Community right to buy to be extended to urban areas Community Empowerment (Scotland) Bill introduced on 11 June 2014

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Introduction

In November 2013 the Scottish Government published a consultation paper to which was annexed a draft "Community Empowerment (Scotland) Bill". The consultation included proposals to extend the existing "community right to buy" to large towns and cities.

In this briefing (which is a follow up to our briefing on the 2013 consultation paper), we look at the provisions of the Community Empowerment (Scotland) Bill, which was introduced in the Scottish Parliament on 11 June 2014. This briefing provides a general overview of the Bill only, as the Bill's provisions are subject to amendment during its passage through the Scottish Parliament. The briefing looks first at areas which will be of particular interest to the property sector.

Extension of the community right to buy to urban areas

Part 4 of the Bill, when enacted, will extend the "community right to buy", which was introduced in 2004 under Part 2 of the Land Reform (Scotland) Act 2003 ("the 2003 Act").

At present, the community right to buy enables a "community body", representing a defined rural community, to apply to the Scottish Ministers to "register an interest" in land with which the community has a "substantial connection". The effect of "registering an interest" is that the community body then has an opportunity to agree a deal with the landowner to acquire the land at market value, if the owner decides to sell. In order to register an interest, a community body must first satisfy the Scottish Ministers that the main purpose of the community body is consistent with "furthering the achievement of sustainable development".

To date, land has been acquired by community bodies under the community right to buy for a variety of purposes including provision of community and business facilities, woodland regeneration, and sustainable energy production.

The community right to buy does not currently apply to land located within areas defined on "excluded land maps", which delineate settlements with over 10,000 inhabitants. The Bill amends the 2003 Act so that the community right to buy will extend to the whole of Scotland. So, whilst under the existing rules land and buildings in a city centre could not possibly be subject to the community right to buy, this will change once the Bill comes into force.

In addition to extending the geographic scope of the community right to buy, the Bill will also make it more straightforward for communities to use the right to buy provisions in practice. One of the ways it achieves this is by changing the requirement that a community must have a "substantial connection" to the relevant land, to a requirement that there is simply a "connection".

Changes made to the 2003 Act by the Bill include:

  • changes to the definition of a "community body" by including Scottish Charitable Incorporated Organisations and other legal entities, and changes to the definition of a "community" by enabling it to be defined in ways (to be prescribed) other than by reference to postcodes
  • extending the period available to the community body to complete the purchase (once the right to buy is triggered by the owner's decision to sell) from 6 to 8 months
  • allowing for counter-representations between the landowner and the community body regarding valuations of the land in question

Neglected or abandoned land

Part 4 of the Bill also contains detailed provisions giving communities a right to apply to the Scottish Ministers for permission to purchase abandoned and neglected land where there is no willing seller.

There was majority support for this concept at consultation but concerns were expressed about how to define "abandoned" and "neglected". The approach taken in the Bill is for Ministers to decide with regard to "prescribed matters". These matters are to be defined in secondary legislation after future consultation but are likely to include: the physical condition of the land or building, its current use (or non-use), any detrimental economic or environmental impact on the local area; and any failure by the landowner to comply with regulatory requirements, taking account any environmental, planning or historic designations.

Certain types of land are excluded, including most land with a domestic dwelling, certain types of croft land, "bona vacantia" or "ultimus haeres" Crown land, and other land as may be prescribed.

Transfer of public sector assets

Part 5 of the Bill gives community bodies the right to request a transfer of the ownership or the lease of, or have conferred on them rights in, any public sector land or building held by a "relevant authority". The consultation implied (in relation to such transfer requests) that relevant authorities would make decisions based on best public benefit. However, in response to feedback, the Bill takes this further and places a duty on relevant authorities to agree to a request unless they can show reasonable grounds for refusal. The Policy Memorandum accompanying the Bill emphasises that these provisions do not relate only to surplus land or buildings or those facing closure, but to any property that would help the community to achieve its aims.

In response to the consultation feedback, the draft Bill's definition of a "community body" has been simplified and now uses the term "community transfer body". In order to request a transfer, bodies such as charities and companies must have at least 20 members, and a company's articles must have provisions to ensure that, on winding up, any remaining property remains within either the community sector or the charitable sector.

