What is the Community Right to Bid?
The Community Right to Bid came into effect on 21st September 2012. It gives community organisations the right to identify assets they believe are of value to their community, and nominate them to be listed on the Council's Register of Assets of Community Value.
If the asset then comes up for sale, the community will be given time to make a bid to buy it on the open market. The legislation does not guarantee that the community will be able to buy the asset, it just allows them some time to prepare a bid for it on the open market.
How does it work?
Community interest groups have the right to identify a building or other land that they believe to be of importance to their community's social well being, and nominate it to be listed on the Council's Register of Assets of Community Value.
- If the nominated asset meets the definition of an asset of community value, the Local Authority must list it, notify the owner and the Land Registry. The owner will have a right to a review by the council and an appeal to an independent tribunal.
- Nothing further will happen until the owner decides to dispose of the asset, either through freehold sale or the grant of a lease for at least twenty- five years. At this point, they must notify the local authority of their intention to sell;
- The owner will only be able to dispose of the asset after a specified time period (known as a 'moratorium') has expired:
The first part of this moratorium (6 weeks) will allow community interest groups to express a written intention to bid. If none do so in this period, the owner is free to sell their asset.
If a community group confirms an intention to bid during this period, then the full six month moratorium comes into operation. This allows the group time to develop its bid. After that, the owner is free to sell to whomever they choose, and no further moratorium can be triggered for a protected period (18 months).
What is an 'Asset of Community Value'?
An asset of community value is an asset that furthers the social wellbeing or social interests of the local community (or has done in the recent past). Social interest uses can include cultural, recreational and sporting interests. These could include village pubs and shops, community centres and library buildings. A building or piece of land will be deemed to have community value only if:
- The use of the land or building currently, or in the recent past, furthers the social wellbeing or cultural, recreational or sporting interests of the local community;
- This use (as described above) of the building will continue to further the social wellbeing or interests of the local community;
Assets of community value cannot be:
- Residential properties and associated land;
- Land licensed for use as a caravan site;
- Operational land used for transport, and other infrastructures.
The Assets of Community Value Regulations 2012 provide more detail on assets that will be exempt from listing and who has the power to make this exemption. The Government has also produced a non-statutory advice note which provides additional guidance to councils about this process.
Who can nominate an asset for inclusion on the list of assets of community value?
The Council will consider community nominations where the nominating body on the community nomination form is one of the following:
- a body designated as a Neighbourhood Forum - in accordance with section 61F of the Town and Country Planning Act 1990;
- a parish council;
- an unincorporated body whose members include at least 21 individuals, and which does not distribute any surplus it makes to its members;
- a charity;
- a company limited by guarantee which does not distribute any surplus it makes to its members;
- an industrial and provident society which does not distribute any surplus it makes to its members; or
- a community interest company.
The group must not carry out their activities primarily for profit, and must partly or wholly re-invest any surplus in the Warwick District area or in a neighbouring authority area.
District Councils may not make nominations.
What is a 'local connection'?
A body other than a parish council has a local connection with land in the Council's area of jurisdiction if the body’s activities are wholly or partly concerned with the Council's area, or with a neighbouring authority’s area;
In the case of an unincorporated body, a company limited by guarantee or an industrial or provident society, they will be regarded as having a local connection if any surplus it makes is wholly or partly applied:
- for the benefit of the local authority’s area, or
- for the benefit of a neighbouring authority’s area.
In the case of an unincorporated body, it must have at least 21 local members for it to be classified as having a local connection.
Does this guarantee that the asset will be owned by the community?
The legislation in England is a Community Right to Bid, not a Community Right to Buy. It does not restrict who the owner can sell their property to, or at what price. It does not guarantee that the community will be able to take ownership of assets; it simply gives the community time to raise the funds and prepare a bid.
How does the community submit a nomination?
If a group decides to go ahead, they must complete the attached Nomination Form (Word document). If all the necessary information is not submitted then the Council may be unable to consider an application.
What happens following nomination
The council has to decide whether or not to list the asset within eight weeks following the nomination. Once we have received the completed form, we will check the technical issues such as the eligibility of the nomination and the organisation making the nomination, completeness of the information supplied, and whether or not the asset is in an excluded category.
