Rural Law

The long-awaited Land Reform Bill has finally been published, prompting criticism for opponents, who have described it as a “land grab” and praise from supporters, who see it as a long overdue step to widen land ownership. Leaving aside the rhetoric, what does the Bill actually do?  It has 10 parts, covering:

  • a statement on “land rights and responsibilities”;
  • the establishment of a Scottish Land Commission;
  • access to information about who owns and controls land;
  • engagement of communities in decisions relating to land;
  • the introduction of a right to buy land to “further sustainable development”;
  • removal of the business rates exemptions for sporting estates;
  • new rules on the use of common good land;
  • new rules on deer management;
  • changes to the rules on public access and core paths; and
  • changes to agricultural holdings legislation.

Members of the Brodies rural team have blogged in greater detail on specific parts of the Bill:

Murray Soutar on land rights and responsibilities

Clive Phillips on the agricultural holdings reforms

Alex Buchan on engaging communities and the right to buy

Lorna McKay on changes to public access, common good, deer management and the abolition of business rates exemptions for sporting estates

However, here is a brief overview of each part:

Statement on “and rights and responsibilities”

The statement does not exist yet. The Bill makes provision for it to be introduced at a later date. It is to be reviewed by the Scottish Ministers every five years.

Scottish Land Commission

Made up of five Land Commissioners and a Tenant Farming Commissioner appointed by the Scottish Ministers and approved by the Scottish Parliament, the Commission may do anything that it considers “necessary or expedient” in connection with its “functions”. One of the main functions will be to review the impact and effectiveness of any law or policy relating to land, and recommend changes. The Tenant Farming Commissioner has more specific functions, which are detailed in Murray Soutar’s blog.

In appointing the Commissioners, the Scottish Ministers are to have regard to the overall expertise of members in land reform, law, finance, economic issues, planning and development and environmental issues. They must also ensure that the Tenant Farming Commissioner has expertise or experience in agriculture (but he or she cannot be a landlord or tenant of an agricultural holding).

The Commission will be obliged to produce a strategic plan, to be approved by the Scottish Parliament, setting out how it will exercise its functions. It will also be under a duty to prepare a programme of work and submit that to the Scottish Ministers at the same time as the strategic plan.

Access to information

Firstly, this section of the Bill proposes that the Scottish Ministers should be able to make regulations about access to information on “persons in control of land” by “persons affected” by that land. There’s no detail in the Bill, though it does clarify that the regulations may cover the meaning of both of those phrases (not a bad idea, one would think!) and the circumstances in which information may be sought and the method and cost of doing so.

Secondly, it proposes to amend the Land Registration (Scotland) Act 2012 so that the Registers of Scotland can request information relating to proprietors of land. The Scottish Ministers are to be given powers to make regulations setting out the procedure for that. In particular, the Bill notes that the regulations may cover “the category of person or body into which a proprietor falls” and the meaning of “controlling interest”.

Engagement of communities

One of the shorter parts of the Bill, this section requires the Scottish Ministers to issue guidance “about engaging communities in decisions relating to land which may affect communities”. The Bill envisages that, in preparing such guidance, the Ministers must have regard to the “desirability of furthering the achievement of sustainable development in relation to land”.

Right to buy to “further sustainable development”

This is one of the most keenly-anticipated parts of the Bill and which Alex Buchan has looked at in detail.  Firstly, it defines “land” comprehensively to include bridges and other structures on or over land, inland waters, canals, the foreshore, salmon fishing in inland waters (if owned separately from the land), and mineral rights (if owned separately from the land). It then states that land will be “eligible” under the proposed right to buy if it does not fall within any of the exclusions, which include:

  • land on which someone’s home is build (unless that home is occupied by an individual under a tenancy);
  • land relating to the above (i.e. garden ground);
  • croft land;
  • certain land owned by the Crown; and
  • anything else which the Scottish Ministers decide to specify at a later date.

There are specific rules on the procedure for acquisition of salmon fishings or minerals rights and also for the acquisition of certain types of tenancy interests.

There are detailed provisions on the types of community bodies which can exercise the right to buy eligible land. The Bill also envisages that, in addition to a qualifying community body being able to exercise the right to buy, such a body can instead nominate a “third party purchaser”.

