Assessing Assets, Avoiding Liabilities

Assessing Assets, Avoiding Liabilities

In the context of community managed libraries, understanding the library building as it is, will help to determine whether an asset transfer is likely to be a feasible, or desirable option for the community organisation and the local authority. It may be worth considering alternative venues from which to deliver the service.

In most cases of asset transfer there will be no opportunity for optimal site selection, unless it concerns a new build. However, the same considerations for an optimal site appraisal process are just as relevant for a pre-existing site that is being 'offered' for transfer. The appraisal process should be rigorous, needs professional advice, and needs to balance the opportunities and risks associated with each site and / or building looked at.

In essence, the site appraisal process will determine how closely the site lends itself to the vision and it will highlight any major issues which will require negotiation prior to any transfer.

A site appraisal could include the following:

  • Is the library affected by ownership issues under the scope of the Literary and Scientific Institutions Act 1854?
  • Does the site provide easy access - vehicular, servicing, pedestrian, disabled, emergency services?
  • Is there adequate car parking provision, including potential overspill?
  • What traffic impact will the project have, and how will people journey to and from it?
  • What is the condition of the building? (has a surveyor looked at the roof, structure, plant etc?)
  • Does the site or building have the right amount of net area for the activities required?
  • Does the site allow future flexibility, adaptation, extension, etc?
  • Does the site have any Planning Policy issues that may prevent or delay the project? The process is likely to be much easier if buildings or pieces of land are already being used for similar purpose; for the purposes of planning use designation, libraries are designated as Use Class D1 – Non-residential institutions ( this category includes Surgeries, nurseries, day centres, schools, art galleries, museums, libraries, halls, and churches).
  • If the planning designation is not appropriate for your intended use, how easy will it be to get a Change of Use?
  • Is the site within a Flood Risk area?
  • What are the implications of any development on adjacent sites or properties, and visa versa?
  • Is the existing building listed or in a conservation area or of archaeological value?
  • Are there any protected wildlife species?

The importance of knowing the condition of your asset is to fully expose any potential risks which will impact on the business plan and ultimately the delivery of the vision. Once any potential risks are known these need to be fully discussed with the current owner. It may be possible to factor in some recognition of this, eg: for a pre-agreed period the current owner, (or building contractor), may indemnify elements of the building against failure.

A detailed conditions report should form part of the price negotiation surrounding the transfer. If a site or building has been under-maintained in the past, this should be reflected in the negotiation process.

It is important to stress that if too many risks are exposed, and not managed, then the site or building may ultimately be of no value as an asset. Some significant risks may have to be ultimately borne by the community sports based organisation; it is therefore important to factor in the cost of any necessary insurance within the business plan.

Locality's Buildling Calculator tool can help organisations understand the ongoing costs associated with managing and maintaining a buildling in the longer term.

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