The right to buy land to further sustainable development: consultation

Overview of How the Part 5 Process Will Work Once in Force

This part of the consultation explains how we expect the Part 5 process will work in practice, once in force. It is provided to support your consideration of the questions in this consultation, and to provide a foretaste of how the Part 5 process is expected to work.

It is a general description of the process, and not a detailed explanation of each part. The processes within each stage should not always be thought of as being sequential, but are presented in an order that should help the reader consider the Part 5 process as a whole.

When Part 5 is brought into force, non-statutory guidance will be published to explain how the process works in more detail. Your views at this stage will help inform the Part 5 guidance.

For ease of presentation, this explanation of how the Part 5 process will work is broken down into the several key stages. The stages are presented as follows:

• Matters prior to the community writing to the land owner and tenant.
• Writing to the land owner and tenant.
• Land owner response.
• Right to buy application.
• Ministers' receipt of the application.
• Ministerial decision.
• Appeals.
• Other matters.

Matters Prior To Writing to The Land Owner And Tenant

Sustainable Development

A local community identifies land the transfer of which they are of the view would further sustainable development in relation to that land and which is in the public interest. The community's plans for the land should be likely to result in significant benefit to the community and be the only practicable or most practicable way of achieving that benefit.

It is a requirement under subsection 56(1) of the 2016 Act, that Scottish Ministers must not consent to any Part 5 application unless they are satisfied that certain sustainable development conditions and procedural requirements are met. As such, the local community are advised to consider the sustainable development conditions before going any further in the process, as Scottish Ministers will not be able to consent to an application unless they are satisfied that all of the sustainable development conditions are met.

The sustainable development conditions are listed under subsection 56(2) of the 2016 Act. If a community does not believe that these conditions could be met, they are advised to consider an alternative route to acquire the land in question, or other ways of acquiring land or for achieving the community's goals. This might include the use of Part 2 or Part 3A.

Subsection 56(2) states that the sustainable development conditions are met if:

• the transfer of the land is likely to further the sustainable development of the land;
• the transfer of the land is in the public interest;
• the transfer of land is likely to result in significant benefit to the relevant community;
• the transfer of land is the only practicable, or the most practicable, way of achieving that significant benefit; and
• not granting consent to the transfer of land is likely to result in harm to that community.

Benefit and Harm

In considering the conditions relating to benefit and harm, it is important to consider subsection 56(12) of the 2016 Act. Subsection 56(12) states that in determining what is significant benefit to the community, or harm to the community for the purposes of subsection 56(2), Scottish Ministers must consider the likely effect of granting (or not granting) consent to transfer the land or tenant's interest on the lives of the persons comprising the community with reference to the following considerations:

(a) economic development

(b) regeneration

(c) public health

(d) social wellbeing

(e) environmental wellbeing

Eligible Land

The community need to identify eligible land. Definitions of eligible and excluded land and tenant's interests can be found in sections 46, 47 and 48 of the 2016 Act. There is some regulatory scope to expand or restrict what land or tenant's interests are eligible under Part 5 of the 2016 Act. This is discussed in more detail further on in the consultation.

Incorporation of Community Body

Once land has been identified, the community body must incorporate itself and ensure the its constitutional documents comply with the requirements under subsections 49(2), (3), (4) or (5) depending on which type of body they have chosen to form. A community body must specify the community area, how that area is defined is set out under subsection 49(9). Subsection 49(1)(c) gives Ministers the ability to make regulations specifying other types of community bodies, and subsection 49(9)(a) gives Ministers powers to specify other sorts of areas by reference to which a community body may be constituted.

A body is not a Part 5 community body under the 2016 Act unless Scottish Ministers have given it written confirmation that they are satisfied that the main purpose of the body is consistent with furthering the achievement of sustainable development

Nomination of a Third Party Purchaser

A community body which complies with subsection 49(5) may nominate a third party purchaser to purchase the land.

Identification of Land Owners and Creditors

The Part 5 community body need to identify the owner of the land they seek to purchase and any creditor in a standard security over the land or any part of it. They can do this by looking at the title sheet to the land held by Registers of Scotland. They must also identify any tenant and any other rights or interests in the land known to them.

