How does the Community Right to Bid work?

Local voluntary and community bodies can nominate an asset (a building or land) to be included on the List of Assets of Community Value, which is maintained by the London Borough of Bexley. If the nominated asset meets the required criteria, it will be added to the list.

Then, when the owner of a listed asset wishes to dispose of the property, they must inform the Council. Some types of disposals are exempt from the scheme and the owner will be able to proceed with their disposal as planned. However, if the disposal is not exempt, the Council will notify the community that the owner proposes to sell the property, and a 6-week window of opportunity (called the 'interim moratorium period') will be triggered in which the owner cannot sell the asset.

If during these 6 weeks, an eligible local community interest group informs the Council that they would like to be treated as a potential bidder for the asset, a longer moratorium period (up to 6 months) will be triggered. During this time, the owner can not sell the asset, and eligible community organisations can use this period to prepare their bids to purchase the property.

However, the owner of the listed asset does not have to accept the community group’s offer, and when the moratorium period ends, the owner can sell the property to anyone of their choosing.

The following Q&A will provide greater detail on each step in the process.

What is the point of Community Right to Bid?

The Government explains that every town, village or neighbourhood is home to buildings or amenities that play a vital role in local life. They might include community centres, libraries, swimming pools, village shops, markets or pubs. Local life would not be the same without them, and if they are closed or sold into private use, it can be a real loss to the community.

Over the past decade, communities have been losing local amenities and buildings of great importance to them – the village or housing estate shop or pub or community centre or village hall. The Government cites that on average, nearly 300 pubs and 400 village shops have closed each year.

In many places across the country, when local amenities have been threatened with sale or closure, community groups have taken them over. In some cases, however, community groups who have attempted to take assets over have faced significant challenges. They often need more time to organise a bid and raise money than the private enterprises bidding against them.

The Community Right to Bid provision in the Localism Act 2011 was introduced particularly for this reason; to give a fair chance to local communities to prepare their bids to keep 'assets of community value' in public use and part of local life.

What kinds of assets can (and can not) be nominated for inclusion on the List of Assets of Community Value?

A range of both public and private assets can be nominated, whether the asset is owned by a private company, an individual, the London Borough of Bexley, or another public body. Assets can be buildings or land. Assets to nominate might include an isolated village shop, a community centre, a children's centre, an allotment, a library, a swimming pool, a museum, or another asset that the community believes to have community value, as long as each asset meets all of the criteria for 'asset of community value' as set out in the Localism Act 2011. However, as legislated in the Localism Act 2011, there are three types of assets that cannot be nominated for inclusion on the List of Assets of Community Value.

You can find the exact details of these exclusions in the Localism Act 2011 and Regulations but as a summary, these are:

• residential properties – except where an asset which could otherwise be listed contains integral residential quarters, such as accommodation as part of a pub
• land licensed for use as a residential caravan site (and some types of residential caravan site which do not need a license)
• operational land of statutory undertakers as defined in s263 of the Town and Country Planning Act 1990, for example, railways, roads, canals, airports, docks, etc

What kinds of community groups can nominate an asset for the list?

Only voluntary and community bodies, in addition to parish councils in England, will have the right to nominate properties to be included on the List of Assets of Community Value.

'Voluntary and community bodies' bodies are defined as being one of the following:

• unincorporated groups with a membership of at least 21 local people who appear on the electoral roll within the local authority or a neighbouring local authority
• neighbourhood forums as defined in section 61F of the Town and Country Planning Act 1990
• community interest groups with a local connection and one or more of the following structures:
  • a charity
  • a community interest company
  • 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

A local connection means that the body’s activities are wholly or partly concerned with the local authority’s area or with a neighbouring authority’s area and that any surplus it makes is wholly or partly applied for the benefit of the local authority’s area or a neighbouring authority’s area.

Please be aware that the London Borough of Bexley will validate the eligibility of your organisation as part of the assessment process.

How can my group nominate an asset for the list?

