Michelmores Real Estate Soundbite: assets of community value

What is an ACV?

Assets of community value (ACVs) are areas of land which, in the opinion of the local authority, has a use which furthers the social wellbeing or social interests of the local community. This can include historic use or use that is realistically anticipated in the next five years.

Properties that have been listed as ACVs include pubs, parks, nature reserves, car parks and sports stadiums (Manchester United Football Club's stadium, Old Trafford, was listed in 2013).

How is an ACV listed?

Under the Localism Act 2011, ACVs must be formally listed by the local authority. Areas of land can be nominated by the community as an ACV, but the local authority has complete discretion to list areas of land as ACVs.  When listing an ACV, the local authority must notify the property owner; the owner may seek a review of the local authority's decision.

Listed ACVs will usually retain their place on the list for five years. It is important to note that listing an ACV does not create any private rights and is purely to provide a public benefit.

Buying and Selling an ACV

Community interest groups (CIGs) have a right to bid for any ACV which is proposed to be sold.

An owner of a listed ACV must notify their local authority of their intention to sell the ACV. This notification triggers a period of six weeks during which CIGs can ask to be treated as a 'potential bidder' for the ACV. If no request is made by the end of the six weeks, the owner can sell the ACV to another party.

If a request is made, a moratorium period will commence and last until the date six months after the local authority was notified about the owner's intention to sell. During the six month moratorium, the CIG can raise capital and prepare a bid to purchase the ACV; the owner cannot exchange contracts on or sell the property to anyone other than a CIG during this period. It should be noted that the owner is not obliged to accept the CIG's offer nor sell the ACV to a CIG on any terms. If, after the six month period, no acceptable bid is made by a CIG, the ACV can be sold by the owner to any other party.

ACVs in the Courts

Recently, the Court of Appeal ruled that use of land for community benefit need not necessarily mean "lawful use" when a local authority considers listing an ACV. 

In Banner Homes Ltd v St. Albans City and District Council and Another [2018] EWCA Civ 1187, the land in question was privately owned but used by the community for recreational games and activities which, in law, amounted to trespass. The Court clarified that the context must always be considered when listing an ACV. In this case the owner knew about the community use for 40 years and never previously objected before the local authority's decision to list the land as an ACV, so the fact that the use was in-fact trespass did not prevent the local authority from listing the ACV.