The transfer of assets to the community may be on the basis of transfer of title eg at below market value, or by way of lease or management.
Transfer – Sale
To maximise the benefits of asset transfer, outright ownership of the title may be the preferred mechanism for community involvement in the management and development of assets - this is particularly true of assets where there will be significant investment in terms of grant and loan funding. Clear title will be important to both public and private funders with the large grant funders who are accessible to community groups insisting on this model.
In some situations a long lease (leases can have a duration of up to 175 years) may be the most appropriate form of tenure. For example, a local authority may wish to retain ownership (and therefore control) of assets which are of strategic or historic significance. It may also be the case that the local authority's title is subject to title conditions making the grant a long term lease a more attractive prospect for external funders.
From a community’s perspective short term leases can be an effective interim step to full ownership. It can provide a range of benefits through -
- enabling the community group to confirm they have the necessary support of the wider community to develop the building and services – increasing levels of participation from volunteers and other interested parties.
- sustaining patterns of usage within the building while the business plan is being developed and assumptions tested
- building the confidence within the group
- demonstrate that the group has the operational capacity to run and manage the facility
- keeping the building occupied and heated minimising the potential for deterioration
Occupation Agreement / Licence to Operate
This type of agreement may well be appropriate where there is an interconnected lease and service level agreement. For example, in the delivery of care services from a local authority-owned care facility, swimming pool or a facility where the local authority continues to deliver services from part of the facility. This type of arrangement has also been used effectively to enable community groups time to develop their business plan while keeping a facility open.