If you represent one of the groups described in the above answer, your group may be eligible to make a nomination. To do this, you can complete the online nomination form. This is the quickest way to make a nomination.

However, if you would prefer to fill out a printed copy or alternative version of the form, please contact Property Services.

How does the Council decide which nominations to accept and which to reject?

There is a list of criteria that the nominated asset must meet in order to be accepted for inclusion onto the List of Assets of Community Value. This criteria is laid out in the Localism Act 2011 and associated Regulations, and every local authority in England must use this criteria when judging nominations.

The criteria state that the nominated asset must:

• be located within the local authority’s area
• not be excluded from listing
• meet the definition of “land of community value” set out in the Localism Act 2011, that is:

Either

• an actual current use of the  building  or  other  land  that  is  not  an  ancillary use furthers the social wellbeing or social interests of the local community, and
• it is realistic to think that there can continue to be non-ancillary use of the building or other land which will further (whether or not in  the same  way)  the social wellbeing or social interests of the local community

Or

• there is a time in the recent past when an actual use of the building or other land that was not an ancillary use furthered the social wellbeing or interests of the local community, and
• it is realistic to think that there is a time in the next five years when there could be non-ancillary use of the building or other land that would further (whether or not in the same way as before) the social wellbeing or social interests of the local community

In addition, the nomination must come from a community organisation that is eligible to make a nomination.

If all of the criteria are met, the Council will add the asset to the List of Assets of Community Value. The Council will make the decision to accept or reject a nomination within 8 weeks. If the nomination is rejected the property will be added to the List of Unsuccessful Nominations.

What does 'recent past' mean?

For the purposes of the Community Right to Bid scheme, the London Borough of Bexley is of the view that 'recent past' should generally be defined as 'within the past 3 years', although other time periods will be considered where appropriate.

What happens if an owner puts a property up for sale while the Council is evaluating my group’s nomination of that property?

Community nominations can be made at any time, but it is only once an asset is listed that an owner’s sale can be affected or delayed. If your group submits a nomination form for a local asset to be included on the List of Assets of Community Value, the Council must evaluate your nomination within 8 weeks. If the owner of the asset decides to put their asset up for sale before the Council reaches a decision on your nomination, they can continue with their disposal until the point is reached when the asset becomes listed. Once an asset is listed and the owner wishes to continue with a disposal, the owner must inform the local authority and the process will commence as outlined elsewhere.

What happens if my group’s nomination of an asset is unsuccessful?

When the London Borough of Bexley receives your nomination form, it will evaluate it according to the criteria set out in the Localism Act 2011. As soon as a decision is reached the Council will contact in writing both your group and the owner of the asset, to let you know whether or not the nomination was successful. If it was unsuccessful the Council will provide you with the written reasons why it was unsuccessful. The asset will then be added to the List of Unsuccessful Nominations.

Your group, or another group, can try to nominate the asset again in the future. However please pay close attention to the reasons why the nomination was unsuccessful, for if these conditions have not changed significantly since your original nomination, there will be very little chance that the nomination would be accepted second time around.

How will my group know when the owner of a listed asset is planning to sell the asset?

When an owner of a listed asset intends to sell his or her property, under the Localism Act 2011 they must inform the Council, unless their disposal falls under one of the exemptions (see next question).

As soon as the Council receives this notice from the owner, it will update the List of Assets of Community Value on the website to include this information. A notice will also be published in the local library in the asset’s area and in the local press. If you would like, you can also register to receive an automatic email alert from the Council whenever the owner of a listed asset announces their intention to sell the asset.

Lastly, if your group nominated the asset in the first place, you will receive a letter from the Council, informing you that the owner intends to sell the asset, and providing you with details and timescales of what your group can do next. This letter will be sent to the contact details you included in your nomination form.

When the Council notifies the community and the nominating organisation, this signals the beginning of the 6-week interim moratorium period in which the owner cannot sell the property, and in which community interest groups must express their interest to the Council in being treated as a potential bidder for that property.

Which types of disposals are exempt from the moratorium periods?

