Following the transfer of the Island of Ulva to the North West Mull Community Woodland Company, Amy Entwistle, a partner in the commercial real estate team at law firm Morton Fraser, looks at the right to force the sale of abandoned, neglected or detrimental land
Last month saw reports of the completion of the transfer to the North West Mull Community Woodland Company of the Island of Ulva. North West Mull Community Woodland Company is a Community Body (more below) which purchased the island for the market value of £4.65 million. The acquisition was backed by an unprecedented Scottish Land Fund award of almost the whole price – £4.415 million.
This purchase took place under the Community Right to Buy legislation which has been in place, since June 2004. Originally it only applied to areas with a population of less than 10,000. However, from 25 April 2016, the law was amended (by the Community Empowerment (Scotland) Act 2015) to apply to the whole of Scotland, regardless of the population size. This change essentially expanded the 2004 version of the right to buy (which is a right of first refusal if an owner wants to sell) from generally rural and village areas into urban areas.
Also, last week saw the “doors opening” party for the new community hub at the former Bellfield Church in Portobello, Edinburgh. This had been the first purchase (which completed in September 2017) under the so expanded right to buy regime.
The 2015 Act is intended by the Scottish Government to empower community bodies, through ownership or control of land or buildings and by strengthening their voices and decisions about public services. It covers a diverse range of empowerment matters – including community planning which I discussed in an earlier article and changes on business rates reliefs, football clubs and allotments.
In relation to the acquisition of properties by Community Bodies, aside from expanding the right to buy (which is a right of first refusal if the owner wants to sell) into larger urban areas, the 2015 Act also made other changes. Those changes give the initiative or “starting pistol” to the Community Body rather than land owner – as the new rights can be triggered by the Community Body even if the owner does not wish to sell.
The first change related to land which is owned or leased by a public body and it came into force on 23 January 2017. It gives Community Bodies a right to request ownership of, or the grant of a lease or rights over, such land. This is done by way of an Asset Transfer Request or ATR to the relevant public body. This ATR right is in addition to Community Body rights to buy which apply to any land in Scotland and, as such, give the Community Right to Buy a far wider ambit as regards publicly owned properties.
More recently, on 27 June 2018, another 2015 Act change came into force. This gives Community Bodies the right to force the sale of abandoned, neglected or detrimental land (“AND Land Right”). As with the ATR, this right to buy is not a right of first refusal exercisable only if the landowner intends to sell the property. Instead, in certain circumstances, the AND Land Right allows Community Bodies to force the sale of land to them – even when the landowner has not decided to sell or does not wish to sell it.
The property affected by the AND Land Right regime is called “Eligible Land”. This is land:
- that is wholly or mainly abandoned or neglected; or
- the use or management of which results in or causes harm – directly or indirectly – to the environmental wellbeing of the relevant community.
For these purposes, land can include structures built on or over the land, canals, inland waters and the foreshore.
Before making an application to exercise the AND Land Right, the Community Body needs to be set up and it must meet a number of constitutional requirements. E.g. three quarters of the Community Body’s members must be members of the community (which is defined by postcode units).
The application to exercise the AND Land Right, by the Community Body to the Scottish Ministers, will not be successful unless the Community Body has already tried and failed to agree a deal to buy the land. This is intended as a last, rather than a first, resort remedy.
Also, for detrimental land, the Scottish Ministers will not consent to any application unless the Community Body has already requested the relevant regulator to take action relative to the remediation or mitigation of the harm.
Of course some properties are excluded from the AND Land Right. The main exclusions are:
- land on which sits an individual’s home which is owned and not leased by him;
- certain croft land; and
- land which has fallen to the Crown as owner by way of the original owner ceasing to exist.
The application to buy Eligible Land is made by the Community Body to the Scottish Ministers. Scottish Ministers will notify interested parties including the owner and any lender who has a security over the property and any tenant of the land. Those persons will be given 60 days to send their views to the Scottish Ministers. The application will also be advertised.
The Scottish Ministers will not consent unless the application meets certain specified criteria, including:
- the community purchase would be in the public interest and compatible with furthering the achievement of sustainable development of the land;
- achievement of sustainable development would be unlikely to be furthered by the owner of the land continuing to be the owner;
- a significant number of the members of the relevant community have a connection with the land or the land is sufficiently near to other land with which those members have a connection;
- the community have approved the exercise of the right to buy by ballot; and
- the Community Body has tried but failed to reach a deal to buy the land from the land owner.
If the application relates to detrimental land, then the Scottish Ministers also have to be satisfied that:-
- the exercise of the right to buy is compatible with removing, or substantially removing, the harm to the environmental wellbeing of the community; and
- the Community Body has already made the request to the relevant regulator to take action in relation to remediation or mitigation of the harm but (even if such action is being or has been taken) the harm is unlikely to be removed or substantially removed by the owner of the land continuing to be its owner.
If the application is successful, the Scottish Ministers will appoint a valuer to determine the value of the land. This raises interesting questions as to the value of such land, particularly if it requires remediation.
If the Community Body then want to buy the land at that value, they have 21 days to notify the Scottish Ministers and the owner that they intend to buy. The purchase generally then needs to be completed within 6 months after the Scottish Ministers approve the application.
It will be interesting to see the extent to which this part of the Act is utilised. Given there have already been a number of interesting examples of Community Bodies acquiring properties or attempting to do so under the original regime, it is clear that the intention of the Act to engage communities is having some success.
This article was originally published on the Morton Fraser website.