In this article I'll summarise some of the provisions of the 2015 Act. None of them are in force yet, although we now have a date - 31 October 2015 - for the activation of the provisions allowing local authorities to create their own bespoke business rates relief schemes.
Changes to the community right to buy
The community right to buy is essentially a right of first refusal. Local communities can apply to register an interest in land in their area. If their application is accepted, the registered interest gives them an opportunity to buy that land when it comes up for sale.
Some key changes:
- At the moment, the community right to buy applies only to areas with a population of 10,000 or less. The 2015 Act removes that restriction so that, once the relevant provision is in force, the community right to buy will apply to all land in Scotland.
- Before registering an application for a community interest in land, the Scottish Ministers have to be satisfied that there is sufficient support from the local community in order to justify the interest being registered - the minimum threshold being that 10% of the local community have indicated approval. The 2015 Act provides that any indication of approval from the community which is more than 6 months old has to be ignored - so communities will need to ensure that their trawl for approval is followed fairly swiftly by their application to register their interest.
- If an application to register a community interest is lodged after the land owner has already contracted to sell (or has granted a purchase option), then the Scottish Ministers must decline any such application and the third party is therefore free to complete their transaction without the land owner having to offer the property first to the community. The 2015 Act requires such disposals (in implement of pre-application contracts to sell / grant options) to be notified to the Scottish Ministers within 28 days of being completed.
- If a community registers an interest and subsequently exercises their right of first refusal, the date of entry under the purchase contract currently has to be no later than 6 months after the date on which the community first notified the Scottish Ministers of its intention to buy. The 2015 Act extends this timing to 8 months.
The key point to remember for landowners is to be aware of the new changes to the community right to buy rules and the potential impact they could have on any planned disposal. A quick search can confirm whether any community notices are registered against the relevant land/property and should be obtained before any sale / purchase contract is concluded.
Community right to force sale of abandoned, neglected or detrimental land
The community right to buy is a statutory pre-emption or right of first refusal which can only be triggered if a landowner wants to sell its property. The 2015 Act also introduces a new right to a community, in certain circumstances, to allow them to force a sale of land - even when the landowner has no intention of selling.
Such a right concerns land which is:
- wholly or largely abandoned or neglected; or
- whose condition results in or causes harm - whether directly or indirectly - to the environmental wellbeing of the community.
The right to force a sale can only be engaged once the community has tried, and failed, to agree a deal with the landowner to buy the land directly. If the right is being requested on the grounds of the environmental harm condition, the community must also have already requested that the relevant regulatory body take action to remediate or mitigate that harm.
If the Scottish Ministers consent to such an application, then the value of the land has to be determined, either by agreement between the parties or by a third party valuer.
After the value has been determined, if the community wishes to proceed with the purchase then they must, within 21 days of receipt of the valuation, notify both the Scottish Ministers and the landowner that they intend to buy the land - at the determined value. Generally, the purchase must be completed within 6 months after the Scottish Ministers approve the application.
Common good land register and consultation before disposal or change of use
Under the 2015 Act, local authorities will be bound to maintain a register that identifies all common good land in their area.
If a local authority wants to dispose, or change the use, of any of its common good land it must:
- publish details of the proposal
- notify the relevant community council and any community body that is known by the local authority to have an interest in the property and invite them to make representations and
- have regard to any representations which it receives.
Local authority business rates relief schemes
The 2015 Act also introduces provisions which allow for local authorities to create bespoke business rates relief schemes for their area. Such schemes will be specific to non domestic property in the relevant local authority area. These provisions of the 2015 Act come into force on 31 October 2015.
Local authorities are entitled to reduce business rates for any property in their area by reference to factors including categories of land, particular areas or activities - however any such reduction must cease to have effect on a change in the occupation of the relevant land or buildings.
In creating these business rates relief schemes, local authorities must have regard to the interests of domestic property council tax payers, primarily because any loss of income for the local authority which results from the proposed relief scheme will have to be offset by other income raised by the local authority - which includes residential council tax.