Usually, when the owner of a listed property wishes to sell the property, they must notify the Council of their intention, and as described above, the Council then triggers a 6-week moratorium period and provides the community with this information.

However, in some cases (24 specific situations listed in the legislation), this process does not apply. In these cases the owner may proceed with their disposal without telling the Council, the community is not notified of the owner’s intention to sell, and no moratorium periods are triggered.

For full details of these exemptions, please see Section 95(5) of the Localism Act and Schedule 3 of the Regulations.

What should a community group do when it finds out that the 6-week moratorium period has been triggered?

If you are an eligible community interest group that would like to potentially make a bid for the asset (see next question), the following steps must occur:

• your group must fill in and submit the Request to be Treated as a Potential Bidder form. You must submit this form before the end of the Interim Moratorium Period, which is the 6-week period during which the owner cannot sell the asset. For the end date of the moratorium period, please view the List of Assets of Community Value
• if the Council receives this form before the end of the Interim Moratorium Period, the owner will be informed that a Full Moratorium Period has been triggered and the List will be updated with the end date of this period (which is 6 months from the date the owner initially announced their intention to sell the asset)
• during the Full Moratorium Period, the Owner is not permitted to sell the asset, and community groups should use the time to raise money, create a business plan, prepare their bids, etc
• at the end of the Full Moratorium Period, the owner may sell the asset to whomever he or she wishes and is under no obligation to accept your group’s offer
• there is a Protected Period which means that if the owner does not sell their asset at the end of the Interim or Full Moratorium Period, there will be the remainder of the Protected Period in which they are permitted to sell their asset without triggering any other delays

What types of community groups can request to be treated as a potential bidder?

Only Community Interest Groups are eligible to request to be treated as a potential bidder during the Interim Moratorium Period, which would then trigger the Full Moratorium.

These groups must have a local connection, and they must have one of the following structures:

• a charity
• a community interest company
• 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

A local connection means that the body’s activities are wholly or partly concerned with the local authority’s area or with a neighbouring authority’s area and that any surplus it makes is wholly or partly applied for the benefit of the local authority’s area or a neighbouring authority’s area.

Please be aware that the London Borough of Bexley will validate the eligibility of your organisation as part of the assessment process.

What if my organisation says we are going to bid for an asset, but then decides not to?

If you inform the Council that your organisation wishes to be considered as a potential bidder during the Interim Moratorium Period (which triggers the Full Moratorium Period), you are not under a legal obligation to make a bid during or after the Full Moratorium Period. Expressing an interest to bid does not mean that you must subsequently make a bid for the asset.

What if other groups or bidders make a higher bid than my organisation?

The owner of the asset is free to dispose of their asset to anyone of their choosing. They can sell the asset at any price agreed to between them and the buyer. The owner has no obligation or responsibility to accept your organisation’s offer, no matter what amount you bid.

Is funding or support available to help a community group submit a nomination or a bid?

Yes, groups will be able to access funding in the form of pre-feasibility grants and feasibility grants. The My Community Rights – Grants website has a number of helpful tools to assist your group in accessing this funding, but also in preparing a bid, buying and running local assets, and much more.
 

Are other Councils besides Bexley participating in the Community Right to Bid?

Yes. All of the following local authorities in England must also administer the Community Right to Bid since it is a provision of the Localism Act 2011 which is a piece of national legislation:

• London borough councils
• the Common Council of the City of London
• district councils
• county councils for areas in England for which there are no district councils
• the Council of the Isles of Scilly

Are there any other 'Community Rights' in the Localism Act I might want to know about?

Yes, there is a Community Right to Challenge, a Community Right to Build, and Neighbourhood Planning.

How does the Community Right to Bid work?

Local voluntary and community bodies can nominate an asset (a building or land) to be included on the List of Assets of Community Value, which is maintained by the London Borough of Bexley. If the nominated asset meets the required criteria, it will be added to the list.

