There has been outrage in the press recently (see The Times, 14 Dec 2018) when a village pub was listed as an asset of community value (ACV). What does that mean? And what effect does it have on a property?

An ACV is a property which is listed as such on a register held by the local authority for the area in which it is situated. The listing of a property as an ACV places restrictions on the owner of the property’s freedom to sell it when the community is given the opportunity to raise capital and bid for the property before it is sold on the open market.

There is no obligation on the owner to sell the asset to a community group, but a moratorium period of up to six months is imposed on the sale during which only community bids can be accepted. This is emphatically not a right of refusal; if owners aren’t happy with the community bid, they have every right to reject it.

Many different types of property may be ACVs including playing fields/pitches/pubs/halls etc. The criterion is that:

  • the property must have been used for the purposes of furthering the social wellbeing or interest of the community in the recent past and would be used for the same purpose within the next five years.

When an application is made to add a property to the ACV register, there is no formal procedure for the landowner to make representations to the local authority as to why it should not be listed. And worse, no obligation on the local authority to take into account any representations which the landowner may make at that stage.

If the application to list the property as an ACV is unsuccessful, the property is added to the local authority’s ‘unsuccessful list’ of ACV nominations.

If the property is listed as an ACV, the listing is registered as a restriction against the property by HM Land Registry.

Challenging a listing

A property owner’s rights of ‘objection’ only arise after the property has been added to the register. The owner may request a review of the listing.

A request for review must be made within eight weeks of the property being listed. The decision must be reviewed by an office of a local authority which had nothing to do with the original decision. Copies of the documents that are being considered as part of the review must be sent to the property owner or the property owner’s representative. The local authority may have a hearing to take into account the property owner’s views but the review must be completed within eight weeks of the property owner’s request being made.

The property owner must be provided with a copy of the decision and the reasons for it. Whichever way the decision goes, the property owner and the local authority pay their own costs incurred in the review.

If the review decides that the listing of the property as an ACV was correct, then the property owner may appeal to the First Tier Tribunal (General Regulatory Chamber). This appeal must be made within 28 days of the local authority conveying the review decision to the property owner and should be sent to the tribunal clerk in writing, by post or email.

Compensation and costs

The property owner may apply to the local authority for compensation when listing of an ACV causes delay to a sale because of the moratorium period imposed. The property owner is also entitled to recover reasonable legal costs if successful in challenging the listing of the property as an ACV on an appeal to the First Tier Tribunal.

A claim for compensation must be made in writing to the local authority within 13 weeks of the loss or expense being incurred.