Writing to The Land Owner and Tenant

Writing to The Land Owner and Tenant as The Case May Be

The Part 5 community body, having now been officially constituted, write to the land owner and where applicable, the tenant, seeking transfer of the land and where applicable the tenant's interest.

Subsection 56(9)(a) allows Scottish Ministers' to make regulations about the form and content of the written request from the Part 5 community to the land owner and, where applicable, tenant. (Please note – the forms will be included as schedules to the regulations laid in Parliament. This will include the forms for the community body to write to the land owner and tenant as the case may be, and for the land owner to respond to the community body should they so wish).

As already noted, a community seeking to acquire land through Part 5 must constitute itself according to the requirements of section 49 of the 2016 Act, and have received written confirmation from Scottish Ministers that they are satisfied that the main purpose of the body is consistent with furthering the achievement of sustainable development.

Once this confirmation has been received, the community body can, in terms of the Part 5 process, write to the land owner or tenant under subsections 56(3) and (7). If a community body is formed in a manner that is not compliant with the requirements of the Act it will not be recognised as a Part 5 community body and in terms of Part 5 will be unable to submit a competent request to the land owner or tenant.

A community of any sort, local or otherwise, may of course write to a land owner or tenant at any point seeking the transfer of land or a tenant's interests as the case may be. However, this would be outside the terms of the Part 5 process, and any agreements resulting from such a request would be purely a private matter between the community and the land owner or the tenant.

It is very important to remember this because there is a requirement under Part 5 that after writing to the land owner, the Part 5 community body must wait a minimum of 6 months before submitting a Part 5 application to Scottish Ministers (this is presuming that the community still wish to proceed with the application and that the land owner has not indicated they are willing to make a transfer on the terms proposed by the Part 5 community body ).

If a community has submitted a request to the land owner unofficially (in terms of Part 5), and the community hasn't had a response or the request has been refused, this cannot be regarded as relevant for the Part 5 process. Should the community wish to seek to acquire the land in question through Part 5, they will have to constitute themselves as a valid Part 5 community body, then submit a valid request to the land owner and tenant as the case may be, then wait 6 months before being able to make a Part 5 application.

On the other hand, if a community and a land owner (and tenant where relevant) can come to an agreement outside the Part 5 process (and outside any official right to buy process) this may be a simpler and more efficient approach for all parties involved, providing that this is something all parties are willing to do. One example of how to go about this is the voluntary process outlined in the Protocol on Negotiated Sales process agreed between Scottish Land and Estates and Community Land Scotland, which can be found at the following web address: https://www.communitylandscotland.org.uk/wp-content/uploads/2016/06/CompleteCLSProtocol.pdf

For communities and those who advise them, these are matters that should be considered at an early stage of planning.

Land Owner Response

Options for Land Owners

The land owner may respond to the request from the community body, or they may choose not to. If the owner of the land agrees to transfer the land at a price and on terms agreeable to the community body, or comes up with another proposal acceptable to the community body, then the transfer of land becomes a private matter between the land owner and community body.

The community body may of course continue to take advice from groups such as the Community Ownership Support Service while in discussion with the land owner or tenant, and funding from the Scottish Government's Land Fund may be available to support the transfer.

Subsection 56(9)(b) allows Scottish Ministers to specify the form and content of responses from the land owner to requests from a Part 5 community body, and under section 56(9)(c), the circumstances under which a land owner is taken not to have responded to the request. Our proposals for section 56(9)(b) and (c) are discussed in the body of this consultation. But as already noted, forms will laid as part of the regulations laid in Parliament, and we plan to include a response form for the land owner to respond to the community body should the land owner so wish to do so.

Please note that no automatic correlation between a land owner response, or lack of response, to a valid Part 5 request, and the success or failure of any subsequent part 5 application, should be assumed. Scottish Ministers will consider each request on its own merits, according to the conditions and requirements set out in section 56 of the 2016 Act.

