Community Empowerment (Scotland) Act 2015 - asset transfers: social value guidance

8. Conditionality

8.1 In the case of asset transfer to community bodies, disposal at less than market value, or with other support or concessions, may be justified by reference to the expected benefits to be delivered by the project. In that situation, relevant authorities sometimes seek to protect themselves against the risk that the benefits may not be delivered by including clauses in the contract requiring some form of restitution if the project fails.

8.2 It is for relevant authorities to determine whether it is appropriate to include such conditions in the contract (and for community transfer bodies to decide whether to accept the transfer on those terms). The use of conditions by relevant authorities to protect risk should be done in an appropriate, considered, and proportionate way. This form of protection may be supplemented by maintaining relationships with the community transfer body and supporting it to develop its capacity and deliver the project effectively.

8.3 Any conditions which the relevant authority proposes to impose to protect discount should be included in the decision notice, in sufficient detail that the community transfer body is able to decide whether they are acceptable or not. As a result, the community transfer body could seek to challenge them through the review and appeal process.

8.4 Where ownership of the asset is transferred, the main ways of protecting the discount are:

• where a reduced price was agreed in recognition of the benefits to be delivered, the community body may be required to repay the difference in price if the benefits are not delivered.

• where the price was based on a lower valuation for a particular use, conditions may be imposed to return any increase in value to the authority, if the use of the property is changed or the expected benefits are not delivered.

• where the community transfer body subsequently disposes of the asset at a point in the future for a value in excess of that paid, the community body may be required to repay the difference, or a proportion of this, to the relevant authority.

• if the property itself is important to the community, for example due to its heritage or location, arrangements may be made to enable the authority to recover the property if it is no longer used by the community body for the agreed purpose (or the community body is wound up).

8.5 Relevant authorities and community transfer bodies should agree clearly on the benefits of the asset transfer request that are to be delivered, and how, when, and by whom this is to be assessed.