person specified in the regulations considers that the building or other land is of a description specified in the regulations.
(4) A description specified under subsection (3) may be framed by reference to such matters as the appropriate authority considers appropriate.
(5) In relation to any land, those matters include (in particular)--
(a) the owner of any estate or interest in any of the land or in other land;
(b) any occupier of any of the land or of other land;
(c) the nature of any estate or interest in any of the land or in other land;
(d) any use to which any of the land or other land has been, is being or could be put;
(e) statutory provisions, or things done under statutory provisions, that have effect (or do not have effect) in relation to--
(i) any of the land or other land, or
(ii) any of the matters within paragraphs (a) to (d);
(f) any price, or value for any purpose, of any of the land or other land.
(6) In this section--
(a) an Act, or
(b) a Measure or Act of the National Assembly for Wales;
"social interests" includes (in particular) each of the following--
(a) cultural interests;
(b) recreational interests;
(c) sporting interests;
"statutory provision" means a provision of--
(a) legislation, or
(b) an instrument made under legislation.
Second Schedule – Excluded Assets
Schedule 1 to 2012 Regulations
Land which is not of Community Value (and Therefore may not be Listed)
1 (1) Subject to sub-paragraph (5) and paragraph 2, a residence together with land connected with that residence.
(2) In this paragraph, subject to sub-paragraphs (3) and (4), land is connected with a residence if--
(a) the land, and the residence, are owned by a single owner; and
(b) every part of the land can be reached from the residence without having to cross land which is not owned by that single owner.
(3) Sub-paragraph (2)(b) is satisfied where a part of the land cannot be reached from the residence by reason only of intervening land in other ownership on which there is a road, railway, river or canal, provided that the additional requirement in sub-paragraph (4) is met.
(4) The additional requirement referred to in sub-paragraph (3) is that it is reasonable to think that sub-paragraph (2)(b) would be satisfied if the intervening land were to be removed leaving no gap.
(5) Land which falls within sub-paragraph (1) may be listed if--
(a) the residence is a building that is only partly used as a residence; and
(b) but for that residential use of the building, the land would be eligible for listing.
2 For the purposes of paragraph 1 and this paragraph--
(a) "residence" means a building used or partly used as a residence;
(b) a building is a residence if--
(i) it is normally used or partly used as a residence, but for any reason so much of it as is normally used as a residence is temporarily unoccupied;
(ii) it is let or partly let for use as a holiday dwelling;
(iii) it, or part of it, is a hotel or is otherwise principally used for letting or licensing accommodation to paying occupants; or
(iv) it is a house in multiple occupation as defined in section 77 of the Housing Act 2004; and
(c) a building or other land is not a residence if--
(i) it is land on which currently there are no residences but for which planning permission or development consent has been granted for the construction of residences;
(ii) it is a building undergoing construction where there is planning permission or development consent for the completed building to be used as a residence, but construction is not yet complete; or
(iii) it was previously used as a residence but is in future to be used for a different purpose and planning permission or development consent for a change of use to that purpose has been granted.
3 Land in respect of which a site licence is required under Part 1 of the Caravan Sites and Control of Development Act 1960, or would be so required if paragraphs 1, 4, 5 and 10 to 11A of Schedule 1 to that Act were omitted.
4 Operational land as defined in section 263 of the Town and Country Planning Act 1990.
Third Schedule – Excluded disposals
Section 95(5) of the Localism Act 2011 and the Third Schedule to the 2012 Regulations
Section 95(5) Localism Act 2011
(5) Subsection (1) does not apply in relation to a relevant disposal of land--
(a) if the disposal is by way of gift (including a gift to trustees of any trusts by way of settlement upon the trusts),
(b) if the disposal is by personal representatives of a deceased person in satisfaction of an entitlement under the will, or on the intestacy, of the deceased person,
(c) if the disposal is by personal representatives of a deceased person in order to raise money to--
(i) pay debts of the deceased person,
(ii) pay taxes,
(iii) pay costs of administering the deceased person's estate, or
(iv) pay pecuniary legacies or satisfy some other entitlement under the will, or on the intestacy, of the deceased person,
(d) if the person, or one of the persons, making the disposal is a member of the family of the person, or one of the persons, to whom the disposal is made,
(e) if the disposal is a part-listed disposal of a description specified in regulations made by the appropriate authority, and for this purpose "part-listed disposal" means a disposal of an estate in land--
(i) part of which is land included in a local authority's list of assets of community value, and
(ii) part of which is land not included in any local authority's list of assets of community value,
(f) if the disposal is of an estate in land on which a business is carried on and is at the same time, and to the same person, as a disposal of that business as a going concern,
(g) if the disposal is occasioned by a person ceasing to be, or becoming, a trustee,
(h) if the disposal is by trustees of any trusts--
(i) in satisfaction of an entitlement under the trusts, or
(ii) in exercise of a power conferred by the trusts to re-settle trust property on other trusts,
(i) if the disposal is occasioned by a person ceasing to be, or becoming, a partner in a partnership, or
(j) in cases of a description specified in regulations made by the appropriate authority.
