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Land Reform (Scotland) Act 2003: Part 2
Community Right to Buy: Guidance

1 GUIDANCE FOR COMMUNITY BODIES

1.1 Initial steps

1. The initial steps for a community body (CB) wishing to register an interest in and buy land under Part 2 of the Act may vary depending on the individual preferences of the body, local circumstances and the proposals for the land use. In any case, this is likely to involve considerable preparation and commitment both throughout the process and following purchase of the land. While the Act requires a CB to be a company limited by guarantee, for example (see paragraph 1.4 below), it is for each individual CB to determine where they start. You might begin with an idea for a local facility, or you may wish to form a CB to provide support, or you might initially want to gather a few local members of the community to develop your proposals. Alternatively, some CBs or individuals may wish to discuss their proposals with the landowner at an early stage in order to negotiate a sale without using the legislation.

2. It is often useful to consider how previous successful community purchases were developed and how potential risks and difficulties were managed and, if you proceed through the right to buy stages, how they have since progressed. Information on existing community land initiatives can be obtained from individual websites, from their registered office, or from the funding agents detailed at Annex E.

3. Whatever way you decide to begin, assistance will be available at the various stages of the registration and right to buy processes from the main contacts detailed in this guidance and listed at Annex E. Annex A provides a flowchart of the main stages of the process.

1.2 Registrable land

4. A CB can apply to Ministers to register an interest in any land other than excluded land. Section 33 of the Act describes eligible land as "registrable land", appearing to Ministers to be rural, and provides for an order to be made to identify land excluded from the Community Right to Buy. "The Community Right to Buy (Definition of Excluded Land) (Scotland) Order 2004" lists excluded settlement areas and provides for copies of maps detailing excluded land to be made publicly available at the Offices of the Scottish Executive Environment and Rural Affairs Department at the address in Annex E. The Scottish Executive Library and local Agricultural Area Offices with registrable land in their area also hold copies of the maps (see Annex E for details). The set of maps is known as "The Community Right to Buy (Definition of Excluded Land)(Scotland) Order 2004: Definitive Maps", and should enable you to easily determine whether or not the land in which you wish to register an interest is registrable. For the purposes of this legislation, excluded settlements are settlements of over 10,000 population, as defined by the General Register Office for Scotland (GROS). Excluded land also includes the foreshore areas adjacent to excluded settlement areas. All other land is registrable.

5. Registrable land includes salmon fishings and mineral rights. In accordance with section 53 of the Act, a CB may apply to register an interest in these ancillary rights providing it is at the same time registering, or has already registered an interest in, or already owns, the land to which those rights relate.

1.3 Defining your community

6. Section 34(5) of the Act defines a community by reference to postcode unit (an area of land covered by a full postcode, e.g. EH14 1TY) or units in which the CB is situated. Members of the community must also be resident and be registered to vote at a local government election at an address within the postcode unit or units defining the community. Postcode unit information can be obtained from the GROS website at www.gro-scotland.gov.uk/grosweb/grosweb.nsf/pages/geoprods. As postcode unit boundaries can be updated regularly, you should ensure that the information you provide is up-to-date. Polling district information should be available at your local library or from your local authority. What is meant by a "community" can vary from case to case, and it is for each CB to demonstrate to Ministers how the community has been defined, for example, the community may include householders further afield if those householders can demonstrate a connection with the land to be registered. In determining any application to register an interest in land, Ministers will look for an inclusive approach.

1.4 Forming a CB and registering your CB as a company limited by guarantee

7. Section 34 sets out the criteria that define a CB. Ministers have a discretionary power in section 34(2) to accept a CB company with fewer than 20 members. However, this will only be in exceptional circumstances where, for example, a remote rural community may not contain 11 members (Since the Act requires a majority of the CB to be community members, 11 would be a majority of the 20 members required). If section 34(2) is to be applied, you should demonstrate why it is not possible for your CB to have 20 members and ensure that the application cannot be construed as a private or family application.

8. You should demonstrate that members of your community have overall control of the company. However, the Executive recognises that non-community members can contribute substantially to, and play a vital part in, the success of a community purchase by bringing the necessary skills and expertise.

