The land of Scotland and the common good: report

Section 17 - Local Community Land Rights

1 The Land Reform (Scotland) Act 2003 was a major milestone in the promotion of community land ownership in Scotland. Part 2 of the Act introduced a right for local communities in rural areas to register a statutory right of pre-emption to acquire a property if it comes up for sale, while Part 3 of the Act gave crofting communities a statutory right to acquire their land whether or not it is for sale.

2 The Review Group considers the influence and effectiveness of both these rights in this Report. Part 3 of the Act is considered in Section 26 on Crofting while the focus here is on Part 2. There have long been calls for improvements to the operation of Part 2 of the Act, included in many submissions to the Group, and the Government is currently considering proposals for changes in the Community Empowerment (Scotland) Bill. The Group also considers in this Section, the issue of whether local communities should have other additional statutory rights over land in their community area.

17.1 Right of Pre-emption

3 Part 2 of the 2003 Act was pioneering legislation as it gave local geographic communities acting through an 'appropriate community body', the opportunity to register a right of pre-emption over land. As discussed in Section 15, these appropriate community bodies are defined in the Act so that their constitution ensures that they represent the local community acting on its own behalf in owning property and undertaking other activities. In Section 15, the Review Group used the label Local Community Trusts ( LCTs) to describe community bodies that met the same essential criteria as appropriate community bodies in the Act (See Section 15).

4 Part 2 of the Act came into effect ten years ago. Since then, there have been 167 applications by community bodies to register a right of pre-emption. ^[1] The number of community bodies involved has been less than that total, as some have made applications for more than one area of land and 15 community bodies have also applied twice for the same land, when their original five year period covered by registration has ended. Of the applications, 111 or two thirds were successfully registered and in 41 cases, the pre-emptive right to buy has been triggered by the sale of the land. Scottish Ministers approved the exercising of the right in 38 of the cases (while rejecting 3) and 18 of these resulted in a successful purchase. Amongst the applications where the right has not been triggered, some have lapsed after five years, so that there are currently 33 applications that could be triggered. ^[2]

5 There is limited information available on what happened in 21 cases where Ministers approved the exercising of the pre-emptive right to buy, yet no successful purchases were made. It appears that this has mainly been due to the community body not being able to raise the necessary funds, while in a small number of cases it resulted from the land owner deciding to withdraw from selling the land. ^[3]

6 The 18 successful land purchases that have been completed through Part 2 of the Act, have amounted to just over 21,000 ha. ^[4] However, 19,812 ha of this total was for the Assynt Estate. Two other purchases of 707 ha and 409 ha account for most of the rest of the area acquired through Part 2. The remaining 15 successful purchases were mainly for small plots of land or single buildings, reflecting the importance to local communities of these types of acquisitions.

7 The number of applications to register a pre-emptive right to buy has also followed what can be seen as the wider loss of momentum over recent years in the growth of local community land ownership due a range of difficulties faced by communities. Two thirds of the applications under Part 2 were in the first four years after the Act came into force and the number of applications a year declined to 8 in 2009/10, but has since risen to 18 in 2012/13. There are currently 6 applications to date in 2013-14. ^[5]

8 The Review Group considers that the success or otherwise of Part 2 of the Act should not be judged simply on the number of purchases through it or the total amount of land acquired. The Group understands that the existence of the community right of pre-emption has had a wider influence in facilitating negotiated purchases by local communities. However, as has become well recognised, Part 2 of the Act needs to be improved and the Scottish Government is developing proposals for inclusion in its Community Empowerment (Scotland) Bill. The Bill will not be published until after this report is published.

9 The important improvements the Review Group considers should be made can be summarised as follows:

• The right of pre-emption should be extended to urban communities, by the removing of the population threshold that restricts the right to communities in rural areas
• 'Appropriate community bodies' should be able to be constituted as a Scottish Incorporated Charitable Organisation ( SCIO) rather than just a company limited by guarantee (as discussed in Section 15)
• Local communities should be able to define their community area by a boundary line on a map rather than the current postcode based requirements
• Applying to register an interest should be less complex and onerous for local communities, both in terms of the legislation and the Scottish Government's application process
• The period for which registration lasts should be lengthened from five to ten years
• The process of re-registration should be much less demanding, if there have been no significant changes in circumstances

10 As the submissions to the Scottish Government's consultations and to this Group argue, there are also many useful refinements that should be made to improve the detail of Part 2 to help open up the potential use of the right of pre-emption to more communities. We have, separately, passed the Group's suggestions to the Government to assist in its consideration of proposals for changes through its planned Community Empowerment (Scotland) Bill. The Group considers that removing unnecessarily complex and onerous requirements for applicants will make the right a more effective tool for local community development and also by virtue of that, help facilitate more negotiated purchases by communities without recourse to the Act.

