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Simpler community rights to buy now in force as part of Scottish land reform drive

Out-Law Analysis | 14 Apr 2016 | 5:25 pm | 8 min. read

FOCUS: Scottish local communities will find it easier to exercise their right to buy land from today, while the right has also been extended to cover land anywhere in Scotland.

The changes were introduced by the Community Empowerment (Scotland) Act (2015 Act), which was passed by the Scottish Government last year. The same legislation also introduced two new rights to buy, which will come into force later this year, while the 2016 Land Reform (Scotland) Act (2016 Act) will introduce a further right to buy land for sustainable development.

Unlike the existing rights to buy, the three new rights do not require a willing seller. This means that a community body which was unable to negotiate a purchase from an owner under the existing regime could use the new rights to buy to force the owner to sell the land to them.

Here, we consider the background to these reforms and summarise the new rights to buy.

The existing rights to buy

Rights for communities, agricultural tenants and crofters to buy land were introduced by the 2003 Land Reform (Scotland) Act (2003 Act) and the 2003 Agricultural Holdings (Scotland) Act, with a government target of one million acres of land in community ownership by 2020. However, these rights to buy were not as widely used as the government had hoped and only half a million acres of land are currently in community ownership.

An evaluation of the community right to buy, carried out by Ipsos MORI on behalf of the Scottish Government, found that as of November 2014 only 174 applications had been made to register a community right to buy and only 22 purchases had been completed. The evaluation identified various hurdles which communities encountered when trying to exercise their rights to buy.

To help address some of these issues, the 2015 Act aims to simplify the community right to buy by making it apply to all land in Scotland rather than just rural areas, while simplifying the application process and making it easier for communities to make late applications. This last point is particularly important as it is often only when a 'For Sale' sign goes up that the community realises that there is an opportunity to buy in the first place. The crofting community right to buy will also be simplified. The agricultural tenant's right to buy will be amended to remove the need for the agricultural tenant to register their right to buy on a date yet to be confirmed.

Summary of rights to buy affecting land in Scotland

Community right to buy

Introduced under the 2003 Land Reform (Scotland) Act and amended by the 2015 Act, the community right to buy is already in force and applies to land anywhere in Scotland with no exception for homes. It gives 'community bodies' (CBs) set up in accordance with the legislation a pre-emptive right to buy land that they have registered a community interest in when it is put up for sale by the owner. Land subject to missives or an option which is concluded before the right to buy is registered is excluded from the right.

The community right to buy:

  • gives right of first refusal to the CB when the owner puts the property on the market;
  • must be registered in the Register of Community Interests in Land (RCIL) kept by the Keeper of the Registers of Scotland;
  • registration lasts for five years and can be renewed;
  • the purchase price of the land can be calculated by a district valuer if not agreed between the parties;
  • prevents the owner from selling to anyone else while the community interest is registered – any transfer of land in breach of the community's right to buy has no effect.

A CB can only exercise its right to buy if it can show:

  • that the land will be used for sustainable development;
  • that the purchase is in the public interest;
  • that a significant number of members of the community have a connection with the land;
  • that there is sufficient support from the community as a whole, as distinct from the CB, for the purchase.

'Sustainable development' has not been defined by the Scottish Government, but it appears from the applications that have been accepted that the community body set up to purchase the land must show plans to do something with the land, and not just own the land. It appears that some form of development is required, which may involve actual building or just a change of use.

Crofting community right to buy

Introduced under part 3 of the 2003 Act and amended by the 2015 Act, the crofting community right to buy applies to all eligible croft land - that is, land which is subject to crofting tenure and regulation. The right to buy is exercisable at any time. Crofting community rights to buy must be registered with the Crofters Commission.

A crofting community body (CCB) set up in accordance with the legislation can only exercise its right to buy if:

  • the CCB is properly constituted;
  • the CCB application has the consent of a majority both of the crofting community and of the crofters within that community;
  • the application is approved by the Scottish ministers.

Agricultural tenants' right to buy

Agricultural tenants under an Agricultural Holdings (Scotland) Act 1991 secure tenancy were given the right to buy their land when the original community right to buy was created. An agricultural tenants' right to buy is currently registered in a separate part of the RCIL, although the requirement for the tenant to register their right to buy will be removed at a date to be confirmed when changes introduced by the 2016 Land Reform (Scotland) Act come into force.