9. Section 34 also requires that a CB must register as a company limited by guarantee and details the requirements which must be listed in the company's memorandum and articles of association. It is possible to buy an "off-the-shelf" product for a reasonable price, which will enable your CB to fulfil this requirement. Following a registration of interest in land or completion of a right to buy, section 35(1) requires that any changes to the company's memorandum or articles of association must first be approved in writing by Ministers. Written details of the changes should be provided by the CB in such cases.

10. Further information on the "off-the-shelf" product can be obtained from Companies House, 37 Castle Terrace, Edinburgh EH1 2EB or from their website at http://www.companieshouse.gov.uk. Also, the Scottish Council for Voluntary Organisations (SCVO) provides information to members of the public on setting up a charitable company. See website at www.scvo.org.uk

1.5 Demonstrating community support

11. Demonstrating community support is vital to the success of any application to register an interest or to proceed with the right to buy. To register an interest in land, section 38(2) requires you to demonstrate to Ministers that you have the support of at least 10% of your community, as defined at 1.2 above. It is for you to decide how the minimum 10% support is demonstrated, as there is no requirement for a ballot at this stage. This could be demonstrated by, for example, a signed list of all those who support the registration, providing those listed are also eligible members of the community as defined under section 1.3 above. In exceptional circumstances, less than 10% support may be acceptable, and Ministers will consider carefully the reasons as to why this is the case.

1.6 Registering an interest in the "Register of Community Interests in Land" (RCIL)

12. Once you have established your CB as a limited company and achieved the necessary community support, you should now consider completing your application form. You must use the official form contained in this pack, or attached as Schedule 1 to the Community Right to Buy (Forms)(Scotland) Regulations 2004, or downloaded from the Land Reform website at

http://www.scotland.gov.uk/about/ERADRA/LURP4/00017063/ApplForm.aspx

13. Your application form and supporting documents will be considered by Ministers and will be used to inform their decision as to whether or not your application to register an interest in land should be approved. It is essential, therefore, that your application is fully completed and all supporting documentation is attached. Separate guidance is attached as Annex B to assist you in completing the application form.

The Keeper of the Register of Community Interests in Land

14. Section 36(9)(a) of the Act indicates that the Keeper of the RCIL shall be the Keeper of the Registers of Scotland. The primary function of the Keeper shall be to maintain the RCIL and to ensure that the Register is made available for public inspection at all reasonable times and free of charge. However, a charge may be made for any extracts requested from the Register. The Register can be viewed by anyone in person at the Registers of Scotland Office, at the address in Annex E, or through the RoS website at

http://rcil.ros.gov.uk/RCIL/default.asp?category=rcil&service=home

15. Section 36(2) of the Act details the information which must be held on the RCIL, and Scottish Ministers will instruct the Keeper to enter information on the RCIL at various stages in the Community Right to Buy process. Additional information may be entered onto the Register if Ministers so instruct.

Unknown or untraceable landowner or heritable creditor

16. Section 37 of the Act should be read carefully prior to completing your application form. Subsections 37(4) and (5) set out the requirements where the landowner (or creditor in a standard security over the land to be registered) is unknown or cannot be found. We expect these cases to be rare, but if you are unable to provide these details, the leaflet "Sources of Land Ownership" may be helpful. This can be obtained from the Registers of Scotland or from the Scottish Executive Land Reform Branch (See Annex E for contact details).

17. This leaflet contains helpful sources of land ownership information. If you still cannot identify the owner of the land, you must place an advert in a local newspaper whose circulation includes the area where your CB is situated and also covers the land to which your application relates. You must also affix a conspicuous notice to a part of the land you wish to register, the content of which is detailed in Schedule 2 of The Community Right to Buy (Forms) (Scotland) Regulations 2004. The notice should be placed near a path or a road if possible and you should consider whether more than one notice is required if the area of land is extensive. It is in your best interests to identify the correct owner as the right to buy cannot be "triggered" without a willing seller. Submitting an application without owner details may therefore delay the right to buy process.

