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My property has been listed as an ACV - am I entitled to any compensation?

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?

Who can claim compensation?

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:

  • was the owner of the land at a time when it was listed; and
  • they incurred loss or expense that would not be likely to have been incurred if the land had not been listed.

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.

How do you claim compensation?

  • A claim for compensation must be made in writing to the relevant local authority before the end of thirteen weeks after the loss or expense was incurred or (as the case may be) finished being incurred. It must state the amount of compensation sought for each part of the claim and be accompanied by supporting evidence.
  • The responsible authority must give the claimant written reasons for its decisions. There does not appear to be any set timeframe within which the responsible authority has to do this.
  • The claimant then has eight weeks to request a compensation review (unless the responsible authority agrees to a longer period (in writing)). The compensation review requested can be in relation to whether compensation should be paid and/or the amount to be paid.
  • The responsible authority must complete the review by the end of the period of eight weeks beginning with the date that the authority receives the written request for the review (or such longer period as is agreed with the owner in writing).
  • The review is carried out by an officer of the authority of appropriate seniority who did not take any part in making the decision to be reviewed.
  • Where a compensation review has been carried out, the person who requested the review can appeal to the First-Tier Tribunal against any decision of the authority on the review.

Decisions on compensation reviews

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.

TLT LLP is a limited liability partnership registered in England & Wales number OC 308658 whose registered office is at One Redcliff Street, Bristol BS1 6TP England. A list of members (all of whom are solicitors or lawyers) can be inspected by visiting the People section of this website. TLT LLP is authorised and regulated by the Solicitors Regulation Authority under number 406297.

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