What is a Community Asset Transfer?
For those that may need a quick refresher – Local authority organisations sometimes conduct an asset transfer to voluntary or community led organisations. This is usually in return for reduced or minimal rents, preferential terms or a full ownership transfer. This can come in the form of short-term licences to long-term leases and can involve the management or ownership of buildings and/or land.
Giving local organisations the opportunity to manage these facilities helps provide independence and financial sustainability, whilst creating lasting change in local neighbourhoods. So far, so good.
However, resources and time are often in short supply in these situations, especially in the initial rush to save assets from being lost for future community benefit. Site selection and feasibility, options for alternative uses and deadlines for funding may all impact on the ‘window of opportunity’ afforded communities.
Community organisations should not allow external pressures to force them into agreeing to something if they are not convinced of a project’s potential to be viable, manageable and sustainable.
Top tips for a CAT
- It is important to be clear about who owns or is responsible for what under the agreement, including any accompanying land.
- Use realistic timescales as CATs can take a long time to process.
- Involve legal advisors from the beginning, on both sides, to make sure everything is done correctly.
- Check that the Local Authority has the power to successfully transfer the asset before you undertake any work at risk.
- Make sure that all documents involved are correctly reviewed by legal advisors.
Protecting your assets
As part of your asset transfer you may be required (depending on the terms) to be responsible for insuring buildings, land, sports grounds, playgrounds and so on. It’s important that adequate insurance is in place with the correct sums insured. The cover to be considered should include;
- Buildings insurance (possibly including accidental damage and subsidence). It’s worth bearing in mind that some properties may have difficulty securing buildings insurance such as those in high flood risk areas. Please note that any smaller structures such as sports sheds or port cabins also come under this section.
- Contents insurance that come as part of the transfer (i.e. sports equipment, furniture, carpets and other associated flooring, blinds and curtains, kitchen equipment to name a few).
- Business Interruption insurance; this cover is only available where there is a material damage risk (i.e. buildings or contents insurance).
- Liabilities; it’s important that all premises are listed under your policy and if the transfer includes sites away from the main premises, such as community playgrounds or sports fields, they also need to be declared to insurers.
This blog was written by ACEVO, with the kind support of Endsleigh.
To discuss your insurance needs in more detail, contact your dedicated Endsleigh Account Manager, Rachael Romasanta on telephone number 07841 496839 or email Rachael.email@example.com. More information on Endsleigh can be found here.