Community Right to Bid

What is the Community Right to Bid?

The new Community Right to Bid was introduced by the Localism Act 2011 and is now in force. It aims to keep valued land and buildings in community use by giving local people the chance to bid to buy them, if and when they come onto the market.

It gives you the opportunity to nominate public and private land and buildings to be part of a register of ‘assets of community value’. If something on this register is offered for sale, the right to bid is triggered. You will then have up to six months to prepare a bid and compete to buy it.

What can the Right to Bid be used for?

Your community can use the Community Right to Bid to bid for local land and buildings, for example:

  • village shops
  • public houses
  • former schools
  • swimming pools
  • a public open space

These might currently be in public ownership, but they could also be owned by a private company or an individual.

Assets of Community Value Exempt from Right to bid

Not all disposals of land/property will be subject to the right to bid. Exempt disposals include disposals pursuant to court orders, disposals by way of gift and, provide certain conditions are satisfied, disposals of land where only part of that land is listed. The full description of exempt disposals is contained in s95 (5) of the Localism Act 2011 and Schedule 3 of The Assets of Community Value (England) Regulations 2012.

Who can bid?

Only a “community interest group” has the right to bid. This term is defined in The Assets of Community Value (England) Regulations 2012 as:

1. A parish council if the asset of community value falls within its area; or

2. A body -

a. which is one or more of the following

  • a charity;
  • a company limited by guarantee which does not distribute any surplus it makes to its members;
  • a co-operative or community benefit society* which does not distribute any surplus it makes to its members; or
  • a community interest company*

AND

b. which has a local connection* with the land which is the asset of community value

* Notes:

i)  A co-operative or community benefit society  means a registered society within the meaning given by section 1(1) of the Co-operative and Community Benefit Societies Act 2014, other than a society registered as a credit union

ii)  A community interest company is a company which satisfies the requirements of Part 2 of the Companies (Audit, Investigations and Community Enterprise Act 2004

iii) A body has a “local connection” with land if the body's activities are wholly or partly concerned with the local authority's area or with a neighbouring authority's area AND in the case of a company limited by guarantee or a co-operative or community benefit society any surplus it makes is wholly or partly applied  for the benefit of the local authority's area, or for the benefit of a neighbouring authority's area

How the bidding works

The Community Right to Bid does not give a right of first refusal to a community interest group (as defined above) to buy an Asset of Community Value that has been successfully nominated for inclusion on the local authority’s list. What it does do is give time for them to put together the funding necessary to bid to buy the asset on the open market.

Click here to find out more about Assets of Community Value and see the current listed assets.

If an owner wants to sell property or land that is on the list, they must tell the local authority. If a community interest group is keen to develop a bid, they can then call for the local authority to trigger a moratorium period, during which time the owner cannot proceed to sell the asset.

There are two moratorium periods. Both start from the date the owner of the asset tells the local authority of their intention to sell. The first is the interim moratorium period, which is six weeks, during which time community interest groups can decide if they want to be considered as a potential bidder. If none do so, the owner is free to sell their asset at the end of the six weeks.

The other is a full moratorium period, which is six months, during which a community interest group – having declared they wish to bid – can develop a proposal and raise the money required to bid to buy the asset.

If within the six week moratorium period, the local authority has not received a written request from a community interest group requesting to be treated as a potential bidder, or if the 6 month moratorium period has ended, the owner is free to dispose of the property/land within the "protected period". This is a period of 18 months commencing on the date the owner tells the local authority of their intention to sell.  If the property is not sold within the 18 month protected period then the moratorium will be reintroduced.

Acknowledgement

Much of this content was based on information provided by ‘Locality’, which is the leading UK network of community enterprises, development trusts, settlements and social action centres.

For more information about the Community Right to Bid and the support and advice available to communities wishing to take up community rights, please visit the My Community Rights website.

Community rights main page