11 The Review Group considers that the Scottish Government's planned Community Empowerment (Scotland) Bill provides a crucial opportunity to improve Part 2 of the Land Reform (Scotland) Act 2003. The Group recommends that improvements to Part 2 of the Act should include widening its scope to cover urban areas; enabling appropriate community bodies to be constituted as SCIOs; allowing communities to define their area by a boundary on a map; increasing the period of registration to ten years and decreasing the requirements of re-registration; and more generally to make the legislation more straightforward and less onerous for local communities to use.

17.2 Menu of Land Rights

12 Part 2 of the Land Reform Act established the principle of giving local communities, acting through an appropriate community body and subject to appropriate conditions, a statutory property right. While enabling communities to register a right of pre-emption over land provides them with a valuable option, it is an option more suited to some circumstances than others.

13 The Review Group considers that local community land ownership should also be encouraged by giving local communities other statutory options. As with existing rights, these additional rights would be available to community bodies operating within a defined geographic boundary. The basic eligibility requirements for community bodies would be the 4 essential criteria described above ( Section 15). Then, for each option or right, there would be different requirements and processes appropriate to the nature of that particular right. As with Part 2 of the 2003 Act, such rights would apply to both public and private land.

Right to Register an Interest in Land

14 The Review Group considers there would be significant benefits if local communities had a statutory right to register a community interest in land, which simply resulted in the community being notified of sales and changes in owner. The requirements for an appropriate community body to register such an interest would be correspondingly lower than in Part 2 of the 2003 Act, because of the limited consequences of the registration. Registering a community interest as part of Registers of Scotland's Register of Community Interests in Land, would inform the present and future owners of the community's interest in an area of land and the reasons that warrant that interest being registered.

15 The opportunity for a community to register a significant interest in buildings and areas of land would be expected, by making land owners and planning authorities aware of the interest, to reduce the chances of the interests being damaged by a land owner or developer. Awareness of a community's interest in a particular building or area might also encourage more cooperation between land owners and communities over the management of such areas or in some cases, a lease or purchase by a community.

16 The Review Group considers that another particular benefit of a low threshold opportunity to register an interest in land would be that this would encourage more local communities to consider which buildings and areas of land locally are important to the identity and wellbeing of their community. This might result in the identification of one or more particular properties that the community might want to acquire if the property came up for sale and over which the community might therefore want to register a right of pre-emption. This would help communities be better prepared to make use of Part 2 of the Land Reform Act and contribute further to reducing the number of late or missed applications.

A Right to Request Public Land

17 While an appropriate community body can register a right of pre-emption over both public and private land, the right is only triggered by the sale of the land. However, in the case of public land, the Review Group considers that an appropriate community body should also have the opportunity of a statutory right to request either a lease or the purchase of buildings and land from the public body involved.

18 Appropriate community bodies already have the opportunity, on a non-statutory basis, to request to lease or buy land from the National Forest Estate through the National Forest Land Scheme. The Scottish Government consulted on introducing this type of right more generally on a statutory basis over public land through the Community Empowerment (Scotland) Bill. ^[6] The Review Group's concern is that the formal processes are adequately straightforward, while still robust enough to ensure the outcome of a request, whether successful or not, best serves the public interest.

A Right to Buy Land

19 While Part 2 of the Land Reform Act gives local communities a pre-emptive right to buy, the Review Group considers that local communities should also have an actual right to buy land through an appropriate community body, in situations where that is judged in the best public interest by Scottish Ministers.

20 The terms of an actual right to buy for local communities, and the arrangements for exercising it, would need to be rigorously defined to protect the legitimate rights and interests of any land owner affected, including the rights of property owners under the European Convention on Human Rights ( ECHR). However, Part 3 of the Land Reform Act already gives crofting communities a right to buy and its provisions have withstood legal challenge under the ECHR. ^[7]

21 The crofting community right to buy, which is discussed in Section 26 of this Report, provides a starting basis for arrangements that could underpin a similar right for local communities. However, a significant difference in the situation is that crofting communities have a direct statutory connection to the land involved through crofting tenure. With local communities, there would be an additional onus to demonstrate why the land was sufficiently important to the community, to justify that exercising a right to buy in that particular situation is in the wider public interest.

22 The nature of a right to buy, in terms of necessary procedures and requirements, would mean that there was a high threshold before a community would be likely to consider applying to exercise it. Part 3 for crofting communities has only been used once in over ten years and in that case, the LRRG understands, the community and owner, at the time of writing, are discussing a negotiated settlement. ^[8] However, the Review Group can envisage particular situations where the opportunity for a local community to exercise a right to buy could be justified in the public interest, because of the special importance of a building or area of land to the community. Instances might be where there are issues over the ownership of, for example, a community's village hall or equivalent building that is central to the life of a community or else a site of other special significance to a community, such as areas of land for housing, or local amenity and recreation.