The "relevant authorities" are listed in Part 3 of the draft schedule to the Bill. The list has been expanded in response to the consultation, with bodies selected because they own significant amounts of land and buildings, though Ministers may make amendments to or remove entries from the list. At present the list includes local authorities, the Scottish Ministers, Scottish Natural Heritage, Scottish Enterprise, SEPA, Highlands and Islands Enterprise, Scottish Enterprise, Scottish Water, Regional Transport Partnerships, and Special Health Boards.

Details of what information is to be provided in a request to transfer will be set out in secondary legislation but may require information to be included about how a community body would meet property maintenance costs and energy efficiency targets.

Register of common good land

Part 6 of the Bill contains provisions about common good property, with no noticeable differences to the draft version of the Bill which was published as part of the November 2013 consultation.

While local authorities may already have detailed records of their common good assets, these are not always readily available to the public, and there may be disputes about what is included. This Bill places a statutory duty on local authorities to establish, in consultation with community councils and bodies, a register of all common good property, and maintain it and make it available for the public to inspect in person and on a website or via other electronic means.

The Bill aims to ensure that a local authority consults communities which it knows have an interest in a particular property before disposing of any common good property or changing its use. Local authorities must also have regard to any guidance issued by the Scottish Ministers about the management, use, and disposal of common good property.

Allotments

Part 7 of the Bill replaces the existing legislation, namely the Allotments (Scotland) Acts 1892, 1922 and 1950 and some provisions of the Land Settlement (Scotland) Act 1919. It requires local authorities to take reasonable steps to provide more allotments if waiting lists exceed certain trigger points and ensures appropriate protection for local authorities and plot-holders.

Local relief schemes for non-domestic rates

Part 8 of the Bill amends the Local Government (Financial Provisions etc.) (Scotland) Act 1962 to create a power to allow local authorities to reduce or remit business rates in any financial year from 2015-16 onwards, thus reflecting local needs and supporting local communities. There is a requirement to have regard to the interests of council tax payers as any loss of income from non-domestic rates must be offset from other income. Reliefs would cease to apply when there is a change in the occupation of the premises.

Community involvement in planning

Part 2 of the Bill replaces the provisions on community planning in Part 2 of the Local Government in Scotland Act 2003. It provides a statutory basis, as opposed to the current informal practices in many areas, for community planning partnerships comprising local authorities and specified community bodies (listed in Schedule 1 of the Bill) to plan and achieve local outcomes.

Scottish Ministers will also have a power to establish corporate bodies to co-ordinate community planning, which could therefore hold their own budgets and assets and employ their own staff.

Will the community right to buy be extended to cover tenants' interests in land?

In our previous briefing we commented that the November 2013 consultation paper hinted that the Scottish Government was looking at the possibility of extending the community right to buy to include a right to acquire tenants' interests in land.

Some support was received for this in the consultation responses, but a number of responses urged caution, and suggested that any such extension of the right to buy should include safeguards to ensure (1) that community bodies would adhere to the terms of any acquired lease, (2) the view of the current landlord would be taken into account before the acquisition of a lease was approved, and (3) that any transfer would be in the tenants' interests.

The Bill, as introduced, does not extend the community right to buy to a right to acquire tenants' interests in land. However, the Scottish Government's analysis (published in June 2014) of the consultation responses does hint that the concept has not been shelved completely. It says that there "could be situations in the future where Ministers would want to amend what is “registrable land”…to include, for example, the interests of the tenant in tenanted land interests."

Call for evidence on the Bill issued on 26 June

On 26 June, the Local Government and Regeneration Committee of the Scottish Parliament issued a call for written evidence as part of its Stage 1 consideration of the Bill.

Organisations and individuals are invited to submit (by 5 September) written evidence to the Committee setting out their views on any, or all of the policy issues contained in the Bill.

Details on how to respond to the call for evidence are available on the Committee's web page for the Bill.

When will the provisions of the Bill come into force?

It is anticipated that the Bill, once passed, will receive Royal Assent in 2015, with the majority of the provisions coming into force on subsequent dates as decided by the Scottish Ministers and set out in commencement orders.

You can view the Bill on the website of the Scottish Parliament, and an analysis of the Consultation Responses on the website of the Scottish Government.

Topics:  UK, Urban Planning & Development

Published In: Commercial Real Estate Updates, Residential Real Estate Updates, Zoning, Planning & Land Use Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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