Scotsman Legal Review: Land & rural business

The Land Reform (Scotland) Bill was passed, as expected, by the Scottish Government on 16 March, marking the end of what many people have referred to as the land reform 'journey'.

A community bid for the former Portobello Parish Church has been given the go-ahead by the Scottish Government. Picture: Greg Macvean

Still, the reaction from some land reform campaigners was that the result represented unfinished business.

The legislation includes an end to tax relief for sporting estates and new protections for tenant farmers.

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The new Scottish Land Fund opened on 1 April with £10 million available to support community buy-outs.

According to Robert Scott-Dempster, head of land and rural business at Gillespie Macandrew, the perception has been worse than the reality.

“Because we are generally trying to support the land-owning sector we don’t want to say it [the Land Reform (Scotland) Act 2016] hasn’t had a dramatic impact but what we have seen so far has not had a material impact on most of our clients,” says Scott-Dempster.

“The foreign purchaser doesn’t tend to see it as a big deal so they have been more sanguine about it.”

Meanwhile, communities in urban areas are also displaying an appetite to acquire the land for the benefit of local residents. The former Portobello Parish Church in Edinburgh became in September Scotland’s first urban community buy-out to be approved.

Scott-Dempster says the financial support available for community buy-outs has changed the perception of how the traditional Scottish landowner can go about their business.

“The whole concept of community engagement is now at the front of their mind,” he says.

“I have certainly been involved in a number of estate consultations where we have been looking at how do we best engage with the community.”

Grierson Dunlop, partner at Turcan Connell, has been keeping an active role in the progress of the Land Reform Act.

“There was concern by many in the industry that it was pushed through parliament at a pace that was too quick and that maybe the legislation doesn’t quite do what it should,” explains Dunlop.

“The first nine parts of the act are quite high level whereas part ten was the agricultural holdings part, which was a very detailed section and it was felt that that should have been given its own act.”

He says it’s still early days in terms of understanding the full impact the act will have on landowning clients.

The Land Commission is expected to be up and running by 1 April, with five land commissioners and a tenant farming commissioner. The body will look at policy and land use.

In the industry generally, there is a great deal of unhappiness among farmers, stemming largely from the prices they are getting for their produce.

Throw in the uncertainty surrounding Brexit with regard to future support for the industry and it would be all too easy to take the view that this is a sector struggling through tough times.

“There is a danger that people take extreme views,” says Scott-Dempster.

“Clearly a lot of landowners would wish it [the Land Reform Act] hadn’t happened but on reflection I think most of them have managed to keep going and get on with it.

“It does cost them and community engagement does take time, but at the moment I think it’s manageable and I don’t think we are seeing something truly radical.

“As a firm we are growing in this area and investing in it. That’s a sense of our confidence that this isn’t a sector in decline, this is a sector in transition.”

Land reform is showing no signs of dropping down the political, or even the everyday agenda.

Dunlop predicts a high volume of work coming in for lawyers and advisers, especially with existing clients wondering how the new rules will impact on their existing business.

There is scope for attracting new clients with people looking to buy in Scotland and seeking advice on how the system works.

Estate transactions as well as forestry deals – some of significant scale involving north of £10m portfolios – have been keeping Scott-Dempster’s team busy at Gillespie Macandrew.

Likewise, the drive by the Registers of Scotland for voluntary land registration in order to complete the Land Register of Scotland by 2024 has generated a steady stream of work.

“Land registration has been a very significant area of practice for anyone in this line of work,” says Scott-Dempster.

“They are unlikely to make that ten-year target but it has created an impetus in landowners taking the bull by its horns and registering their land.”

The Scotsman’s annual legal review looks at some of the most active areas of legal practice in Scotland. Informed by comprehensive data published by Chambers and Partners and Legal 500, the articles give exclusive insight into the work of more than 11,000 practising solicitors and over 460 practising advocates.