Part 5 is lengthy so, in an attempt to keep this update short-ish, here is a quick canter through some points of note:

  • The right to buy can only be exercised with the consent of the Scottish Ministers.
  • The owner (or tenant, if appropriate) and any creditor or other interested party will be asked by the Scottish Ministers for their views on an application, and must respond within 60 days.
  • The Scottish Ministers must have regard to “all views” and “responses to the views which they have received” when considering whether or not to give consent.
  • The application must meet the prescribed “sustainable development conditions” set out in the Bill.
  • An applicant may require the Scottish Ministers to treat as confidential “any information or document” relating to funding to “enable the land to be put to a particular use”.
  • Registers of Scotland must set up a “Register of Land for Sustainable Development”.
  • If a transfer is consented, the consideration payable will the “market value” as determined by an independent valuer appointed (and paid for) by the Scottish Ministers, in line with the detailed provisions in the Bill.

Removal of business rates exemption for sporting estates

This does what is says on the tin – the current exemption will be removed if the Bill proceeds in its current form.

Common good

The changes here relate to a local authority’s power to take land out of the common good, provided it has the consent of the court. The Bill proposes to extend the current rules to cover the circumstances where a local authority wants to use the land for a different purpose, i.e. consent of the court will be required and the court may impose conditions.

Deer Management

This section proposes to extend the functions of deer panels appointed by Scottish Natural Heritage, to encourage engagement of the community in deer management.

Public access rights

The Bill proposes changes to the rules on the review and amendment of core paths.

Agricultural holdings

The final section of the Bill deals with agricultural holdings reform. Broadly speaking, the proposals reflects the recommendations of the Agricultural Holdings Legislation Review Group (AHLRG), with some tweaks (a more detailed analysis of this section has been provided by my colleague Clive Phillips in his blog):

  • Say goodbye to LDTs and hello to “Modern Limited Duration Tenancies” – giving agricultural lawyers their latest acronym: “MLDTs”. To be granted for 10 years-plus, one modernisation seems to be the scope for inclusion of a five year break clause where the tenant is a new entrant.
  • Despite the terms of the AHLRG report, Short Limited Duration Tenancies (SLDTs) survive (welcomed by most in the industry).
  • The Scottish Ministers may make regulations allowing for the conversion of 1991 Act tenancies to MLDTs. It’s not clear what the timescales for introduction of this may be.
  • 1991 Act tenants will no longer have to register an interest in order to be eligible to exercise a right to buy.
  • A landlord may be forced to sell a holding if ordered by the Land Court to do so, by reason of the landlord failing to remedy a material breach of his obligations.
  • Determination of a rent review of a 1991 Act tenancy, LDT or MLDT will “have regard” to the productive capacity of the holding (amongst other things). The Scottish Ministers may make regulations setting out how the productive capacity itself is to be determined.
  • There are various changes to succession and assignation. For example, the scope for assignation and succession is widened in some cases to include (bear with me, this is confusing):
    • a spouse or civil partner of a child, grandchild, brother or sister of the tenant;
    • a brother or sister of the tenant’s spouse or civil partner plus that brother or sister’s spouse or civil partner or child or grandchild;
    • a step-child of the tenant plus that step-child’s spouse or civil partner and any descendent; and
    • a step-brother or step-sister of the tenant plus their spouse or civil partner and any descendent.
  • The definition of “near relative successors” is also amended.
  • The industry-led initiative for an amnesty on improvements has been included in the Bill, plus changes to the rules on improvements being made by a landlord.
  • The earlier section of the Bill, dealing with the Land Commission, includes a lot of detail on the role and powers of the Tenant Farming Commissioner. On grounds of space this isn’t covered here – but Murray Soutar’s blog looks at this.

So that’s a whistle-stop tour of the Bill. More substantive comment will follow from the team shortly. However, an initial observation at this stage: there’s a vast amount of important detail seemingly to be dealt with by way of secondary legislation. Is this sensible? Is this fair? It’s certainly not giving any stakeholders clarity, which seems a missed opportunity.

For example:

  • Key aspects of the rules on access to information. Who is a person in control of land? Who is a person “affected” by land? What “categories” of person or body are there – and how is it determined which category applies to a proprietor of land? What is a “controlling interest”?
  • Land included/excluded from the right to buy in Part 5. For example, regulations will define what is “land pertaining to” a person’s home. Why can the extent of garden/curtilage not be defined at this stage?
  • Defining the criteria that a community body must meet to be eligible to exercise a right to buy is important. Is it right that the Ministers are able to amend this simply by regulation?

We’ll be commenting further on the Bill and its progress through Parliament – please do get in touch if there are any issues you would like to discuss.

Lorna McKay

Associate at Brodies LLP
Lorna is an Associate in Brodies’ land and rural business team. Lorna is experienced in a range of rural property matters including the purchase and sale of farms, estates and woodland, agricultural
holdings, fishings and trust and executry conveyancing. 
Lorna McKay