Assets of Community Value

The Localism Act 2011 is intended to counter the perceived damage that can be done to communities and community services when buildings or other amenities are closed or sold. It sees the introduction of a right for groups to bid and potentially buy local land that is considered to have community value which is referred to as an asset of community value (ACV).

The Act does not:

  • Give anyone a right of first refusal or option to purchase an ACV; or
  • Restrict to whom an owner of an ACV can sell except during the Moratorium Period when it can only be sold to a qualifying community body; or
  • Restrict at what price an ACV can be sold.

The owner does not therefore have to sell a pub to a community group even if their offer exceeds the highest alternative bid.

A Local Authority can only include land in its ACV list in response to a specified community group nomination. The ACV listing must cover the pub and any other buildings, whether in use or not, and ancillary land such as car park, pub garden, playground, boules pitch. Land which is incidental – say an enclosed field that was once an orchard or grazing land not currently used by the publican or patrons – and therefore not in an actual use directly related to the pub – may be excluded. It is usual, however, for all the land covered by the Land Registry title to be included in the listing.

The local authority is required to notify the owner of the nomination and its outcome. The owner has no statutory right of consultation or a right of reply and consequently ACV listings can be determined very quickly if circumstances require it – such as an advertisement for sale.

There are two points at which the owner can object to the listing. Within 28 days of listing they may request a Review; and if the listing is upheld at Review, by appeal to the Courts. From experience if the community group and Local Authority really want to support the proposal it is difficult to stop.

The owner cannot sell a pub with an ACV unless certain conditions are met. For the purposes of the legislation the disposal of an ACV is restricted to a freehold with vacant possession or a lease which, when granted, was for 25 years or more.

The restrictions on relevant disposal of ACVs do not apply to the sale of transfer of a going concern which is the sale of a business occupying the listed premises and can also be the sale of a business subject to a tenancy, where the business is carried on.

If the owner wants to dispose of an ACV (i.e., of a lease which when granted was for 25 years or more; to grant a new lease of 25 years or more; or a freehold with vacant possession) it must notify the local authority who in turn advises the nominating community group. Any qualifying community interest group has 6 weeks – the ‘Interim Moratorium – to advise the Local Authority in writing of their request to be treated as a potential bidder. If no notification is made the owner may proceed with the sale, subject to the 18 month Protected Period – see below.

If a qualifying community group expresses interest it has 6 months from the date of receipt by the local authority of the Notice of Intention to Dispose submitted by the owner (i.e., 4 and a half months from the end of the Interim Moratorium) to prepare a full business plan and raise finance to purchase the pub. Any fees incurred are at their own cost and cannot be recovered from the owner.

The key point to bear in mind is that the owner is not bound to deal with the community group. The owner just cannot exchange contracts with any other party during this time.

If at the end of the 6 week Interim Moratorium a qualifying community group has not expressed a desire to be treated as a bidder, the owner can sell to whomever they wish until the end of the Protected Period which is 18 months from the date the Notice of Intention to Dispose is received by the local authority. If a qualifying community group makes a request to be treated as a bidder during the Interim Moratorium but then makes no actual bid during the Full Moratorium period, the owner is then free during the following year (from the end of the Full Moratorium to the end of the 18 month Protected Period) to sell to whomever they wish.

Compulsory Purchase Orders (CPO):

In 2015 Government addressed the issue of the intransigent owner who refuses to sell, reopen or let the site for its proper purpose. The Ministry has bolstered, under the CPO provisions of the Crichel Down Rules 2015, the statutory powers for local authorities to acquire specifically ACVs ‘where there is a compelling public interest’. This power is given effect in the Planning Act 1990 general CPO provisions at S226. Another CPO power is in the Listed Buildings Act 1990 (S48) which applies chiefly to listed buildings and important buildings in Conservation Areas which have been deliberately damaged or allowed to deteriorate. Professional advice should be sought.

Permitted Development:

From 23rd May 2017 ALL proposals for the loss of a pub to demolition or a non-pub use must have full planning permission. The only Permitted Development for a pub (Class A4) is for mixed use as a pub/restaurant (A4/A3, now in its own Class AA) and from Class AA back to A4.


With updated text kindly provided by Dale Ingram of Planning For Pubs Ltd., historic buildings & planning consultants, pubs & brewing specialists.