Community Right to Buy

On 26 March 2021, the Langholm Moor community buyout deal was completed. 5,200 acres (2,100 hectares) of land along with six properties was purchased for £3.8m. This is the largest community buyout of land in Scotland.

The Community Right to Buy was brought into law by the Land Reform (Scotland) Act 2003 and we thought we’d have a quick look at what’s involved in Community Right to Buy, who is entitled to buy, what’s involved and when it can happen. It covers the situation when a landowner wishes to sell.

This is not the same as a Community Asset Transfer – we may do an article on that topic later. That covers the situation when a community can seek ownership of publicly owned land even though there were no plans to sell it.

Who is entitled to buy?

Communities in Scotland can apply to register and interest in land that then affords them an opportunity to buy when the land comes on the market for sale. However, before you can submit an application to register your interest, you must form a compliant community body. You have to form one of the following types of organisation:

·        A company limited by Guarantee

·        A Scottish Charitable Incorporated Organisation

·        A Community Benefit Society

There is a template available to help form each of these organisations along with guidance available on the Scottish Government website. You can access that by clicking here.

Before you can register your interest, you need to define your community by one or more prescribed areas, such as a Community Council Area, Postcode area (e.g. PA) or postcode district (e.g. PA23). A full list of criteria for defining your community can be found by clicking here.

Once you’ve formed your organisation, you’re then entitled to register an interest in land.

Registering your interest in land

The community organisation, once formed, can register its interest in land. This can include fields, woodlands and other assets, such as churches, schools and community centres. In addition, the Act also allows the organisation to register an interest in salmon fishings and mineral rights (except rights to oil, coal, gas, gold or silver) which are owned separately from the land with which they are associated.

Registration of interest in the land can be made before the owner has taken any steps to sell the land but can also be made after the owner has taken steps to sell the land. An application can also be made when the owner has taken steps to transfer the land. These latter two applications are considered late applications and should only be submitted in exceptional circumstances. Where a late application is lodged, the organisation much meet additional criteria and the application also needs to be approved by the Scottish Ministers.

You need to complete an application form to register your interest in land and you can find this application form, along with guidance by clicking here. There also needs to be a demonstration of local community support to accompany the application.

A community purchase is not a compulsory purchase

The seller has to be willing to sell the land and organisations may have to wait a long time for the owner to reach that decision. Normally, a registration of an interest in the land will last 5 years. When each 5 year period expires, the interest can be registered for further 5 years periods.

When you lodge your interest in land, once it’s been checked for compliance, it is then sent to the landowner and any heritable creditor (a lender who holds a loan or mortgage over the land) for comment. A temporary prohibition is placed on the landowner or creditor that prevents them from taking any steps to dispose of the land by sale or transfer. Any comments from the landowner or heritable creditor are taken into account and if the application is approved, the registration will remain over the land for the 5 year period mentioned above.

The Registers of Scotland maintains a Register of Community Interests in Land and this allows anyone to view all community body applications along with the documents lodged in their support.

The Right to Buy process

The right to buy the land can only be activated when the landowner indicates that the registered land is to be transferred or the provisions of the Act have been breached. If the landowner wishes to transfer the land, he must complete a form to notify the community organisation and the Scottish Ministers that they propose to transfer the land. You can access and download the type of notification by clicking here.

One the right to buy has been activated and the community organisation confirms it has decided to proceed, the Scottish Government take the organisation through the right to buy process. This includes appointing an independent valuer to assess the market value of the land.

After this, ministers appoint a ballotter to ballot the community and the organisation must provide all relevant information to the ballotter using a Schedule 10 Form (you can find that form here). The community organisation must also submit evidence in support of the right to buy proposal as well as any business plan or feasibility study. Again, there is a prescribed form for this called a Schedule 12 Form and that can be found here.

Once all of this has been done, if ministers consent for the community organisation to proceed with the right to buy, the community organisation will have eight months from the date they confirmed they wished to proceed (or longer if the parties agree) to conclude the transfer of the land.

The Scottish Government produced a slide show in 2019 setting out the process. You can access that by clicking here.

This legislation gives community organisations an opportunity to own land in their own area which they can then use for the benefit of the whole community.

It is fair to say that the time, effort and energy required to understand and take forward a community’s right are enormous. The whole experience is ‘process driven’, which is to say, it’s all about how to overcome the hurdles – it’s not about the fundamentals of owning the property and doing something useful with it. Copious guidance (to the extent that it can be bewildering) is available for the processes but there’s less help available when it comes to the end result.