Multiple registrations of land

18. Multiple registrations of land can mean two things: either a CB has registered an interest in more than one piece of land, or more than one CB has registered an interest in the same piece of land. Generally, these issues are likely to be considered as follows:

18.1 CB with multiple registered interests - Section 37(14) and (15) require a registered interest to relate to only one holding of land, therefore separate applications must be submitted where a CB wishes to register an interest in land which consists of more than one land holding. In most cases, registration of an interest in more than one piece of land will ensure that the CB has more than one opportunity to purchase a piece of land for its particular purpose. This is aimed at being helpful to both the CB and to the landowner. If a CB registers an interest in only one small area of land (which may be all that is needed), that particular piece of land may not come up for sale for some time, and registering an interest in more than one similar pieces of land would provide more opportunities. Also, if a CB registers an interest in the land it needs, the owner may be able to "lot" the land for sale in a way that is favourable to meeting the needs of the local community. Multiple registrations should therefore not be used as "blanket" registration, and a CB should demonstrate serious intent to purchase any land subject to its registration. This should be done by focussing your registration purely on land that, given the opportunity, you would want to proceed with the right to buy. It should also be noted that any attempt to "blanket" register a large piece of land where only a small piece is required will, under section 67(2), result in the CB having to buy either all or none of the registered land if the whole lot is put up for sale. This may result in your CB missing out on the piece of land it needs, or having to buy too much land at additional expense.

18.2 More than one CB with registered interest in same land - The Act does not prevent more than one CB from registering an interest in the same piece of land. In some cases, where very different purposes are intended, this is reasonable. However, if the land comes up for sale and more than one CB confirms that they wish to proceed with the right to buy, Section 55 of the Act allows Ministers to decide which one will proceed. However, there is no guarantee that either will proceed where it appears to Ministers that it might not be in the public interest to let one CB proceed over the other if this would result in, for example, a division in the local community affecting its stability. It is therefore very important that all relevant details are provided in your application.

18.3 Once Ministers have decided which CB should buy the land, the unsuccessful CB's right to buy is extinguished and its registered interest is deleted from the Register. This also applies where both a CB and a Crofting Community Body (CCB) under Part 3 of the Act seek to buy the same land. Separate guidance is available for the Crofting Community Right to Buy. Paper copies are available from Crofting Branch detailed at Annex E.

Sustainable development

19. The Scottish Executive's approach to sustainable development is set out in "Meeting the Needs...Priorities, Actions and Targets for Sustainable Development in Scotland" (available at www.sustainable.scotland.gov.uk). Sustainable development requires an integrated long-term approach to economic, social and environmental issues. The application must demonstrate the extent to which the main purpose of the CB is consistent with furthering the achievement of sustainable development. The application must also demonstrate the extent to which the proposed use, development and management of the property covered by the application would consist of or support the sustainable use or development of the land, including any salmon fishings or mineral rights which are sought for purchase under the Act.

20. As regards sustainable development, it is suggested that the best way to do this is to look at the economic, social and environmental consequences and ensure that taking the application in the round, and so far as possible, all of these are positive. As one of the policy aims of Part 2 of the Act is to permit communities greater opportunities to achieve sustainable development, the application should show how this would be an outcome of the proposed purchase. A long-term plan, for example, could usefully demonstrate how this could be achieved. This policy is intended to deliver sustainable communities and that requires recognition of housing and employment needs and access to services. So the CB should obtain advice and expertise to identify the environmental assets and heritage features of the land concerned and clearly indicate how these are to be employed, maintained or enhanced for the benefit of the community.

21. In considering sustainable development issues for an application, it may be helpful to consider the content of the Scottish Executive Sustainable Development Directorate's website. This is available at www.sustainable.scotland.gov.uk The Sustainable Development Directorate can be contacted at Area 1-H(N), Victoria Quay, Edinburgh EH6 6QQ (Tel: 0131- 244-7311). Alternatively applicants can contact the appropriate local authority's sustainable development staff who can be contacted through the Sustainable Scotland Network www.sustainable-scotland.net .

