Community Assets No 12 - 1 CPO-ing and 2 Funding the Acquisition No 1

Community groups may need to find the finance to acquire an asset of community value when exercising the right to bid provisions of the Localism Act 2011, section 98.

Circular 06/04 (as amended with the addition of Appendix AK, p57) advises that local authorities when seeking confirmation of a CPO to must provide details of funding. The expected sources cited elsewhere in the Circular include:

• full funding by the LA itself;
• full or partial funding by the requesting group; and,
• contribution from the private sector. 

Much of the detail is in paragraphs 20 to 23 of Part 1 of the memorandum to the Circular. The paragraphs also explains the need to give details of  possible "impediments" to the project. (See link below.)

http://www.communities.gov.uk/documents/planningandbuilding/pdf/1918885.pdf

It is pretty obvious that the group will have their work cut out in meeting the deadlines of both:

• the compulsory purchase procedures;
• any moratorium and right to bid (Localism Act 2011, ss 95 to 99) resulting from the owner's intended disposal; and,
• grant application procedures if say, a grant from the National Lottery or other body might be sought.

An important point is that all the details should, it seems, be upfront at the time of preparing the draft CPO; the Minister needs to know!

Community Assets No 2 - Moratorium on a Disposal (Update No 2 - 23 November 2011)

The Localism Act 2011 requires an owner who has a property which is listed on the local authority's list of assets of community value to give notification of disposal. This will kick in an interim moritorium period of disposal, ie six weeks in which a community group may declare an interest in exercising their right to bid for the property. If one does so a full moratorium  period on the disposal arises, namel six months.

It follows that the stakeholders will all have to be alert to the impact of such a moratorium, namely:

• the owner should be aware that the property is on the list and be concerned that the appropriate "notification of disposal" (see section 96)  is made;
• any owner's estate agent should take into account the timing of the various periods given in the chapter, eg "full moratorium period", "interim moratorium period" and "protected period";
• prospective buyers (both community buyers or private buyers) will need to understand the nature and timings of any possible delays;
• any community interest group (see section 95(6)) wanting the property will need to comply with the procedures;
• the local authority (see section 106 (1), (2), (3), and (4))  will need to be geared up to give effect to the procedures.

Once the Regulations are published (probably in a few months) the full gamut of the legislation will begin to bear!


A point to bear in mind: where the vendor has a "going concern", eg as a branch in a bank and decides to close the bank branch, it may be difficult afterwards to maintain or claim the "community value" in the empty property. The issue is that the "community value" may lie in the continuation of the use, in this case banking: it is not in the property per se.

Community Assets No3 - Compulsory Purchase (Update No1 17 November 2011)

Communities facing the loss of treasured property-based assets, eg a privately owned pub, post office or a shop, may now feel empowered and emboldened to seek a compulsory purchase order (CPO). They would have to do this "via" the appropriate local authority, ie one with the relevant powers of acquisition.

Local authorities are issued with new guidance (in Appendix KA of Circular 06/04) on the expectation. Once a community group get to hear of the guidance they may feel justified in going for the CPO route - particularly where private treaty negotiations have failed.

All parties in the process will feel the weight or impact of the paper work generated - particularly the private owner who may want to retire quietly from his or her business with a nest egg. It is probable that CPOs still take a minimum of about say, 15 months so the retirement and the prospect of a quick sale for other use may be lost.

Prior to any CPO the owner may face a moratorium on an intended disposal of his or her property (because it is deemed to be an asset of community value). This new procedure under the Localism Act 2011 (November 2011) is intended to give a community interest group a chance to declare an interest in buying the property.