Assets of Community Value

In an article which appeared on our website recently (Planning to Change Use) my colleague, Philip Shotter, advised on the pitfalls of changing use from a public house to a restaurant, one of which is the difficulty which is caused if the pub is listed as an Asset of Community Value (“ACV”).  What I want to focus on in this article is what the owner of a potential ACV can do if their asset is nominated to be listed as an ACV or is so listed.

It is important to remember that, whilst most of the media coverage about ACVs has related to pubs, the definition is potentially much wider. Essentially, land can be listed as a ACV if:-

• The primary current use of the land furthers the social well-being or social interests of the local community AND it is realistic to think that the land can continue to be used in a way that will further the social well-being or social interests of the local community OR

• The land has previously been used for the purposes of furthering the social well-being or interests of the local community in the “recent past” AND it is realistic to think that it will be used for the same purpose again within the next five years.

Consequently, whilst most of the case law relating to ACV’s has concerned pubs, there have been exceptions, for example cases about properties used by clubs (for example golf clubs – Haddon Property Development v Cheshire East Council) and even about an open field – (BHL v St Albans City Council).

Local Authorities cannot list land as an ACV of their own initiative, it must be nominated by a community body or a community interest group. For example Philip alluded in his article to the blanket nominations of pubs by local branches of the Campaign for Real Ale (CAMRA). Normally, a landowner will have three opportunities to oppose the nomination of their property as an ACV on the Local Authority’s list, or at least to get it removed from that list.

1 Opposing the Nomination

Whilst there is no statutory mechanism for a landowner to make representations prior to listing nor any obligation on the Local Authority to take account of any representations they may receive, Local Authorities do have to notify landowners of nominations and most, if not all, seem to invite representations, which of course we strongly recommend landowners to make if invited.

2 Review of the Listing

If the Local Authority decides to list the land as an ACV, the landowner then has eight weeks to challenge the listing. This is initially dealt with by a senior case worker at the Local Authority different from the one who made the decision to list. The landowner can make representations and request an oral hearing.

3 Appealing against the Listing

If the Local Authority still declines to take the property off the ACV list, the landowner then has a right of appeal to the First Tier Tribunal, essentially a court which specialises in dealing with certain types of property disputes.

Because the relevant legislation has only been in place for a few years, case law is quite limited. The focus in the cases has tended to be on whether the land really does further the social well-being or social interests of the local community and whether it is realistic to think the land will continue to do so.

In the context of pubs, in a case called Kicking Horse v Camden LBC, the Court was concerned to ascertain whether the pub was “a place for local residents to meet and socialise”. The mere fact there are other nearby public houses would not of itself prevent the listing, but the pub in question would need to have a substantial group of local regulars.

As mentioned above, the Haddon Property Development case concerned a golf club. In that case, it was accepted by the Court that the link between the club and the local community had been sufficiently strong (although the position could well have been different if the club had been more exclusive). However, the club had closed and the temporary planning permission for the clubhouse had expired and the Judge ruled that the club should not be listed because, on the evidence, he did not think it was realistic that the club would resume operations in the next five years.

The same result was reached for rather different reasons in another case, STO Capital v Haringey. This case concerned a former pub. Before the appeal hearing, a planning permission for residential development had been granted by a planning inspector. With the benefit of the permission, the pub would be marketed at a price reflecting residential use, not the lower price which would apply in the case of pub use. On that basis, it was not realistic to think that the pub would re-open in the next five years.

Other cases have been fought on the basis that pub use going forward was simply not economically viable. What I think is clear from the cases mentioned above is that disputes in relation to ACVs with Local Authorities are highly fact-sensitive so it is crucial for the land owners and their legal advisors to marshal all of the available evidence in an extremely organised manner. I think it is also clear that, in the right circumstances, ACV listings are often overturned, so landowners should not give up.

We are able to assist landowners in gathering and presenting the necessary evidence, either to the Local Authority or to the Court, at all the three stages of the process which I have mentioned above.

Once land is listed, the listing remains in place for five years. Listing does not place any restriction on what the owner can do with their property so long as it remains within their ownership. However, the legislation is designed to ensure that community groups get an opportunity to bid before the owner can sell on the open market. The owner is not obliged to sell to the community group but can only exchange to sell to another party after a moratorium which can be up to six months. Inevitably this is likely to have a negative effect on the value of the property as potential buyers are likely to lose interest once the land is listed.

The legislation does provide for owners to be compensated if they suffer loss and expense which they would not have incurred if their land had not been listed as an ACV. However, this is not so far an area where landowners have had success before the First Tier Tribunal, so it is not clear yet in what circumstances compensation will be awarded. However, the possibility of compensation is certainly worth raising, both when a nomination is being opposed and when a listing is being challenged.

Please note that this information is provided for general knowledge only and therefore specific advice should be sought for individual cases.

For further information, please contact Philip Shotter or Edward Vaughan