Radical changes to Scottish land ownership set out, but proposed recommendations likely to be unworkable, says expert

Out-Law News | 28 May 2014 | 3:42 pm | 4 min. read

Wide-ranging recommendations for reform of land ownership in Scotland set out by a group of experts will not be easy to put into practice, an expert has said.

A report published last week by the Land Reform Review Group set out measures to boost community land ownership in Scotland while limiting the maximum amount of Scottish land that could be held by a single private owner or beneficial interest. It also proposed an outright ban on Scottish land ownership by non-EU entities.

The Scottish government has since announced its intention to complete Scotland's Land Register, which sets out who owns what in Scotland, within 10 years as recommended by the group's report. However property law expert Alan Cook of Pinsent Masons, the law firm behind Out-Law.com, pointed out that it had already rejected the group's recommendation that an exemption from the business rates regime for agricultural land should be removed.

"A number of the recommendations can be presented as falling within the scope of the already-anticipated Community Empowerment Bill, and I suspect that much of the rest of the report is more likely to form part of a broad base for policy debate rather than a specific agenda for legislative change," he said.

"The report proposes a variety of mechanisms to extend the diversity of land ownership within Scotland, but I suspect that much of this would hit significant difficulties with the 'right to property' enshrined in the European Convention on Human Rights. Proposals to acquire underused land for community ownership and use may be difficult to promote in practice, as landowners' interests do need to be balanced with those of the community, and communities will still need to be able to find the funds to actually acquire the assets," he said.

The Land Reform Review Group, a group of property law experts and academics, was set up by the Scottish government in 2012 to consider ways to strengthen the relationship between communities and land ownership. Its final report set out 62 potential changes to the current arrangements governing the possession or use of Scottish land which were "reforms in the public interest which promote the common good".

According to the report, increasing the number and diversity of land owners in Scotland would be in the public interest. There was "a scale at which the ownership of a large extent of Scotland's land by one private owner should be considered inappropriate", meaning that it would be in the public interest to establish an unspecified "upper ceiling" on the overall extent of land that could be held by any one owner. It also recommended that in order to improve the "traceability and accountability" of land owners, legal entities not registered within the EU should not be able to register land in Scotland.

The review group also proposed the creation of a new power for local authorities to force the compulsory sale of vacant or derelict land, and that community councils and other local groups be given the right to request the use of this power. A Community Land Agency within the Scottish government should also be established to facilitate negotiation between landowners and communities with a view towards achieving a "significant increase in local community land ownership", it said. A new Housing Land Corporation with a "clear public interest remit" and compulsory purchase powers should also be established to acquire and develop land for housebuilding, in order to meet national housebuilding targets, it said.

"The right for councils to force the sale of vacant or derelict plots is a variation on the theme of compulsory purchase. These would surely need to be subject to similar procedures and valuation methods for the protection of landowners' interests, and so would probably not be straightforward in practice," said property law expert Alan Cook. "Commercial and land valuation realities are also likely to stand in the way of other proposals such as the creation of a Housing Land Corporation to acquire and develop land sufficient to deliver national housebuilding targets."

"Proposals to prevent non-EU entities from owning land in Scotland are also highly problematic – as well as inhibiting the inward investment which is crucial for the development of Scotland's economy, it is unlikely to achieve its policy objective of improving traceability and accountability in the public interest as a raft of EU-based entities would still be available for use. And the recommendation that the Scottish government develop proposals to establish a limit on the total amount of land in Scotland held by a single beneficial owner would, by the report's own acknowledgement, require much more thought and I suspect would again be fraught with practical difficulties," he said.

The report noted the "limited progress to date" towards completion of the Land Register. It called on the Scottish government to set a "target date" for its completion, plan a programme for registering public land and introduce additional triggers at which unregistered land would be registered. In his recent announcement, Scottish environment minister Paul Wheelhouse said that the government would prepare a "10 year timetable" and commit to registering all public land within five years.

"The Land Reform Review Group made many recommendations which we will consider carefully and we are already acting in many of these areas," he said.

"One of their key recommendations was on land registration and I agree with the Group that a fundamental step on this journey must be having a clear understanding of who owns our land in Scotland. This is a vital underpinning step in Scotland's land reform journey and will ensure that at least everyone will know who owns Scotland," he said.

Last week, the Scottish government announced that the Land Registration (etc.) (Scotland) Act would fully come into force later this year. This legislation will bring registration law more into line with the law relating to buying and selling property, and includes provisions that will increase the speed at which the Land Register will be completed. Currently, property is only transferred from the previous Register of Sasines to the Land Register when it is sold on.