Decisions as to whether the nominated assets are of community value will be made by the Head of Development Services in conjunction with the Development Services Portfolio Holder.
Assets that are considered to be of community value will then be added to the ‘List of Assets of Community Value’. Assets will remain on the list for five years and a land charge will be registered against the property. When the five years have expired, an eligible community organisation can submit a new nomination.
The council will take all practicable steps to notify the owner and lawful occupants that it is considering listing the property. We will also notify these people of the outcome of the nomination.
The organisation which originally nominated the asset will be notified of the outcome, together with reasons if the application is unsuccessful. They will also be notified if the asset is subsequently removed from the list, following a review of the decision.
If the nominated asset is not considered to be an asset of community value, or if the nomination was ineligible, we will provide an explanation as to why the nomination was unsuccessful to the organisation which made it. In such circumstances, the property will be added to the register of ‘Unsuccessful Nominations’ and will remain on the list for five years.
Can the owner request a review of the Council's decision?
A Property owner can ask for a review if the Council decides to list a property following a nomination. There is also a process for an appeal to an independent body. Further guidance will be provided in the letter to the property owner. Nominating Community Groups are not able to appeal the decision made in respect of their nomination.
What happens if the owner decides to sell the asset while it is on the Register?
The owner must give written notification to WDC if they intend to sell the asset (‘sale’ of the asset means either the freehold sale of the property or the granting of a long lease of at least 25 years). The Council should then notify the group who originally nominated the asset.
At this point there is an initial moratorium period. The owner is unable to sell the asset for 6 weeks (from the date the Council receives the written notification to sell), to allow time for the community to submit a written intention to bid.
This initial expression of interest must be made in writing to WDC and can be in any format but must express that the interested group 'wish to be treated as a potential bidder for the (named) asset.'
If any written intentions are received, the Council must pass on the request to the owner at which point the full moratorium period of 6 months (from the original receipt of intention to sell) comes into force. If no written intention(s) to bid are received, the owner is free to sell the asset.
During this time the owner is able to consider any bids received. WDC must pass these on to the owner as soon as possible. After 6 months, they can sell the asset on the open market, and no further window can be triggered for a protected period (18 months).
What type of groups are able to express an interest in bidding?
Only a 'community interest group' can trigger a full moratorium, unlike a nomination which can be made by a wider range of community groups. This means only the following:
- a Parish Council in whose area the asset lies
- an incorporated community group which meets these definitions:
- it has a local connection, meaning that its activities partly or wholly occur in the local planning authority area
- it is a charity, a company limited by guarantee, a Community Interest Company, an Industrial and Provident Society or a Community Benefit Society
This means there is a difference between which groups can nominate an asset and which groups can trigger a moratorium. They may be completely different groups.
Are any types of sale exempt from the process?
Some types of disposal are exempt from the moratorium process even if the asset is listed. These are set out in the Government’s Statutory Regulations on Community Right to Bid. These include:-
- disposal through the gift of an asset
- assets hosting businesses sold as a 'going concern'
- disposal within a family or trustees of a trust
- execution of a Will
- parts of larger estates
- others including NHS, Church of England etc. as detailed in the Act
Compensation for Property Owners
Property owners who believe they have incurred losses or costs as a result of complying with these procedures can apply for compensation from the District Council.
Assets of Community Value Register
Download the register: Asset of Community Value register. Alternatively, a hard copy of the register is available to view from Reception at Riverside House, Milverton Hill, Leamington Spa, CV32 5HZ.
- Community Right to Bid Application Form (Word doc)
- Disposal Procedure Diagram (Word doc)
- Listing Procedure Diagram (Word doc)
Guidance and Nominations
Guidance for nominees is contained on the rear of the nomination form of the Warwick District Council Community Right to Bid form. Nominations must be in writing using the Warwick District Council Community Right to Bid Nomination Form. Completed nominations forms should be returned to:
Community Right to Bid
Warwick District Council
To submit a completed Nomination Form electronically please email to: firstname.lastname@example.org
- Chapter 3 of the Localism Act 2011 and Assets of Community Value (England) Regulations 2012 provide the legislative arrangements.
- More information about the Community Right to Bid is available on the Government’s Community Rights website.
- Further information on the guidance to local authorities is contained here: Community Right to Bid: Non Statutory Advice note for local authorities