The right to buy land to further sustainable development: consultation

6. Prohibitions on The Transfer of Land and Other Matters Relating to Land That a Community Are Seeking to Buy Under Part 5

Regulation Making Powers

Section 61(1)
Section 61(3)

Background and context

Section 61 of the Land Reform (Scotland) Act 2016 provide powers enabling Scottish Ministers to make restrictions about who can transfer or otherwise deal with land once a Part 5 community body has made a Part 5 right to buy application during the period when the application is pending. It also enables Ministers to suspend certain rights in or over land during the same period.

Transfers and other dealings with land for which a Part 5 application has been made

61(1) Provides that Scottish Ministers may by regulations make provision for or in connection with prohibiting, during such period as may be specified in the regulations, persons so specified from transferring or otherwise dealing with land or, as the case may be, a tenant's interest in respect of which a Part 5 community body has made an application under section 54.

Section 61(1) is qualified by section 61(2), as follows:

61(2) Regulations under subsection (1) may in, particular include provision—(a) specifying transfers or dealings which are not prohibited by the regulations,

(b) requiring or enabling specified persons in specified circumstances to register specified notices in the New Register,

(c) requiring, in such circumstances as may be specified in the regulations, such information as may be so specified to be incorporated into deeds relating to the land as may be so specified.

Exercising rights over land for which a Part 5 application has been made

Section 61(3) provides that Scottish Ministers may by regulations make provision for or in connection with suspending, during such period as may be specified in the regulations, such rights in or over land in respect of which a Part 5 community body has made an application under section 54 as may be so specified.

Proposals

Prohibitions over transfers and other actions that can be taken with respect to land during a right to buy application are already a feature of other community right to buy legislation. There are regulations governing these for Part 2 and Part 3A of the Land Reform (Scotland) Act 2003. Part 3A is particularly relevant because it is, like Part 5, a form of compulsory purchase. We suggest using the Part 3A provisions as a close model for the prohibitions and restrictions over land where a Part 5 application has been made.

We plan to model the prohibition relating Part 5 land on sections 11–15 of SSI 2018 No. 201: http://www.legislation.gov.uk/ssi/2018/201/pdfs/ssi_20180201_en.pdf which stipulates the prohibitions for land subject to a Part 3A application.

In summary we propose:

Relevant dates and timescales

• The restriction period, prohibiting certain dealings relating to land and suspension of certain rights over land, will start on the day the application appears on the Register of Applications by Community Bodies to Buy Land held by Registers of Scotland.

• If the Part 5 community body is refused consent to exercise the right to buy, the end date (of the prohibitions and suspensions) is either the day after the time period for lodging an appeal against the decision expires, or the day on which a sheriff issues a decision refusing consent to exercise the right to buy, whichever is the earlier.

• If the Part 5 community body is given consent to exercise the right to buy, the restriction period is the earlier of:

(i) The expiry period within which the community body should notify Ministers of their intention to proceed with purchase, or to withdraw from the purchase, except where the community have indicated its intention to proceed with the purchase,

(ii) the day the land owner receives a copy of Ministerial acknowledgement that the community has withdrawn its application or intends to go ahead and buy the land,

(iii) the day on which the application is to be treated as withdrawn because the community body has failed to complete the transfer of the monies necessary to complete the transfer of the land under Part 5,

(iv) the day on which the monies are paid by the community (or on their behalf) for the transfer of the land, but only where the land owner can affect the grant of a good and marketable title to the Part 5 community body, or

(v) following the consignment of the consideration or estimate of the consideration to the Lands Tribunal, the owner grants a good and marketable land title to the Part 5 community body, or the Part 5 community body gives notice to the Tribunal of its decision not to proceed with the transaction.

Question 15

Do you agree with the relevant dates and timescale outlined above, which will apply to prohibiting certain dealings relating to land and suspending certain rights over land in the case of a Part 5 application?

Yes / No / Partially

If you wish, please provide further details.

Prohibited dealings

• We propose that the following dealings are prohibited during the prohibition period:

(i) Transfer of whole or part of the land the Part 5 community body have applied to buy under Part 5.

(ii) Any actions taken with a view to the transfer of such land. These actions include advertising or otherwise exposing the land for sale; entering into negotiations with another party with a view to the transfer of the land; proceeding with any proposed transfer of the land initiated prior to the date on which the pending Part registration appeared on the Register of Applications by Community Bodies to Buy Land.

• However, there are to be exceptions to the transfer prohibitions, which will include:

(i) A transfer other than for value.

(ii) A transfer implementing or pursuing a court order (other than under section 24 of the Conveyancing and Feudal Reform (Scotland) Act 1970 (a) or a decree in an action for the division or sale of land).

(iii) A transfer between spouses or civil partners in pursuance of an arrangement between them entered into at any time after they have ceased living together and before Ministers have received the Part 5 application.

(iv) A transfer between companies in the same group.

(v) A transfer to a statutory undertaker for the purpose of carrying on their undertaking.

(vi) A transfer implementing the compulsory acquisition of the land under an enactment, or by agreement, land which could have been acquired compulsorily under an enactment. For example, compulsory purchase of land by a local authority for housing or other development purposes.

(vii) A transfer for the purposes of the Part 5 right to buy or for the purpose of right to buy under Parts 2, 3 or 3A of the 2003 Act.

(viii) Implementing missives, provided that the date on which the missives were concluded was prior to registration of the Part 5 application on the Register of Applications by Community Bodies to Buy Land.

(ix) Implementing an option to acquire land, but only if on the date when the option was created, no Part 5 application had been received.

(x) Vesting the land in a person for the purposes of any enactment relating to sequestration, bankruptcy, winding up or incapacity or to the purposes for which judicial factors may be appointed.

(xi) A transfer of land in consequence of the assumption, resignation or death of one or more partners in a firm, or the assumption, resignation or death of one or more of the trustees of a trust.

Question 16

Do you agree with the prohibitions outlined above?

Yes / No / Partially

If you wish, please provide further details.

Exemptions to the prohibitions

• However, we propose that as with Part 3A, these exemptions will not apply in certain cases. Where the exemption is because of a transfer other than for value, where the exemption is for transfer between companies in the same group, or where the exemption is because of the assumption, resignation or death of a partner or trustee, the exemption does not apply if the transfer:

(i) is or forms part of a scheme or arrangement; or

(ii) is one of a series of transactions; and the main purpose or effect, or one of the main purposes or effects, of the scheme, arrangement or series of transactions is to avoid the requirements or consequences of a Part 5 transfer.

Question 17

Do you agree with the exemptions to the prohibitions outlined above?

Yes / No / Partially

If you wish, please provide further details.

Suspension of certain rights over land - Effect of right to buy on other rights

We propose that any right of pre-emption, redemption or reversion otherwise exercisable over Part 5 land and any right or interest in Part 5 land conferred under Part 2 of the 2003 Act (the non-compulsory right to buy) is suspended for the duration of the restriction period.

Question 18

Do you agree with the Scottish Government's proposals with regard to suspension of certain rights over land, as outlined above?

Yes / No / Partially

If you wish, please provide further details.