If your property is listed as an ACV, it may severely hamper any plans you have to sell or grant a lease of it. Is there any compensation available in such circumstances and what do you need to do to claim it?
Compensation is available to an owner of land that is listed as an ACV, or was listed as an ACV in the past, if that person:
Examples of claims that can be made are set out in Regulation 14(3) of The Assets of Community Value (England) Regulations 2012 (the ACV Regulations). These include a claim arising from any period of delay in entering into a binding agreement to sell the land which is wholly caused by the moratorium being in place. They also include a claim for reasonable legal expenses incurred in a successful appeal to the First Tier Tribunal against the authority's decision to list the land, to refuse to pay compensation or with regard to the amount of compensation offered or paid. Local authorities are liable for up to £20,000 per year in compensation payments and the Government meets any liabilities exceeding this amount.
Various public departments and bodies mainly supported by public funds are not entitled to compensation at all.
As any decision of a local authority on compensation must go through an internal review procedure before it can be brought before the First Tier Tribunal, there is, as yet, no case law on compensation under the ACV scheme. Therefore, it is hard to say with certainty when compensation will be awarded, and the level of that award.
For example, what needs to be shown to satisfy the requirement that any delay in entering into a sale contract was wholly caused by a moratorium being in force?
Increasing the moratorium from six to nine months (as recommended in February 2015 by the House of Commons Communities and Local Government Committee on Community Rights) is likely to lead to a greater number of compensation claims, and the removal of Permitted Development Rights from all ACVs, rather than just drinking establishments as is currently the case, would further increase the potential for compensation claims.
Contributor: Alexandra Holsgrove Jones
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2015. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.
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