Note on Section 44 Guidance

As a matter of policy, the Scottish Government want land owners, tenants, land managers and communities to work together for better outcomes. Sometimes this may include discussion about transfer of land. The Scottish Government has issued guidance on community engagement relating to land in compliance with section 44 of the 2016 Act, and a link to the guidance can be found via the following web address:

https://www.gov.scot/publications/guidance-engaging-communities-decisions-relating-land/

To support this guidance, the Scottish Land Commission has issued a protocol on community engagement in decisions relating to land. This can be found at the following web address:

https://landcommission.gov.scot/wp-content/uploads/2019/01/SLC-PROTOCOL_web-30.1.19.pdf

Section 56(4) of the 2016 Act says that "In determining whether an application to buy land meets the sustainable development conditions mentioned in subsection (2), the Scottish Ministers may take into account the extent to which, in relation to the relevant community, regard has been had to guidance issued under section 44."

Where a land owner or tenant, in good faith, is already engaging with their local community, this may provide opportunities to discuss the voluntary transfer of land, or other ways of making use of the land to achieve better local outcomes.

Right to Buy Application

Minimum Six Month Pre-Application Period

After submitting its written request to the land owner to transfer the land and where the application is for the tenant's interest, also having sent a request to the tenant to assign the tenant's interest a Part 5 community body must wait for at least 6 months before submitting any Part 5 right to buy application to Scottish Ministers.

An application can follow so long as the owner has either not responded or has responded but has not agreed to the request. Where an owner has agreed to the request there is no need to progress the Part 5 application. Alternatively, it may be that the owner indicates they are open to negotiation. In this scenario, if the parties do not reach agreement, it is still open to the community body to make a formal Part 5 application.

The requirement to wait at least 6 months between submitting a written request to the land owner and submitting an application to the Scottish Ministers is established in primary legislation (section 56(3)(a) of the 2016 Act), and may not be altered by regulations.

There is no maximum time limit as to how long a community body may wait before submitting a formal Part 5 application to Scottish Ministers. However, common sense should be applied. Given that circumstances relating to land and people can change over time, in practice it is sensible to not have a long delay between submitting a written request to the land owner and making a Part 5 application although there may be circumstances where a delay is warranted.

The Community Ballot

Prior to submitting a Part 5 application to Scottish Ministers, the Part 5 community body must seek the approval, via a ballot, of members of the community as defined under subsection 49(9) of the 2016 Act. Requirements for the ballot are set out in section 57 of the 2016 Act. Scottish Ministers may make regulations about the conduct of the ballot (see subsection 57(2) of the 2016 Act), and which enable a community body to apply for ballot expense reimbursement (see section 57(8) of the 2016 Act).

The ballot must take place within the 6 months immediately preceding the Part 5 application to Scottish Ministers (see subsection 57(1)(a)). If the application is made later than 6 months following the date on which the ballot takes place, the application will be rejected.

The Two Six Month Periods Explained

It should be noted that whilst the legislation makes reference to two scenarios in which a 6 month timescale is applicable and there could be some overlap between the two, the two timescales do not run in parallel. The following two bullet points clarify the difference:

• At least 6 months prior to a community body submitting an application under Part 5 to the Scottish Ministers, the community body must have submitted a written request to the owner of the land to transfer the land to the community body (or third party purchaser) (and sent a letter to the tenant requesting the transfer of their interest, if applicable) (see subsection 56(3)(a) and (7)(a))

• During the 6 months immediately preceding any Part 5 application to Scottish Ministers, the community body must have sought and received the approval, for the Part 5 application, of its associated community (see subsection 57(1)(a))

If the Ballot Supports the Part 5 Application

If the ballot supports the application, the Part 5 application to Scottish Ministers may now be submitted. The application is to be made in such form as Scottish Ministers may by regulations specify. See subsections 54(5)(a) and 54(5)(c). As already noted, draft forms will be provided as part of the regulations laid in Parliament.

Scottish Ministers’ Receipt of The Application

Acceptance by Ministers and Registration on the New Register

The application, if accepted for consideration by Scottish Ministers, is registered by Registers of Scotland on the Register of Applications by Community Bodies to Buy Land while it is pending. Scottish Ministers may modify the type of information to be held on the Register by regulations under subsection 52(7).