The Ministers' decision

22. Most of the criteria that Ministers need to take account of in determining an application are clearly factual, but sections 34(4), 38(1)(b)(ii) and 38(1)(e), covering registration of interest, and sections 51(3)(c) and (d) at right to buy stage, involve subjective judgements. It is likely that the owner and other interested parties will offer views on these issues. Some of these views may raise factual points but on other points Ministers may need to reach a conclusion based on the views expressed and responses offered and make a judgement on these issues on a case-by-case basis, with each decision dependent on the circumstances of each case. Nevertheless, there are points that are generally relevant to the way Ministers will decide whether these criteria are met and these are discussed below.

Furthering the achievement of sustainable development

23. Sections 34(4), 38(1)(b)(ii) and 51(3)(c) provide that Ministers must be satisfied that the registration or exercise of right to buy is consistent or compatible with "furthering the achievement of sustainable development". The information provided by the CB in the application to register an interest, or about its plans for the future development and management of the property it is seeking to acquire at right to buy stage, will be crucial to determining whether this criterion is met. This legislation is part of a programme of land reform measures intended to support, maintain and develop rural communities. So it is expected that the exercise of the community right to buy should deliver benefits to the community.

24. Development, in the wider sense, to deliver these benefits can be of an environmental, economic or social nature and would not be precluded because the gain from the development was purely economic or social. This is because the requirement of the legislation is not that every component of the development contemplated or planned should be compatible with the achievement of sustainable development but rather the application as a whole should be compatible with furthering sustainable development. However, proposals for developments that might result in lasting significant environmental damage might very well fail to meet this legislative requirement. The same could be true of plans to prevent any development or simply maintain indefinitely the status quo as these may not be construed as being compatible with furthering sustainable development. Applications stand the best chance of success if they address explicitly the likely overall impacts in terms of environmental, economic and social benefits and costs, and that the optimal overall solution has been found which does not have significant downsides on economic/social/environmental grounds.

25. A decision by Ministers in favour of a community right to buy application means that Ministers have accepted that what is proposed is compatible with furthering sustainable development. However, that does not imply that any subsequent application for planning permission will be granted. Other issues are relevant to decisions on development planning matters. These decisions will be a matter for the planning authority in the first instance. Neither should consent to a right to buy application prejudice the decision by Ministers on any planning matter which may subsequently come before them for determination.

Support for development of the community

26. Sections 38(1)(c) and 53 provide that Ministers shall not consent to an application by a CB to register an interest in or buy land unless they are satisfied that where the subjects of the application are salmon fishings or mineral rights, the CB has or is acquiring sufficient land to enable these subjects to be exploited so as to support the development of the community. There is a clear link between the amount of land to be acquired and the ability to develop a financially viable and worthwhile operation to exploit the salmon fishings or minerals. This is because these things can only be exploited on, or in the case of salmon fishings from, the land. However, the amount of land that is sufficient in any particular case will depend on what is delivered by way of revenue or other benefits.

27. Ministers will wish to see that there are plans for exploitation of the salmon fishings or minerals (but these plans will need to be compatible with furthering sustainable development - see paragraphs 19 to 21 above). It will also be necessary to demonstrate that such plans are realistic, are expected to be profitable or, failing that, will provide a real and lasting benefit to the community and that the profit or benefit will make a significant contribution to the development of the community. It may also be necessary to show that this is a new benefit. In the event that Ministers are convinced that purchase of the salmon fishings or minerals will make a significant contribution then they are likely to conclude that the amount of land acquired or being acquired is sufficient for the purposes of sections 38(1)(c) and 53.

28. If there are no plans to utilise salmon fishing or mineral rights, or these plans are unrealistic, or they convey no significant benefits to the community, Ministers may feel bound to reject the application. For example, if a CB were to apply for a right to buy mineral rights so as to prevent any exploitation of these minerals, Ministers could well reject such an application.