The agricultural tenant's right to buy is triggered either by the owner giving notice to the tenant of its intention to sell, or by the owner taking "any action with a view to the transfer of the land". 'Action', as defined by the legislation, includes advertising the land for sale or the owner "enter[ing] into negotiations with another person" with a view to selling or transferring its interest in the land.Currently, land subject to missives or where an option is concluded before the right to buy is registered is exempt from the agricultural tenants' right to buy, although this exemption will also be removed when the right to buy becomes automatic. Tenants with short limited duration tenancies, limited duration tenancies or grazing or mowing leases do not qualify.

Community right to buy abandoned, neglected and detrimental land

This is a new right introduced by the 2015 Act, which is expected to come into force in September 2016. The Scottish Government is consulting on secondary legislation until 20 June. The right will apply to land which has been abandoned, neglected or is causing detriment to the environmental wellbeing of the local community, and may include bridges, inland waters, foreshore and canals.

The right would apply where the CB has tried and failed to buy the land, and only with the consent of the Scottish ministers. The right must be registered on a new register, to be set up by the Keeper of the Registers of Scotland and known as the Register of Community Interests in Abandoned, Neglected or Detrimental Land.

In order to exercise the right, the CB must be able to show:

  • that its plans for the land are compatible with furthering the achievement of sustainable development in relation to the land;
  • that sustainable development would be unlikely to be furthered if the existing owner of the land continued to own it;
  • that its purchase is in the public interest;
  • that a significant number of members of the community as a whole, as distinct from the CB, have a connection with the land;
  • that there is sufficient support from the community as a whole, as distinct from the CB, for the purchase.

Land on which there is a building or other structure which is an individual's home, except where occupied under tenancy, will be excluded from the scope of the right; as will croft land and land which has vested in the Crown 'bona vacantia', meaning because it has no other owner, or 'ultimus haeres', meaning that the previous owner has died intestate.

Community right to buy land for sustainable development

This is a new right which will be introduced by the 2016 Act at a date to be confirmed. It will apply to all land including bridges, inland waters, canals, the foreshore, salmon fishings in inland waters and mineral rights; but will not apply to land on which there is a building or other structure which is an individual's home unless that home is occupied under tenancy. Croft land and land owned by the Crown bona vacantia or ultimus haeres will also be excluded from the scope of the right.

As above, the right would apply where the CB has tried and failed to buy the land, and only with the consent of the Scottish ministers. The right must again be registered on a new register, to be set up by the Keeper of the Registers of Scotland.

In order to exercise the right, the CB must be able to show that its purchase meets the sustainable development conditions:

  • that the transfer of the land is likely to further the achievement of sustainable development in relation to the land;
  • that the transfer is in the public interest;
  • that the transfer of the land is likely to result in significant benefit to the relevant community and is the only practicable or the most practicable way of achieving that significant benefit;
  • that not granting consent to the transfer is likely to result in harm to that community.

Asset transfer requests

Under the 2015 Act, 'community transfer bodies' (CTBs) set up in accordance with the legislation will be given the right to apply to a 'relevant authority' for ownership of land, or for rights to manage or occupy land, owned or leased by that authority to be transferred to them. This right is expected to come into force in September 2016, and a Scottish Government consultation on secondary legislation closes on 20 June 2016.

'Relevant authorities' for the purpose of this right include local authorities, health boards, national park authorities, the Crofting Commission, the Scottish Environmental Protection Agency (SEPA), the Police, Fire and Rescue Service and Scottish Water. Once an application is made, the relevant authority must publish a notice online and put a physical notice up at the site pending its decision. No physical notice is required if the site is not regularly visited, or only visited by staff of the relevant authority.

The new right will apply to land and any buildings or other structures on the land like bridges, walls or piers which are publicly-owned, and the relevant authority will be required to publish a register of assets for that purpose. However, certain types of land such as public roads, underground railways and canals will not need to be listed in the register.

As part of its application to purchase, manage, lease or use the land, the CTB must set out:

  • what it plans to do with the land;
  • how much it is prepared to pay.

The relevant authority must make its decision taking into account whether the CTB's proposals provide more benefit than the current use of the land, or any other proposals that have been made. It must agree to the request unless there are reasonable grounds for refusal.

Unlike what is the case in relation to some of the other rights outlined above, there is no prohibition on the disposal of the land by the relevant authority if, before the asset transfer request is made, the land has already been advertised for sale or lease or the authority has entered into negotiations or begun proceedings to transfer or lease the land to another person.

Rodney Whyte and Ewan Alexander are Scottish property law experts at Pinsent Masons, the law firm behind Out-Law.com.