Asset transfer and divestment

Since the Quirk review in 2007, Councils have been encouraged to consider the community asset transfer of properties or land to third sector organisations (including CLH). This section provides advice on how local authorities should approach this topic.

  • The Quirk review established that there were no significant legal barriers to transfer, and that the perceived issues were as much about the differing cultures of the public and third sectors.  Since that time, the agenda has come under severe pressure because of the pressures on public sector finances
  • Anthony Collins Solicitors was commissioned by the Asset Transfer Unit to prepare a toolkit in relation to common issues and problems, with model documents and practice notes.  The toolkit remains available to both local authorities and community-led organisations. Links to relevant sections are included below
  • Local authority officers will often wait to obtain legal advice until the “deal” is done. Our strong view is that officers should involve in-house legal teams early in discussions, so that any issues can be flushed out and dealt with early on
  • Before possible recipients agree to the main terms of a transfer, it makes sense for them to seek independent advice on the key elements of those terms. There may be an initial cost to this, but it will save time and hassle later on
  • If a 20 year lease is being offered by the local authority, then this is very different from a 99 year lease, and the scope of what a recipient organisation will do will be significantly lessened – as may their ability to obtain funding.  If a lease is prepared which does not take account of the requirements of a particular funder for a first charge, for example, then this can mean that the organisation receiving the asset finds obtaining funding impossible
  • It is therefore vital to understand the implications of any “deal” at an early stage

Where to find out more:

Community Asset Transfers are complex and there is well-documented advice available at the following locations:

A research report published by Power to Change on the role of asset transfer.

The asset transfer legal toolkit.

Some of the key documents are also on the My Community Rights website, and on the community knowledge hub website.

The toolkit is introduced by a “legal process map” which sets out the stages of transfer. The process map contains links to many of the other key documents.

A note on some good practice points in negotiations.

Issues at the start of the process including:

  • Heads of terms
  • The links between transfer and the procurement of services
  • Clarity of expectations and how to work together well
  • Transfer at an undervalue

State aid, clawback and overage resources.

The possible transfer of staff, under TUPE.

A joint working agreement, designed to shore up long term relationships.

This document sets out some common key issues which can create problems in a transfer context if not dealt with properly.

Multiple or complex asset transfers resources.


Saffron Lane Neighbourhood Council, Leicester

Calderdale Council and Calder Valley Community Land Trust (CVCLT), West Yorkshire


Last updated in March 2020