The new ACV reforms: Turning ‘subject to contract’ into ‘subject to community’

The proposed amendments to the Assets of Community Value (“ACV”) regime present a shift towards strengthened community influence over land use. Developers, investors, and landlords therefore need to understand how these changes may reshape opportunities and risk. 

The current ACV regime allows communities to nominate land or buildings that further social wellbeing or local interests, so they can be added to the local authority’s register of ACV. Once listed, owners face restrictions on disposal, including:

• A requirement for the owner to notify the local authority in writing of its intention to sell
• An interim moratorium period of six weeks during which community groups may notify the local authority of its intention to bid
• A further moratorium period of up to 6 months if a qualifying community body expresses interest, allowing it time to raise funds and put forward a proposal

The following key reforms are proposed to the ACV regime under the English Devolution and Community Empowerment Bill (“Bill”): 

• Wider ACV definition: Under the current regime, an asset qualifies only where its principal use furthers social wellbeing and social interests. The Bill broadens this definition to also include “economic wellbeing or interest”, which could arguably enable employment generating assets (for example, a local factory) to fall within the definition, albeit discussions so far have predominantly focused on high street shops
• Removal of the “recent past” requirement: The Bill removes the requirement for a qualifying use to have occurred in the “recent past”. Instead, any historic use that furthered the community’s social or economic wellbeing will satisfy the test. This change enables long term vacant or repurposed buildings, including pubs closed for extended periods, to qualify as ACVs based on earlier qualifying uses
• Community right to buy: Currently, once the 6-month moratorium period ends, owners have the freedom to sell to any buyer. However, the Bill proposes a new “Community Right to Buy”, meaning that when an ACV is put up for sale, community groups will be given the first opportunity to purchase at an agreed or independently set market price, with the moratorium extended to twelve months and progress checked after 6 months
• Right to appeal: The Bill allows nominators (i.e. the community body nominating the land or property as an ACV), not just owners, to request a review of listing decisions. The Bill is also expected to extend the current right of appeal to the First tier Tribunal to nominators where a refusal to list is upheld on review, replacing the present reliance on judicial review as the only challenge route
• Sporting assets protection: The Bill introduces a new category of ACV known as “Sporting Assets of Community Value” (SACVs) to strengthen protections for sports grounds. Under the reforms, all eligible sports grounds will be automatically designated as SACVs, giving communities a first right of refusal when such assets are put up for sale. SACVs will benefit from enhanced and indefinite protection, unlike standard ACVs which require renewal every five years. Supporting facilities essential to the functioning of the ground (for example, car parks) will also be eligible for SACV designation