Then, when the owner of a listed asset wishes to dispose of the property, they must inform the Council. Some types of disposals are exempt from the scheme and the owner will be able to proceed with their disposal as planned. However, if the disposal is not exempt, the Council will notify the community that the owner proposes to sell the property, and a 6-week window of opportunity (called the “interim moratorium period”) will be triggered in which the owner cannot sell the asset.

If during these 6 weeks, an eligible local community interest group informs the Council that they would like to be treated as a potential bidder for the asset, a longer moratorium period (up to 6 months) will be triggered. During this time, the owner can not sell the asset, and eligible community organisations can use this period to prepare their bids to purchase the property.

However, the owner of the listed asset does not have to accept the community group’s offer, and when the moratorium period ends, the owner can sell the property to anyone of their choosing.

The following Q&A will provide greater detail on each step in the process.

What is the point of Community Right to Bid?

The Government explains that every town, village or neighbourhood is home to buildings or amenities that play a vital role in local life. They might include community centres, libraries, swimming pools, village shops, markets or pubs. Local life would not be the same without them, and if they are closed or sold into private use, it can be a real loss to the community.

Over the past decade, communities have been losing local amenities and buildings of great importance to them – the village or housing estate shop or pub or community centre or village hall. The Government cites that on average, nearly 300 pubs and 400 village shops have closed each year.

In many places across the country, when local amenities have been threatened with sale or closure, community groups have taken them over. In some cases, however, community groups who have attempted to take assets over have faced significant challenges. They often need more time to organise a bid and raise money than the private enterprises bidding against them.

The Community Right to Bid provision in the Localism Act 2011 was introduced particularly for this reason; to give a fair chance to local communities to prepare their bids to keep 'assets of community value' in public use and part of local life.

What kinds of assets can (and can not) be nominated for inclusion on the List of Assets of Community Value?

A range of both public and private assets can be nominated, whether the asset is owned by a private company, an individual, the London Borough of Bexley, or another public body. Assets can be buildings or land. Assets to nominate might include an isolated village shop, a community centre, a children's centre, an allotment, a library, a swimming pool, a museum, or another asset that the community believes to have community value, as long as each asset meets all of the criteria for 'asset of community value' as set out in the Localism Act 2011. However, as legislated in the Localism Act 2011, there are three types of assets that cannot be nominated for inclusion on the List of Assets of Community Value.

You can find the exact details of these exclusions in the Localism Act 2011 and Regulations, but as a summary, these are:

• residential properties – except where an asset which could otherwise be listed contains integral residential quarters, such as accommodation as part of a pub
• land licensed for use as a residential caravan site (and some types of residential caravan site which do not need a license)
• operational land of statutory undertakers as defined in s263 of the Town and Country Planning Act 1990, for example, railways, roads, canals, airports, docks, etc

Do I get any say in deciding if my asset should be added to the list or not?

When the Council receives a nomination form from an eligible community or voluntary body, it will evaluate the nomination according to the criteria described in the answer above. However, before doing so, the Council will notify you (in writing) that a nomination has been made for the asset that you own.

If the Council decides to include the asset on the List of Assets of Community Value, and you do not agree with this, you also have the right to request an Internal Review of the Council’s decision. There are also provisions for an independent appeal, should you remain unsatisfied with the results of the Internal Review.

Who is considered the 'owner' for the purposes of this scheme?

The definition of 'owner' for the Community Right to Bid comes from section 107 of the Localism Act 2011 and is:

1. in this Chapter 'owner', in relation to land, is to be read as follows.
2. the owner of any land is the person in whom the freehold estate in the land is vested, but not if there is a qualifying leasehold estate in the land
3. if there is just one qualifying leasehold estate in any land, the owner of the land is the person in whom that estate is vested
4. if there are two or more qualifying leasehold estates in the same land,  the owner of the land is the person in whom is vested the qualifying leasehold estate that is more or most distant (in terms of the number of intervening leasehold estates) from the freehold estate
5. in this section “qualifying leasehold estate”, in relation to any land, means an estate by virtue of a lease of the land for a term which, when granted, had at least 25 years to run
6. the appropriate authority may by order amend this section
   (a) for the purpose of changing the definition of “owner” for the time being given by this section;
   (b) for the purpose of defining “owner” for the purposes of this Chapter in a case where, for the time being, this section does not define that expression

I don’t think my asset should be included on the List – what should I do?

