Residential property
20 Jun 2018 News

Community Rights to Buy - which routes are available?

The Community right to buy “abandoned or neglected land” comes into force on 27 June 2018.  Here is a quick update on the status of the three main routes to community ownership.  

This update will cover the various routes which a community may utilise to buy land, including:-

  1. The existing community right to buy land and extensions to it;
  2. The new community right to buy abandoned or neglected land;
  3. The new community right to buy land to further sustainable development.

We will also look at

  1. Changes to the RCIL; and
  2. Compulsory Sale Orders

 

  1. The existing community right to buy

The existing Community Right to Buy (CRtB) was originally introduced by the Land Reform Scotland Act 2003 and allows communities to buy available land for the benefit of the local community.

  • The right remains a pre-emptive right to buy - the landowner must wish to sell the land in the first instance. A registered “Community Interest” lasts for five years and may be renewed.
  • The Community Empowerment (Scotland) Act 2015, with effect from 15 April 2016, extended the right to include all land in Scotland: rural and  Land owned as a separate tenement remains “excluded land”.  However, salmon fishings and mineral rights can be eligible land (unless they constitute a separate tenement). Land which is subject to missives or option missives concluded before registration of any Community Right to Buy also remains excluded land. 
  • The type of body which may register to and exercise a right to buy was expanded by the 2015 Act and now includes a company limited by guarantee, a SCIO, or a “community benefit society”, regulated by the Co-operative and Community Benefit Societies Act 2014.
  • A Community Body now requires “no fewer than 10” members but only 75% of those members must be members of the relevant community. All Community Bodies must have relevant provisions in their Articles/Constitution/Registered Rules in relation to membership.
  • A body isn’t a Community Body unless the Scottish Ministers have given it written confirmation that they’re satisfied that the main purpose of the body is consistent with furthering the achievement of sustainable development.
  • A Community Body should register an interest before land is put on the market but there’s a mechanism for community bodies to make a late application to register an interest after a property has been marketed but before missives have been concluded for its sale to a third party.
  • The 2015 Act also changed some of the pertinent timescales - the Community Body now has 8 months to complete the process after triggering the right to buy (extended from 6 months).
  1. The community right to buy abandoned or neglected land;

  • This right will be brought into force with effect from 27 June 2018.
  • It was introduced by the Community Empowerment Scotland Act 2015, and is a provision for community bodies to purchase land which is abandoned, neglected or “causing harm to the environmental wellbeing of” the community.
  • The right applies to all land in Scotland. However, the landowner’s own home (and any land within its curtilage) is excluded, as is croft land and land owned by the Crown.
  • This is an absolute Right to Buy and can be used where the owner isn’t willing to sell the land but the community must be able to demonstrate that it‘s tried and failed to negotiate with the landowner a purchase of the relevant land.
  • This right’s only exercisable if the purchase is in the public interest and compatible with furthering the achievement of sustainable development in relation to the land. In order to meet this test, the community’s proposed use must be of more benefit than the existing use (or lack of use).
  • If the reason for the purchase is that the land is causing environmental harm, the community must also demonstrate that it’s approached the relevant regulators to request that any appropriate regulatory action’s taken to resolve or mitigate the harm the existing use is causing.
  • The right is exercised by the Community Body making an application to the Scottish Ministers for consent to buy the land. The Scottish Ministers may only grant consent if they’re satisfied that various criteria are met including those above and that:-
    • The exercise is in the public interest
      • The exercise is compatible with furthering the aim of sustainable development
      • The achievement of the aim of sustainable development would be unlikely if the owner were to remain the owner of the land
      • The owner (and any creditor) have been correctly identified
      • A significant number of members of the community have an interest in the land (or the land is sufficiently near to land the community has a connection with)
  • The landowner’s entitled to compensation for the land and may be compensated for other losses (including costs in relation to abortive transfers).
  • The Scottish Government has recently published a raft of regulations in relation to this community right dealing with matters including applications and ballot procedures and the process of obtaining compensation. Further secondary legislation dealing with the details is likely to follow.
  1. The new community right to buy to further sustainable development.

  • Introduced by the Land Reform (Scotland) Act 2016, this provision will also be brought into limited force with effect from 23 April 2018 (in relation to registration of rights in the RCIL, referred to below, only).
  • It also affects both rural and urban land but excludes homes and land pertaining to homes.
  • This right to buy will be another “absolute” right to buy but, again, the community must demonstrate that it’s tried and failed to negotiate a purchase with the landowner.
  • A Community Body (for this type of CRtB only) may include a body corporate and there is no minimum membership requirement. In addition, in the application to the Scottish Ministers to exercise this right, the Community Body may nominate a third party to exercise the right to buy.
  • The proposals of the Community Body must be in the public interest and likely to further sustainable development. The concept of sustainable development isn’t defined but there are various “sustainable development” criteria set out.
  • The right is exercised by the Community Body making an application to the Scottish Ministers for consent to buy the land. The Scottish Ministers may only grant consent if they’re satisfied that various criteria are met including those above, and in addition that the “sustainable development” criteria are met, namely that:-
    • The transfer is in the public interest;
    • The exercise is likely to further the achievement of sustainable development in relation to the land;
    • The achievement of the aim of sustainable development would be unlikely if the owner were to remain the owner of the land;
    • The transfer is likely to result in a significant benefit to the community and the transfer is the only or most practicable way of achieving that significant benefit;
    • If the Scottish Ministers didn’t consent to the transfer, it would be likely to result in harm to the community.
  • The landowner is entitled to compensation for the land and may be compensated for other losses (including costs in relation to abortive transfers).
  1. Changes to the RCIL

The Register of Community Interests in Land is a register maintained by Registers of Scotland and includes (in the Community Body section) all Registered Community interests.

With effect from 23 April 2018, the RCIL must now also include a section relating to the two “new” CRtBs (abandoned or neglected land and  to further sustainable development) and which shows the applications by any Community Body  (including details of  the Community Body, its address and type of organisation)  and any supporting information submitted by the Community Body, unless the Community Body  has specifically requested that the Scottish Ministers don’t publish it (i.e. in relation to any sensitive information pertaining to funding of the purchase).  All of this information should be available to anyone accessing the RCIL.

  1. Compulsory Sale Orders (“CSO”)

A CSO is a proposed (not yet brought into force) statutory mechanism which would allow a local authority to decide that vacant or derelict land or buildings could be put to better use (or more productive use) for the benefit of a community. At present the proposals are that the Local Authority would identify the land as “abandoned or derelict” and once identified a CSO would be issued by the Local Authority, who would then have the power to insist that the site be sole by public auction to the highest bidder. The Scottish Land Commission is presently developing its proposals in relation to this proposed mechanism.  

There’s no definition of “abandoned or derelict, nor of “productive” use.

The process of engaging with a local community therefore remains important and further guidance in this regard is likely to follow from the Scottish Land Commission.

If you have any queries or concerns in relation to any of the Community Rights to Buy, please contact  Alan White or your usual contact in the Land and Rural Business Team to discuss.

 

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