A recent transaction on which we acted reminded us of the possibility of property being listed as an asset of community value (ACV), but what do ACVs actually entail?
What is an ACV?
An ACV is land which a local authority considers to have community value on the basis that either:
- the current use furthers the social wellbeing or social interests of the local community and it is likely to be used in a similar way; or
- in the next five years the property will be used to further the social well-being or interests of the local community.
Community groups of at least 21 local people who appear on the electoral roll within the local authority or a neighbouring local authority can nominate property to become an ACV.
A local authority considering whether to include land on its ACV register must take all practical steps to inform the land owner that it is considering listing the land as an ACV.
The ultimate recourse for the owner of an ACV is to appeal against the listing – this must be within 8 weeks of the date that written notice of the listing was given. The owner will then be entitled to make representations at the appeal stage.
Once nominated as an ACV, it will be protected by being listed as a local land charge and will appear as a restriction on the title of the property.
What if the ACV owner wants to sell?
When an owner of an ACV wishes to sell, the community is afforded a period of time to make a bid and raise capital to buy the ACV. The seller may not sell the ACV on the open market until this period has expired, or the transaction will be void.
Any interested community group must make a bid within six weeks of notification of the owner’s intention to sell the ACV. If a bid is made during this window there is a further six month period to allow the successful community group to raise the capital for the purchase. During this period the owner can only dispose of the ACV to the successful bidder. If no bid is made in the initial six weeks, or the successful bidder is not able to raise sufficient capital, the owner is free to sell the ACV on the open market for a period of 18 months (less the initial six week period). However, at the end of the six month period the owner is free to dispose of the ACV to whoever the owner chooses.
Remember, if you are an owner of an ACV, compensation can be claimed from the local authority as a result of incurring loss or expense from the property being listed as an ACV.
For further information regarding this topic or any other property and construction matter, please contact Ian Gilmour – Partner, or Natalie Cameron – Associate, or any member of Edwin Coe property team.
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