Public interest

29. Sections 38(1)(e) and 51(3)(d) provide that a registered interest or community right to buy may be approved only if it is in the public interest. As the public interest is not defined, Ministers must determine whether any particular proposal is in the public interest on a case-by-case basis. It is not a simple matter to determine what might be in the public interest. At the very minimum it will be necessary to demonstrate that the proposed acquisition would bring real benefits to the whole of the local community and not just to some or all of the individual members of the CB. It would also be necessary to satisfy Ministers that such benefits were not outweighed by alleged disadvantages to the wider community, the environment or the economy or were not disproportionate to the degree of harm that would be suffered by private interests as a result of the registration or exercise of the right to buy. For example, an attempt to acquire salmon fishings managed by a local angling club might be liable to fail the public interest test if the outcome of the exercise of that right to buy were to restrict access to or increase the cost of that fishing. Conversely, an application which would lead to substantial public benefits by widening access and improving management of the resource would be likely to be successful.

30. A right to buy may also be refused where there is evidence to suggest that the right to buy is likely to be used to subvert the public interest. For example, to thwart the outcome of the planning process. Indeed Ministers will consider the development plan for the area when deciding on the public interest. The planning system does not exist to protect the interests of one person, group or business from the activities of another but guides the future development and use of land in the long term public interest. It may result in decisions that some communities may dislike. However, it would not be in the public interest to allow the community right to buy to be used to subvert that process. Where land to be registered is already included in the local authority's local development plan, CBs will wish to consider discussing this with their local authority prior to submitting their application to register an interest in the land. Where registered land is included in the local plan at a later date, again CBs should consider discussing their proposals with the local authority as soon as possible and, in any event, before the landowner's notice of intention to sell, under section 48(1), is received. However, inclusion in the local plan should not, in itself, prevent the land from being registered. Conversely, a registration of interest does not guarantee that a right to buy will proceed.

31. In determining what is in the public interest, Ministers will also consider the wider public interest, which may include the interest of any sector (however small) of the public which, in the opinion of Ministers, would be affected by the exercise of the right to buy. Ministers do not, as some have suggested, see this as a measure to place the interests of the CB seeking to exercise the right to buy above the wider public interest. Rather, it is intended to protect the interests of distinct existing communities and groups other than the community the CB represents. For example, a CB may be set up to represent a group of people who may vote in a ballot in favour of exercising a right to buy. However, it could be that a large number of other residents are opposed to the right to buy. If this is made known to Ministers, they would be bound to consider how the interests of that community would be affected before reaching a decision. For example, if support for the right to buy was marginal and a potential consequence of proceeding with the right to buy was to create a divided small rural community, Ministers may decide that the adverse effect of the right to buy would outweigh the public interest in retaining a cohesive community.

32. If Ministers consider the interests of a particular sector of the public in accordance with the wider public interest and conclude that these interests are adversely affected, that does not mean that they are bound to reject the application.

1.7 Submitting your application form

33. Before submitting your application form, please read carefully this guidance and the accompanying application form guidance, which is also included in this pack. You should ensure all details are accurate and legible and that all accompanying documents are clearly labelled. Maps or drawings of the land to be registered may be used to reinforce the accuracy of the location and dimension of the land and should be submitted in the appropriate scale. Failure to do so will cause delay and may result in your application being rejected. You may also miss your opportunity to buy the land if it is then sold quickly, as the landowner is free to sell land until a prohibition notice is issued under section 37(5)(e) of the Act.

When your application is complete, and you have checked all enclosures are attached, you should send it to the Land Reform Branch at the address in Annex E.

1.8 What happens after your application to register an interest in land has been submitted

Initial checks

34. On receipt of your application in the Land Reform Branch, initial checks will be made, under section 37(11) of the Act, to ensure your application complies with the basic requirements of the Act. This is not part of the detailed consideration for registration purposes, but it may mean that your application goes no further. Initial checks will determine whether the form, maps or other supporting documents have been completed correctly, or whether it is obvious that the registration would otherwise be rejected by Ministers without detailed consideration, e.g. if the correct form has not been used, if no map is attached, if a required part of the form has not been completed, or if the land in which it is wished to register and interest is clearly excluded land. In this case, all papers will be returned to the registered office of your CB, detailing the reason(s) for this action.

