Last edited 19 Jan 2021

Community right to bid

The Localism Act brought in a range of new rights for communities and neighbourhood groups. Part 5 Chapter 3 of the Localism Act, along with Assets of Community Value Regulations introduced the Community Right to Bid. The right came into force in September 2012.

The Community Right to Bid gives communities the opportunity to bid to buy community assets. This includes private as well as public assets. The right enables community groups to nominate assets that they believe are of particular value to their local area to be listed by the local authority as an asset of community value.

The local authority can permit the listing if the asset’s principal use has furthered the community’s social well-being or social interests, and is likely to do so in the future. Social interests can include cultural, sporting or recreational interests. The Department for Communities and Local Government (CLG) suggest that such assets can be buildings or other facilities, and might include; a village shop, a pub, a community centre, a children's centre, allotments, a library and so on. There are a number of excluded categories, set out in Schedule 1 to the Regulations, and this includes residential property.

The local authority has 8 weeks to decide whether the asset meets the definition set out in Section 88 of the Localism Act. If the owner of the asset objects to the listing, they have the right to request that the local authority reviews the decision, and if they are still not satisfied, they can request an independent tribunal.

If the owner of a listed asset decides to sell it, they must notify the local authority, and can then not proceed for 6 weeks, allowing community groups to request that they are treated as a potential bidder. If no groups make such a request, the owner can sell the asset.

If a valid request is received, the owner may not sell the property for 6 months from the date they gave the notification to the local authority, unless they sell it to the community group. They are then free to sell the asset to anyone they choose. It should be noted that this is not the same as giving the community group the first right of refusal, it simply allows the owner to sell to the community group if they choose to.

There are then no restrictions on any further sale of the asset for 18 months from the date of notification.

Sales that do not comply with the requirements are rendered void.

A compensation scheme is available for private property owners that may suffer financially as a result of the right to bid. The scheme is administered by the local authority.

NB: In March 2016, Community Pubs Minister Marcus Jones announced a new support and finance programme to help people take control of their local pub for the benefit of the community. (Ref. New £3.6 million programme to help communities take control of their local pub, March 2016.)

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