Pub developers face ‘community welfare’ hurdle

In a warning to property investors that the advent of the Localism Act 2011 means that broad issues of community welfare may stand in the way of their plans, a tribunal has stepped in to protect a rural pub from the prospect of development.

The pub had served a rural village as its ‘local’ for 170 years before it was acquired by a company with an eye to its development potential. However, at the behest of a group of concerned residents, the relevant local authority listed the pub as an asset of community value under the Act.

That had the effect of imposing a five-year moratorium, during which the pub could not be sold without giving notice to the local authority. On such notice being given, local community groups would have a six-week period in which to put forward alternative proposals for the pub’s future use.

It would remain up to the company to decide whether a sale went through, to whom and for how much, and the Act contained provision for compensation to be paid by the local authority if it lost money as a result of the listing. However, the company challenged the listing before the First-tier Tribunal (FTT).

In dismissing the company’s complaints and confirming the listing, the FTT noted that the case took place against the background of many rural pubs facing great financial challenges. The pub had for generations formed the focus of community events and a venue for local people to meet each other.

The cost of restoring the property to its original use was estimated at a minimum of £150,000, but a majority of local people strongly desired that it should re-open as a pub in due course and it was ‘not merely pie in the sky or fanciful’ that this might be achieved during the five-year moratorium.

Contact: Yildiz Betez