Do right to buy changes strike the right balance?

Since April, it has been easier for communities in Scotland to exercise the right to buy neglected or unused land. Communities have welcomed these changes but in practice, will they work for both communities and landowners?

Royal Scotsman train has been scratched by lineside foliage during its Scottish trips this year?

Community right to buy was introduced in the Land Reform (Scotland) Act 2003 as part of a Government target of a million acres of land being in community ownership in Scotland by 2020. However, the right was not as widely used as hoped and only half that was in community ownership by 2014. The Scottish Government commissioned an independent review that identified hurdles experienced by communities when trying to exercise their right to buy. To address these, the 2003 Act was amended by the Community Empowerment (Scotland) Act 2015 which came into force on 14 April 2016.

The 2015 Act allows eligible community bodies to register an interest in land for the benefit of the local community so that, if and when the landowner takes action to sell, the community has a “pre-emptive” right to buy the land. The Act aims to make the initial application process simpler and easier for communities to make late applications. This is significant; a community often only becomes aware of an opportunity to buy when a For Sale sign goes up.

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Only communities with a population of up to 10,000 were previously able to register an interest but the right now applies to all communities. Community bodies can register an interest in any land, such as churches, pubs, estates, empty shops, woodland, fields and more. A registered interest lasts for five years and can be re-registered at five-yearly intervals.

The community body must be a company limited by guarantee, a Scottish charitable incorporated organisation or a community benefit society. Before allowing a community body to register an interest, the Scottish ministers must be satisfied the acquisition of the land will achieve the aim of sustainable development and be in the public interest and that a significant number 
community members have a connection with the land, and support the registration – a lower test than under the original legislation.

If the right to buy is triggered, a community has eight months to complete the purchase. If the registered interest remains on the public register, a landowner is prohibited from transferring the affected land unless the transfer falls within a limited number of exemptions. The community right to buy is not a forced sale or compulsory purchase by the back door. It is not intended as a means of blocking development, although this could be a side effect.

But how will the right to buy affect communities? A notable example of an attempt at community empowerment pre-2015 Act is Castle Toward near Dunoon. The South Cowal Community Development Company (SCCDC) campaigned for several years to buy the estate from Argyll & Bute Council. Despite significant support in the community and £850,000 being raised, the Council turned down their bid, arguing the price was significantly below their valuation of £1.75 millio. SCCDC argued unsuccessfully that the valuation should be lower and time should be given to raise necessary funds. Negotiations collapsed and some weeks later, it emerged the council had entered into a contract with a developer to buy Castle Toward at a price of £1.5m.

The 2015 Act, designed in part to resolve such issues, should provide more clarity to the valuation process. However, local authorities (and landowners) will still require (and want) to get best value for their surplus land and the onus will be on them to demonstrate any enhanced development value.

There is no doubt the changes could give more power to communities. It remains to be seen whether the provisions will alter the outcome of a Castle Toward-type situation. However, if communities are organised and quick they should have a better chance of securing a genuine seat at the negotiating table.

Cassy Auld is a partner, Weightmans (Scotland) LLP