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Assets of Community Value – The Implications for Developers

April 27th, 2016

Trainee Solicitor, Giulia Sinibaldi, explains Assets of Community Value and the impact on developers.

The ability to register a property, e.g. a building, as an Asset of Community Value (AoCV) is a relatively recent development introduced by the Localism Act 2011 and supplemented by The Assets of Community Value (England) Regulations 2012.

An AoCV is defined as a piece of land or property with community importance that is protected from development. More specifically the Act states that an AoCV is:

 ‘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.’

Residential premises are exempt from the provisions under legislation and therefore cannot be listed as AoCV

Why list a site as an AoCV?

The legislation was intended to protect and preserve community assets so that they were ring-fenced for the benefit of the local community. The Government’s aim is ‘to give many more communities the opportunity to take control of assets and facilities in their neighbourhoods by levelling the playing field’.

How to Register an AoCV

Any group of at least 21 members with an interest in the land/building may apply to the relevant Local Authority to list a building as an AoCV. If the nomination is legitimate and persuasive, the Council will list the site as an AoCV.

Rights Granted

Once a group has successfully nominated an asset, a land owner is unable to sell the asset without first offering the group the right to bid for the asset. The group does not have the right to buy the asset, simply to bid for it and there is no obligation for an owner to sell the asset once it has been listed as an AoCV. The group then have six months to bid to buy the asset. In reality, groups may be unable to raise the funds to buy a nominated asset which means that after six months, the asset can be sold on the open market.

So what does this mean for developers?

Once a group is successful in registering an AoCV, the Council will inform the owner of the asset, list the asset in the Land Charges Register at the relevant Local Authority and apply for a restriction to be placed on the register of title of the asset at the Land Registry (if it is registered land).

There is nothing that a land owner can do at this stage to prevent the registration against the title of their land. This could have serious implications for a developer seeking planning permission to develop a site. There is a risk that any re-development of land and buildings listed as AoCV may be rejected by the Local Authority at the planning stage.

What can you do if your site is listed as an AoCV?

There are three main options for dealing with a site listed as an AoCV.

  1. A site may only be listed as an AoCV for 5 years so a developer may wish to wait until the nomination falls away. However this is not always commercially practicable.
  2. If it is unlikely the nominated group would have funds or would be able to secure funds to purchase the property, a developer may offer the land to the group and wait for the 6 month deadline to expire after which the land may be sold on the open market.
  3. An alternative would be to appeal the decision and make an application for an Asset of Community Value Review Hearing. This hearing is presided over by the Council who will hear submissions from all parties and come to a decision as to whether the site should be listed as an AoCV. If the appeal is successful, the nomination can be taken off the title and a developer is free, subject to planning consent, to develop the site, as originally intended.

Developers need to be aware of AoCV and be geared up to respond to any nomination affecting their land as this could impede development and may make the land difficult to sell on.

If you are concerned about your development site being listed as an AoCV or indeed your site has been listed, please, do not hesitate to contact us on 01494 773377 or so that we may advise you on the best course of action to protect your investment and the future development value of your site.



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