Once an application is accepted for consideration by Scottish Ministers and registered, three key things happen:

Prohibitions

1. Scottish Ministers can, by regulations, make provision for prohibiting persons from transferring or otherwise dealing with land or the tenant's interest as the case may be that it is proposed would come into effect following an application, once it shows as pending on the Register (this is discussed in greater detail elsewhere in the consultation). Section 61 of the Land Reform (Scotland) Act 2016 enables Scottish Ministers to make regulations which provide for prohibiting such transfers or other dealings.

Inviting Comments

2. On receipt of the application, Scottish Ministers must invite various people, including the land owner and, if applicable, any tenant, creditor in a standard security over the land or proposed third party purchaser, to send them their views on the application within 60 days of the invitation to do so. Scottish Ministers must also take reasonable steps to invite neighbouring owners of the land for which the application relates to send their views on the application, within 60 days. Scottish Ministers must send copies of these requests to the Part 5 community body that has made the application. These requirements are in subsection 55(1) of the 2016 Act, and there are no regulation making powers to amend them.

Public Notice of Appplication

3. On receipt of a Part 5 application, Scottish Ministers are required under subsection 55(3) to give public notice of the application as soon as reasonably practicable. They must also give the date by which views from the interested parties are to be received by them and invite persons to send their views within 60 days from publication of the notice.

Subsection 55(4) requires that the public notice must be given by advertisement in such a form as Scottish Ministers may by regulations specify. Our proposals for regulations governing the advertisement are discussed further on in this consultation.

Ministerial Decision

Scottish Ministers will take a decision on the application, which must be based on the whether the sustainable development conditions and procedural requirements under section 56 have been met and taking account of all of the information available to them. These requirements have been discussed above.

Approval of Transfer

If Scottish Ministers approve the transfer, they may, under section 59, make their consent subject to conditions. In any case, within 7 days of approval of a Part 5 application, Scottish Ministers appoint a valuer, and within 8 weeks or longer period as so specified by Scottish Ministers on application by the valuer, the valuer gives a value of the land. The valuer also settles the allocation of rents and any other rights and obligations in respect of the tenant's interest where necessary.

Under section 70 the owner, community body and, where applicable, tenant and/or third party purchaser may appeal to the Lands Tribunal about the valuation of the land and allocation of rents. The community body and, where applicable the third party purchaser, have 21 days from receipt of the assessed value to confirm to Scottish Ministers, the owner of the land and, where applicable, the tenant days to confirm that they wish to proceed with the purchase.

Completion of Purchase

Section 63 details the requirements for the completion of the purchase and section 64 details the completion of the assignment of the tenant's interest, if applicable. Alternatively at this point the community may decide not to go ahead with the transfer.

Appeals

Under section 69 specified interested parties, including the land owner and the Part 5 community, may appeal to the sheriff about the decision.

Other Matters

Compensation

Compensation may be paid as provided for under section 67. Anyone who has incurred loss or expense as a result of one of the reasons listed under subsection 67(1) or (2) where there is a third party purchaser can seek compensation. This includes owners, previous owners, and tenants, but is not limited to them.

Where compensation is due, Scottish Ministers may pay the community body or third party purchaser a grant towards this as provided for under section 68. Regulations relating to compensation are to be made under subsection 67(5) and relating to grants towards compensation under subsection 68(6). Our proposals for these regulations are discussed further on in this consultation.

Mediation

Section 73 provides that Scottish Ministers, on being requested to do so by certain persons (including land owner, tenant and Part 5 community body), may take steps to arrange mediation.

Advice

The local community are encouraged to begin seeking advice on their plans for land acquisition. This could be from the Scottish Government's Community Land Team, the Community Ownership and Support Service (COSS), or others.

Funding

Communities are encouraged to begin enquiring into funding at an early stage in the process.

Lands Tribunal

At any time before Scottish Ministers take a decision on a Part 5 application, certain persons, including a community member or land owner, or tenant where the application relates to a tenancy, may refer any questions relating to the application to the Lands Tribunal. This may result in certain conditions being imposed on any RtB consent by Ministers. Details of this are under section 71.