If a nomination is successful, the Council will notify the owner of the asset, the community group that made the nomination, and the occupier and other legal interests (if different from the owner) that the asset has been added to the List of Assets of Community Value.

As the owner, if you do not agree with this decision, you may request an Internal Review within 8 weeks of being notified that the asset has been added to the list. You may request this by completing a 'Request for an Internal Review' form which is available from the Property Services division of the Council.

The London Borough of Bexley will then complete an Internal Review within 8 weeks of receiving your request. The Council will inform both yourself and the group that nominated the asset of the results of the Internal Review.

If the result of the Internal Review is that the asset should remain on the list, but as the owner, you do not agree with this result, you may appeal this decision by applying to the General Regulatory Chamber of the First-Tier Tribunal. To do this please visit HM Courts & Tribunals Service for more information. You are advised to seek legal advice in this regard.

How long will my asset remain on the list?

When an asset is added to the List of Assets of Community Value, it will remain on the list for 5 years.

In some cases it may be removed earlier than 5 years, for example:

• if an internal review or independent appeal judges that the asset has been wrongly listed
• if a relevant disposal has taken place
• if it becomes no longer of community value

Once the asset has been removed from the List, a community group can nominate it again to be included on the list.

Does this mean that small community groups can prevent me from selling my property to whomever I want?

No community group can prevent you from selling your asset to the buyer of your choice, at any price agreed with the buyer. However, in some circumstances, you may have to wait up to 6 months before you can complete the transaction.

The Community Right to Bid allows eligible community groups to nominate your property to be included on the List of Assets of Community Value. If their nomination is successful (if it meets the criteria for 'asset of community value' that is set out in the Localism Act 2011), the Council will add your asset to the list. If your asset is on the list, and you would like to dispose of it, the 6-week and 6-month 'moratorium periods' may then be triggered, during which you cannot dispose of the asset and during which community groups have the time to prepare their bids to purchase your property.

However, at the end of the moratorium periods, you are completely free to dispose of your asset to whomever you want, at any price agreed between you and the buyer. You do not have to accept the community group’s bid at any point. Community groups do not have a right of first refusal.

What happens if the Council adds my property to the List?

If a group’s nomination is accepted, and your asset is added to the List, the Council will update the website to include your asset on the List, and notify yourself and the Nominator in writing. However, nothing further will occur until you decide to enter into a relevant disposal of your listed asset.

What exactly is a 'relevant disposal' of my asset?

A relevant disposal is defined in section 96 of the Localism Act 2011 and is:

1. a disposal of the freehold estate in land is a relevant disposal of the land if it is a disposal with vacant possession
2. a grant or assignment of a qualifying leasehold estate in land is a relevant disposal of the land if it is a grant or assignment with vacant possession
3. if a relevant disposal within subsection (2) or (3) is made in pursuance of a binding agreement to make it, the disposal is entered into when the agreement becomes binding
4. subject to subsection (4), a relevant disposal within subsection (2) or (3) is entered into when it takes place
5. in this section 'qualifying leasehold estate', in relation to any land, means an estate by virtue of a lease of the land for a term which, when granted, had at least 25 years to run

What should I do when I wish to dispose of my property that is on the List of Assets of Community Value?

If the type of disposal you wish to enter into is not covered by one of the exemptions (see next question), you must notify the Council that you intend to dispose of your asset. This is now enforceable under the Localism Act 2011 and any non-compliance will lead to your disposal becoming void. To inform the Council of your intention to dispose of the asset, please use the 'Intention to Dispose of a Listed Asset' form that was included with the letter informing you that your asset had been added to the list.

