Update for landlords on assets of potential community value

Since 2011 communities have had a right to bid for property designated as having value to the community, if it comes onto the market.  That right will soon be extended to cover more types of property, at the same time becoming a right of first refusal rather than only a right to bid.  If you currently have property in your portfolio that could come within the new rules, you should consider the impact on any plans you have to sell.  You will need expert legal advice now to identify any property that may be affected and advise you on the best strategy.

‘The 2011 right to bid for assets of community value raised many hopes but few groups actually saved any assets for local use,’ according to Elizabeth Sugden, a Senior Associate Solicitor in our commercial property team. ‘This time it could be a different story, with more significant limits on landowners where communities are serious about acquiring properties for their own purposes.’

Elizabeth sets out the key changes landowners should know about.

The current position

As a reminder, the current regime for protecting assets of community value (ACVs) allows a community group to nominate land or buildings to be listed by a local authority as having value for the community.  To qualify, the current or recent past use of the land or building must further the social wellbeing or social interests of the community, and it must be realistic to think that a use serving that purpose can continue in the future. 

If the owner of a listed ACV wants to sell the property, or grant a lease for at least 25 years, they must notify the community group which has six weeks to express an interest in bidding for it.  If the community decides to bid, the landowner cannot sell or grant the lease for a period of six months, to allow the community group to get the bid organised. At the end of that period, the owner can sell or let the property to whoever they choose; there is no obligation to sell to the community, even if they have put in a sensible bid.  The current system can delay any sale or lease but cannot actually stop the owner selling on the open market.

New right to buy

The most significant change under the new rules is that once an ACV is listed, the community will have a statutory right of first refusal, not just a right to bid.  This means that the owner will have to put plans to sell or let the property to someone else on hold until it is clear that the community does not want to buy it or cannot pay market value for it.  The community will have longer to do this - twelve months instead of the current six months.

Wider definitions of community value and use

Another really key change is that more properties will potentially be eligible for listing.  As well as the existing concept of social wellbeing and social interests, the new rules extend to the economic wellbeing and interests of the community.  This reflects the public debate about the loss of shops and pubs from small communities and is likely to bring many more properties within the scope of this regime. 

At the same time, a small change to the definition of a qualifying use could have another big impact.  The current reference to uses benefitting the community in the recent past will be replaced by a simple reference to use at any time in the past.  This means that communities may be able to apply for ACV status based on a use many years ago, as long as it is realistic to think that the property could again be used for community benefit within the next five years.

Taken together, these changes will make the net much wider and give many more properties the potential to be listed.  ACVs currently remain on the register for five years but this will increase to ten years.

Community sports facilities

As well as shops and pubs, many communities fear losing their sports fields to development. These have been singled out for targeted protection under the new rules.  A qualifying sports ground is one where sports activity takes place in the open, with some sort of accommodation for spectators.  Local authorities will have a positive duty to identify any land that could fall into this category and note it on a new list of Sporting Assets of Community Value (SACV), plus any land that ‘supports’ a SACV (like an adjacent car park).  There is no 10 year time limit for an SACV, which will stay on the register indefinitely.

How might disposal strategies be affected?

If you own land or a building that is listed as an ACV or SACV, it could have a significant impact on your freedom to sell or grant a longer term lease to whoever you choose.  That could be particularly problematic if the ACV is part of a larger site you want to develop.  You may have to delay your sale or letting during the 12 month moratorium while a community group works on their bid.

Timing unclear

The new rules were included in the English Devolution and Community Empowerment Act 2026 but are not yet in force.  So far, the Government has not given an intended date for implementation.  This means that landowners will still be able to dispose of land and buildings that are not currently ACVs but could potentially be listed under the new rules; and can dispose of existing ACVs after the current six month moratorium.

Your solicitor will be able to advise you on the best strategy for your current land but possible steps to take now include:

• identifying any land that might be listed under the new rules, on the basis that it may be of economic rather than purely social benefit;
• looking more critically at potential purchases, to assess whether any land you acquire has the potential to be listed as an ACV in the future, and that might include researching both historic uses and likely community engagement in relation to a future sale; and
• building possible delays into the timetable when planning future developments, and taking into account any associated costs in your development assessment.

How we can help

Whether you need advice on what you should be doing now or to help understand your obligations once the new rules are in force, we have a team of expert commercial property lawyers ready to work with you.

For further information, please contact Elizabeth Sugden in our commercial property team on 01904 624185.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.