23 The Review Group considers that providing local communities with the opportunity to exercise a right to buy in situations where it could be justified, would provide communities with a 'backstop option' in key situations when all other approaches fail. In those very particular situations, exercising the right would be a crucial contribution to building stronger communities. However, the Group considers that providing local communities with a right to buy land would further encourage negotiated purchases between communities and land owners in situations outwith the restricted circumstances in which the right might apply.

A Right to Request a CPO

24 In the paragraphs above, the Review Group has described a hierarchical set of statutory local community land rights, from the right to register an interest with a low threshold through to a right to buy with rigorous conditions. The Group also considers there could be situations where, as an approach of last resort, an appropriate community body should also be able to request Scottish Ministers to implement a Compulsory Purchase Order ( CPO) over land.

25 The Review Group notes that Ministers can compulsorily purchase land under Part 2 of the Land Reform Act. ^[9] However, this right involves land acquired by a community body through Part 2, if it transpires the community body was not eligible to acquire the land under the terms of the Act. However, the Group can envisage that circumstances might arise where an owner of land uses what might be regarded as inappropriate avoidance measures to prevent a local community exercising a legitimate right of pre-emption or right to buy, where exercising the right has already been approved by Ministers as in the public interest. The Group considers that the community should have the opportunity to request Ministers to implement a CPO over the land involved for resale to the community. The Group's view is that the existence of such a right would itself reduce the chance of circumstances where it might be necessary.

26 The menu of rights is summarised in Fig. 17 over.

27 The Review Group concludes that local communities acting through appropriate community bodies, should have the opportunity to use a range of statutory land rights which are defined to suit different needs and circumstances. The Group recommends that the statutory land rights of local communities should include a right to register an interest in land, the existing right of pre-emption over land and a right to buy land, as well as rights to request the purchase of public land and to request Scottish Ministers to implement a Compulsory Purchase Order.

Other Related Community Rights

28 The purpose of the set of statutory community land rights described above is to promote local community land ownership as part of creating stronger and more resilient local communities. Issues also arise where local communities should have an entitlement to payments or other direct benefits, from certain types of land developments within their local community area. The payments made by developers in some situations to local authorities as 'planning gain' under the planning legislation, reflects this broad principle.

29 A conspicuous issue over payments by developers to local communities has been and continues to be in relation to renewable energy projects, usually windfarms. Whether a 'community benefit' payment is made, is not part of the statutory planning process and outside planning gain. Developers each decide whether they will offer payments, the nature and amount of the payments, to whom they are made and under what conditions. As a consequence, since payments started in the 1990s, " community benefit payments have evolved in a piecemeal manner resulting in a diverse range of models being implemented by different developers, local authorities and community groups". ^[10]

30 Given the widespread issues for local communities as a result of this approach, the Scottish Government and others have sought to promote best practice, facilitate negotiation and enhance community benefit payments from renewable energy developments. As part of this, the Scottish Government established a voluntary Community Benefit Register in 2012 to encourage transparency and consistency in the community benefit process and to help communities to negotiate with developers. In addition, when FCS is working with energy developers on the land they manage for Scottish Ministers, there is a standard community benefit of £5,000 per megawatt capacity installed and an option which enables local communities to take a stake in developments. ^[11]

31 The scale of some of the on-going community benefit payments from renewable energy developments has the potential to be transformative for some local communities. However, the Review Group considers there is a clear need to continue to improve the present system for community benefit payments from these developments, as the current arrangements or lack of them can be unnecessarily divisive within and between local communities. While these payments by developers might be regarded as a goodwill gesture to the community or some form of compensation for the development, they are not an entitlement and the question arises whether they should be for these types of developments or other particular types of developments in a community's area. The Group could envisage, for example, some form of 'planning gain' through the planning system explicitly for local communities rather than the local authority. However, the Group, with its focus on land ownership and property rights, has not considered such matters further.

32 A different aspect of development in a local community's area which the Review Group did consider, is land that has been left derelict and vacant by its owner for a long period. Derelict and vacant land is an important issue in urban Scotland and the Scottish Government monitors its extent annually. The Group recommends in Section 20 of the Report on urban renewal, that local authorities should have the power under new Compulsory Sale Orders ( CSOs), to put such areas up for public auction in specified circumstances. Such areas can be particularly important for the urban communities where they occur. The Group considers that local communities should have a statutory right to request a local authority to exercise a CSO over an area of vacant or derelict land, if the Council has not initiated that itself.

33 The Review Group recommends that Local Authorities should have the right to exercise a Compulsory Sale Order over an area of vacant or derelict land, and also that Community Councils, or appropriate community bodies, should have the right to request that a local authority exercises a Compulsory Purchase Order.