Relevant Disposals to which Section 95(1) of the Act does not Apply
1 A disposal pursuant to an order made by a court or by a tribunal established by or under an Act.
2 (1) A disposal made pursuant to a separation agreement made between spouses or civil partners.
(2) A disposal made pursuant to an agreement--
(a) made between spouses or civil partners in connection with their separation, or between former spouses or former civil partners, and
(b) relating to the care of a child dependent on a party to the agreement.
3 (1) Any disposal made under, or for the purposes of, any statutory provision relating to incapacity.
(2) In this paragraph--
(a) "incapacity" includes any of the following (whether temporary or permanent)--
(i) physical impairment,
(ii) mental impairment, and
(iii) lack of, or impairment to, capacity to deal with financial and property matters; and
(b) "statutory provision" means any provision contained in an Act or in an instrument made under an Act.
4 (1) Subject to sub-paragraph (2), a disposal--
(a) to a particular person in pursuance of a requirement that it should be made to that person under a planning obligation entered into in accordance with section 106 of the Town and Country Planning Act 1990; or
(b) made in pursuance of the exercise of a legally enforceable--
(i) option to buy,
(ii) nomination right,
(iii) right of pre-emption, or
(iv) right of first refusal.
(2) A disposal is not within sub-paragraph (1)(a) if it is of land that was listed when the obligation was entered into; and a disposal is not within sub-paragraph (1)(b) if it is of land that was listed when the option or right was granted.
5 (1) A disposal by a transferor, "T", to a former owner, where both the conditions in paragraph (2) are satisfied.
(2) The conditions referred to in paragraph (1) are that--
(a) the land was acquired by T or by a predecessor in title of T by a purchase that was a statutory compulsory purchase ("the original purchase"); and
(b) T has made a first offer of the land to the former owner, in accordance with an obligation to offer back the land to the former owner before disposing of the land on the open market.
(3) In this paragraph--
(a) "former owner" means--
(i) the person, "P", from whom the land was acquired under the original purchase; or
(ii) a successor to P; and
(b) "successor" means the person on whom the land, had it not been acquired by T or a predecessor of T, would clearly have devolved under P's will or intestacy, and includes a person who has succeeded, otherwise than by purchase, to adjoining land from which the land was severed by the original purchase.
6 (1) Disposal in exercise of a power of sale of the land by a person who has that power by way of security for a debt.
(2) The reference in sub-paragraph (1) to a power of sale includes in particular a power implied by virtue of section 101(1)(i) of the Law of Property Act 1925.
7 A disposal pursuant to insolvency proceedings as defined by Rule 13.7 of the Insolvency Rules 1986.
8 A disposal of land to a person whose acquisition of the land is a statutory compulsory purchase.
9 A grant of a tenancy of the land pursuant to the provisions of Part 4 of the Agricultural Holdings Act 1986.
10 (1) A disposal by one body corporate to another, where the second one is a group undertaking in relation to the first.
(2) In this paragraph, "group undertaking" has the meaning given by section 1161(5) of the Companies Act 2006.
11 (1) A part-listed disposal as specified in section 95(5)(e) of the Act where, subject to sub-paragraphs (2) and (3), the following conditions are satisfied with regard to the land which is being disposed of--
(a) the land is owned by a single owner; and
(b) every part of the land can be reached from every other part without having to cross land which is not owned by that single owner.
(2) Sub-paragraph (1)(b) is satisfied where a part of the land cannot be reached from every other part of the land by reason only of intervening land in other ownership on which there is a road, railway, river or canal, provided that the additional requirement in sub-paragraph (3) is met.
(3) The additional requirement referred to in sub-paragraph (2) is that it would be reasonable to think that sub-paragraph (1)(b) would be satisfied if the intervening land were to be removed leaving no gap.
12 A disposal of a church, together with any land annexed or belonging to it, pursuant to a scheme under Part 6 of the Mission and Pastoral Measure 2011.
13 (1) A disposal by any person for the purpose of enabling health service provision to continue to be provided on the land.
(2) In this paragraph, "health service provision" means services provided as part of the health service continued under section 1(1) of the National Health Service Act 2006.
14 (1) A disposal of land to be held for the purposes of--
(a) subject to sub-paragraph (2), a school as defined in section 4 of the Education Act 1996;
(b) a 16 to 19 Academy; or
(c) an institution within the further education sector as defined in section 91(3) of the Further and Higher Education Act 1992.
(2) For the purposes of sub-paragraph (1)(a), "school" does not include an independent school other than one in respect of which Academy arrangements have been entered into by the Secretary of State under section 1 of the Academies Act 2010.
(3) For the purposes of sub-paragraph (2), "independent school" has the meaning given in section 463 of the Education Act 1996.
15 A disposal which is subject to a statutory requirement regarding the making of the disposal, where that requirement could not be observed if the requirements of section 95(1) of the Act were complied with.
  EWHC 518 (Admin)
9th Mat 2014 – CR/2013/0010
 R (oao Hourhope Limited) v Shropshire CC  EWHC 518 (Admin) at para.
 CR/2014/0005 at para. 14
 CR/2014/0015 at para. 15.
  EWHC 3543
 Para. 3 CR/2014/0007 on 2nd October 2014.