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Row over ‘Community Value’ of East End Pub

In what is believed to be the first case of its kind, the First-Tier Tribunal has ruled that a local authority was entitled to use its power under the Localism Act 2011 to impose a moratorium on the sale of a historic east end pub, the owner of which planned to develop it into flats.

PubThe pub had been open to drinkers since 1866 but was closed after the would-be developer bought it. However, in response to local residents’ concerns, the London Borough of Hackney took the rare step of exercising its power under the Act to list the pub as a community asset.

That had the effect of requiring the pub’s owner to give the council notice of any intended sale. That would in turn give local community interest groups six weeks in which to apply to be treated as potential bidders. If such an application was made, no sale of the pub could go through for six months.

In challenging the council’s decision, the developer relied upon evidence from the property’s former owner that its use as a pub had been unviable. He also pointed out that the price he had paid for the property had taken into account its development potential and that, if converted into flats, its value could easily be multiplied by three.

However, in dismissing the appeal, the Tribunal noted that there was no certainty that planning consent would be granted for the property’s conversion into flats. The evidence as to the property’s potential viability if returned to use as a pub was also not all one way.

Although residential development of the property was ‘one realistic outcome’, so was the possibility that the property might re-open as a pub. A third potential outcome was that, if permission for a change of use were refused, the developer would ‘cut his losses’ and sell the property to someone interested in returning it to pub use.