35. Following successful completion of the initial checks, a copy of your application and accompanying documents will be sent to the owner of the land in which the interest is to be registered, and if appropriate, any heritable creditor, seeking their written views on your application within 21 days. A copy of the invitation seeking the owner's views will be sent simultaneously to you. It may be helpful if you have already spoken to the landowner about your proposal. You will then receive, under Section 37(9), a copy of the landowner's response to Ministers on your application and you will then have 21 days by which to submit comments. At this stage, you will also receive first notification of your RCIL registration number, which should be quoted in all future written or telephone communication concerning that case.

36. The above letter sent to the landowner under section 37(5)(e) will contain a notice prohibiting the landowner from taking any action to sell any land forming part of your application, from the date he/she receives the letter until the date when Ministers approve or refuse your application. This will be known as a temporary prohibition pending Ministers' decision. Passing the initial check above is therefore necessary to allow the prohibition to take place. Failure to do so may allow the landowner to openly market the land, and you may then be required to comply with the late registration provisions in Section 39 of the Act.

37. Section 37(17) requires Ministers to send notice of their decision on whether your application should be registered within 63 days of receipt of your initial application. This notice will also contain reasons for Ministers' decision, and will be copied to the landowner and, if appropriate, any heritable creditor. If your application is successful, the Keeper will be instructed to enter the details in the RCIL, and Section 40(1) will come into effect, prohibiting the landowner from transferring the land in which the interest has been registered. Your right to appeal to the sheriff against Ministers' decision not to approve the registration is set out at Annex C of this guidance.

38. Following action taken by Ministers under section 37(7), all information relating to the application will be made publicly available through the RCIL, except funding information specifically exempt under Section 36(3) and (4) of the Act.

1.9 Late applications

39. Section 39(1) of the Act provides timescales between which a CB's application to register an interest will be considered as a "late application". While late registrations are expected to be submitted only in exceptional circumstances, this will most commonly be after land comes onto the open market, or has otherwise been advertised for sale. You may not be aware that the landowner has taken steps to dispose of land contained in your application, but if you think section 39 applies to your application, you must complete questions 1 and 8 of Part B of the application form and Ministers must receive your application before either the date on which the missives for the sale of the land are concluded, or an option to buy the land is conferred.

40. While there is no legislative requirement to do so, it would be helpful if you could telephone the Land Reform Branch in advance of submitting a late application, as the timescales during this process are more restrictive.

41. If you are submitting a late application, particular attention should be paid to the criteria to be met in section 39(3). You must be able to demonstrate, in addition to meeting the criteria set out in section 38:

42. If you are unaware that your application will be deemed to be "late", the landowner is required under section 39(2) to inform Ministers of that fact on receipt of a copy of your application sent under section 37. You should also note that if you are applying under section 39, you will not be asked for views on comments made by the landowner. However, having submitted an application thought to be timeous, you may then be asked to provide further information to Ministers.

43. Ministers shall, within 30 days of receiving a late application, send notice to you and to the landowner/creditor of their decision on whether the application has been approved. Reasons for the decision taken by Ministers will be provided.

44. The envelope containing your late application should be sent to the address at section 1.6 above, and should be clearly marked "LATE APPLICATION". If your late application is rejected, you can still apply to register an interest in the land against the new owner, or against the present owner if the transaction underway is not concluded.

1.10 Effect of registration

45. Section 40 of the Act sets out the legislative details of the effect of a registered interest. If Ministers decide to approve the application, they will direct the Keeper to register the interest in the RCIL. For so long as the community interest in the land is registered, the owner of the land, and any creditor in a standard security having the right to sell that land, is prohibited from transferring the land, or taking any action with a view to a transfer, unless the transfer is specifically exempt under section 40(4). Further details of exempt transfers are contained at section 2.6 of the Guidance for Landowners. If section 40(4) is invoked, and a transfer is completed, your registration will remain and the prohibition on the registered land will apply to the new owner. The right to buy may then be "triggered" on the action of the new owner. If you are aware of an exempt transfer taking place, you should inform the Land Reform Branch. There is no legislative requirement to do so, but this would help to keep the details of your case up-to-date and avoid delay if an opportunity to purchase the land arises under the new owner.

