Community Right to Bid: Step 5

Triggering the moratorium

Once you have successfully nominated an asset of community value so that it appears on your local authority’s list, the next stage of the Right to Bid is triggered when the owner wishes to dispose of the freehold or a leasehold of at least 25 years.

The owner who wants to sell an asset of community value that appears on the local authority’s list must notify the council of their intention to do so. Community interest groups will then have six weeks to lodge a non-binding expression of interest, in which case a window of opportunity of a further four and half months (making six months in total) will come into effect to delay the sale. The full moratorium period exists to afford community interest groups sufficient time to prepare and raise money to bid for the property, potentially in competition with other interested parties.

Unlike the wider range of bodies that can nominate an asset for listing, any bid for the asset in the initial six week moratorium period can only be submitted by a community interest group – i.e. a legally constituted organisation such as a charity a company limited by guarantee that does not distribute profits amongst its members, an Industrial and Provident Society, a Community Interest Company (CIC) or a Parish Council. During the moratorium period, the owner may market and pursue discussions about the sale with whomever they choose, but may not exchange contracts other than with a community interest group (this may be an incentive in certain circumstances). However, it is important to understand that there is no right of first right of refusal for a community interest group. At the end of the moratorium period, the owner will be free to sell to whomever they wish, at the price they wish, and for a protected period of 18 months will not again be subject to a further moratorium.

There are a number of exemptions to the moratorium, when disposals are permitted to go ahead, and these are outlined in the Localism Act (2011). The most relevant are as follows:

  • Gifts or disposals to family members
  • Disposal of part of a business sold as a going concern
  • Disposals in fulfilment of a planning obligation, option or pre-emption right made before the asset was listed
  • Disposals under statutory compulsory purchase
  • Disposals for the purpose of enabling NHS services to continue to be provided on the land
  • Disposals held for the purposes of a school, a 16-19 academy or an institution within the further education sector.