Developers are well aware of the risk of a town or village green application and the delay it can cause to a potential development. The new threat of delay is a bid for an asset of community value (ACV).

It is important for landowners and developers to identify whether any land that they propose to sell, buy or develop might be subject to an application for listing as an ACV, as it may delay or frustrate their proposals.

This is a brand new piece of law which stems from the Localism Act 2011. The Act includes provisions requiring a local authority to maintain a list of buildings and other land in its area - whether privately or publicly owned - which are of community value.

The purpose is to ensure that when the land is to be sold, a local community interest group will have the opportunity to delay the sale by six months to enable it to prepare a bid to buy it. Examples of assets would be community centres, libraries, village or estate shops and pubs.

Regulations were required to fill in the detail and they were made in relation to England on 20 September 2012, coming into effect on the day after. These are some key aspects.

Listing

Local authorities do not have to identify the community assets - it is for community groups to nominate them for putting on to the list. Certain types of land are not eligible for listing, including residential property but this does not apply, for example to a pub that includes residential accommodation.

The local authority will list the asset if it considers that it furthers the social well-being or social interests of the community or has done so in the recent past. If the landowner does not agree that its property should have been listed, it can appeal.

The inclusion of an ACV in the list is a local land charge and where the ACV is registered at the Land Registry the local authority must enter a restriction on the register.

The ACV will remain on the list for up to five years. If it still meets the definition after five years, it can be re-nominated and re-listed.

Sale

If the owner of the ACV wants to make a 'relevant disposal' which includes a sale, it must notify the local authority, which in turn must notify the community group that listed the ACV.

The community interest group will then have an interim moratorium of six weeks to lodge a non-binding expression of interest, in which case a moratorium of a further four and a half months - making a total of six months - will come into effect.

The purpose of this window is to enable the community interest group to prepare a bid for the ACV and arrange its finance - but there is no obligation on the owner to accept the bid.

During the moratorium the owner may not exchange contracts, except with the community interest group. After it, the owner will be free to sell to whoever it wishes at the price they agree - and for a protected period of 12 months will not again be subject to delay.

Some sales of ACVs will not trigger notification to the community group and they include a sale pursuant to an option or pre-emption entered into before the asset was listed as an ACV. The list of exemptions also includes a sale by a lender in exercise of its power of sale under its charge.

The Regulations provide that a non-compliant sale will be ineffective.

Compensation scheme

There is a compensation scheme for private property owners to claim for costs or loss incurred as a result of complying with the procedure, although the timescale for making the claim is short. The amount will be determined and paid for by the local authority.

Implications

These regulations provide an important right for communities to come together to save, for example, the village shop or community hall. However, there is concern that the regulations will be used as another weapon in the armoury of campaigners to thwart the delivery of an unpopular development.

If a property includes an ACV, there could be timing issues on site assembly. Developers may do deals with community groups - for example build a new community hall in a different position - to enable development to go ahead