The concept of a statutory Asset of Community Value (ACV) was created by the Localism Act 2011. Subsequently the Assets of Community Value (England) Regulations came into force in September 2012, with the purpose of giving a community group who had nominated the property to be an ACV the chance to bid for it before it was sold to another person.
The listing of pubs as ACVs
To give a snapshot as to what has happened in terms of pubs being listed as ACVs, it is useful to look the where the greatest geographic concentration of pubs and councils lies; in London.
Of 33 London Boroughs, 17 have listed 35 public houses as ACVs (leaving 16 London Boroughs with no pubs listed). Of those listed as an ACV it is interesting to note that 20 pubs (nearly 60%) have been listed in only five boroughs: Bromley (5), Camden (5), Greenwich (4), Lewisham (3) and Wandsworth (3). Even more interesting to note is that within London the frequency of listings per annum has declined by 30%, from 20 in 2013 to 14 in 2014. So it seems like the listing of London pubs as ACVs has calmed this year, albeit perhaps temporarily. This is probably a good bellwether for the rest of the country.
The implications of listing a pub as an ACV
For those freehold owners who are unlucky enough to have had their pub listed as an ACV, many will have felt the impact in planning and development terms, as the fact that an ACV has been made in relation to the property in question has been taken into account as a material consideration when applications have been determined. The listing of the property as an ACV, and/or the fact that it is considered and has an impact in the determination of a planning application, may well have a knock on effect on the value of the property.
Challenges to the initial listing
So what can be done? Challenging the initial listing may be hard to do, as shown in the Property Chamber First Tier Tribunal case of the Chesham Arms. However it is not impossible: an effective challenge might centre on the legal status of the community group being invalid for nominating purposes, or insufficient evidence of community use being presented. Each challenge will turn on its own facts: but making no challenge could send a dangerous, capitulatory, message out to both nominating bodies and the Council.
The Regulations do make provision for financial compensation in the event of loss as a consequence of listing. However there are relatively tough time limits on making claims for compensation, and the causal link between the ACV listing and the loss alleged to be suffered might be hard to show. But where a dilapidated or failing pub has been purchased for investment value which has subsequently been substantially diminished by listing, then a diminution in value claim may well be worth pursuing. This is particularly so in the light of the fact that there is no adverse costs risk in presenting the first claim for compensation to the Council: why turn down a first hit free of adverse consequences?
Subsequent removal from list
Under the Regulations it is possible to remove an ACV from the Council’s list if it can be shown to the Council that it is exempt: for example if the land qualifies as a residence (there are complicated rules here), or it no longer satisfies the definition of community value. The evidential burden will be on an applicant to show the exemption is satisfied, so professional assistance might be sensible.
Practical steps to avoid listing
Whether or not a pub is initially listed as an ACV cannot be controlled, as it remains within the gift of the Council. However the chances of nomination might be reduced by trying to engage with a worried community. Explain to them that the area currently used by the community either is or will be protected. Although it appears that the number of listings is dropping off following an initial rush, there are still substantial numbers of pubs being added to Councils’ lists and therefore it may be sensible to monitor for any community concerns, which might be alleviated, to pre-empt the risk of listing.
We have been involved in two recent cases were the nominations of pubs as ACVs have been successfully challenged – read more here.
The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.