When you notify the Council of your intention to dispose of the asset, a 6-week interim moratorium period will be triggered in which you cannot sell the asset. During this time, eligible community interest groups can request to be treated as a potential bidder for that asset. If they do not make this request, you will be free to sell your property when the 6 weeks are over. However, if a request is made, a longer moratorium period will be triggered in which you cannot sell the asset, and in which community groups can prepare their bids to purchase the property. This period lasts for 6 months from the date you notified the Council that you intend to sell your property.

When this period ends you will be free to sell to anyone of your choosing – you do not have to accept the community group’s bid. You will then be covered by a 12 month 'protected period' in which you can sell your asset without being subject to any further moratorium periods.

Please note if you neglect to notify the Council of your intention to dispose of the asset, or if you claim that your disposal is exempt even though it is not, enforcement and non-compliance policies are in place that will lead your disposal to become void and ineffective.

Which types of disposals are exempt from the moratorium periods?

Usually, when the owner of a listed property wishes to sell the property, they must notify the Council of their intention, and as described above, the Council then triggers a 6-week moratorium period and provides the community with this information.

However, in some cases (24 specific situations listed in the legislation), this process does not apply.

In these cases the owner may proceed with their disposal without telling the Council, the community is not notified of the owner’s intention to sell, and no moratorium periods are triggered.

How often can these 'moratorium periods' be triggered?

For full details of these exemptions, please see Section 95(5) of the Localism Act and Schedule 3 of the Regulations.

If you are sure that the type of disposal you plan to enter into is covered by one of these exemptions, you do not have to inform the Council of your intention to dispose, and no moratorium periods will be triggered. However, it is very important that you understand the detailed legislation around exemptions, and are confident that the disposal is exempt before you continue. If it is not exempt, and you proceed with the disposal, your disposal will be considered void and ineffective due to the enforcement and compliance provisions in the Localism Act 2011.

What happens if I sell my property during a moratorium period?

Because the asset has been added to the List of Assets of Community Value, a restriction will be placed on its entry in the Land Register, in the form of the following wording: 'No transfer or lease is to be registered without a certificate signed by a conveyancer that the transfer or lease did not contravene section 95(1) of the Localism Act 2011'. This restriction will ensure that any future disposal of the asset will take place in accordance with the rules of the scheme. This means that any sale of your property that contravenes the relevant Localism  Act 2011 provisions for the moratorium periods would be considered ineffective.

How often can these moratorium periods be triggered?

Moratorium periods cannot be triggered in continuation, because of the Protected Period. This period lasts for a total of 18 months from the date you notify the Council that you wish to enter into a relevant disposal of the asset. If you do not sell your asset at the end of the interim or full moratorium periods there will be the remainder of the protected period (e.g. 12 months) in which you are permitted to sell without triggering another delay. So, if you do not manage to sell the asset after complying with the rules of the scheme, you would be free over the next 12 months to dispose of your asset without triggering another cycle of interim and moratorium periods.

What if the value of my property goes down during the 6 months that I must wait before selling my asset?

The Government realises that, in order to achieve a significant community benefit, the Community Right to Bid provisions have an impact on the rights of private property owners. Because of this, there is a compensation scheme in place that enables private property owners to claim for costs or loss incurred as a direct result of complying with the Community Right to Bid procedures. You will receive more information about this if and when your asset is added to the List of Assets of Community Value.

What if I don’t want to sell my asset to a community group that makes an offer, even if they make the highest bid?

You do not have to accept the community group’s offer, no matter how high their bid. The Community Right to Bid provisions do not restrict in any way who the owner of a listed asset can sell his or her property to or at what price and they do not confer a right of first refusal to community interest groups.
 

Are other Councils besides Bexley participating in the Community Right to Bid?

Yes. All of the following local authorities in England must also administer the Community Right to Bid since it is a provision of the Localism Act 2011 which is a piece of national legislation:

• London borough councils
• the Common Council of the City of London
• district councils
• county councils for areas in England for which there are no district councils
• the Council of the Isles of Scilly