46. Action with a view to a transfer, as described in section 40(1)(b) of the Act, would be action such as verbal notification to another party that the owner intends to sell the land.

47. If the land subject to your registration is transferred without your knowledge, and the landowner has breached the prohibition under sections 37(5)(e) or 40(1), you are entitled to apply to the Lands Tribunal for Scotland under section 50 of the Act within 10 years of a breach to buy the land as if the landowner was informing Ministers of the intention to sell under section 48(1) of the Act. However, all of the criteria in section 50(2) must be met and the onus is on the CB to instigate this. Where a breach has taken place, particular attention should be paid to the provisions in section 58 of the Act, as it is for your CB to ensure that the necessary paperwork effecting the transfer is prepared. If the landowner fails to assist with transferring the registered land, your CB is entitled to seek assistance from the Lands Tribunal for Scotland under section 58(5) and (6) to assist the transfer.

1.11 Renewal, deletion and re-registration of interest

48. Sections 44 to 46 of the Act cover renewal, re-registration and deletion of interest.

Renewal of interest

49. Your registered community interest will be valid for a period of 5 years from the date when Ministers approved your application. To ensure your registered interest remains, you can apply at any time from 6 months prior to the expiry date to renew your application for a further 5 years from the previous expiry date. While there is no requirement to do so, the Land Reform Branch is likely to issue a reminder that 6 months registration remains, but you should not depend on this as it is for the CB to ensure sufficient time is allowed for the renewal process to be completed.

50. We do not expect the renewal process to be burdensome, but it is important to ensure that the initial serious intent to purchase the registered land remains, and you will therefore be required to complete the "Renewal of Registration" application form. As renewal will not be required within 4 years of commencement, a form will be made available in due course. It is expected at this stage that there will be no major changes to your company's memorandum or articles of association, as these should have been approved by Ministers under section 35(1) of the Act prior to amending. To simplify this process, you should highlight any changes clearly on the renewal form. Ministers will then consider whether your application continues to meet the criteria set out in section 38 and, if content, instruct the Keeper to renew your registered interest for a further 5 years.

Deletion of interest

51. If at any time your CB decides that it wishes its registration to be deleted or to relinquish its right to buy, section 54(1) requires you to inform Ministers in writing of that fact. On receipt of this information, Ministers will direct the Keeper to delete the community interest from the Register and notify the owner of the land. Alternatively, if, under section 45 of the Act, Ministers are satisfied that the CB or its registration has changed to the extent that it would not have been approved in the first place, Ministers shall direct the Keeper to remove the registered interest, after having first sought views from both your CB and from the landowner.

52. Following any deletion of interest, the landowner is free to market the land for sale, unless another registered interest applies, for example, where there is more than one registered interest on the land or a subsequent registration is approved.

Re-registration of interest

53. Section 46 of the Act provides that a CB may register an interest in the same land at a later date if the previous registered interest expired or was deleted for any reason. However, in attempting to register an interest in the same piece of land for which a previous right to buy was refused by Ministers or not exercised by the CB, you should consider how you can demonstrate that, given the opportunity, a further registration is likely to lead to the right to buy being exercised and would be in the public interest. Where, for example, there is no apparent reason why a CB's registered interest did not proceed to the right to buy at a previous opportunity, it is likely that further questions would be raised as to the intent of the registration.

1.12 Exercising the Community Right to Buy

54. In order for a CB to exercise its right to buy land, the landowner (or heritable creditor), must first have informed Ministers and the CB, under section 48(1) of the Act, of their intention to sell registered land, as indicated in section 47(1). Ministers will then, under section 49(2), seek in writing within 7 days your confirmation that you wish to proceed to the right to buy stage. You have 30 days in which to respond to Ministers, otherwise the right to buy is extinguished under section 49(4). It is your confirmation at this point that the 6 months to raise the necessary funding and conclude the sale, under section 56(3), applies and failure to conclude within this period (or within 2 months of the determination of any appeal, or longer if agreed between you and the seller) will result in your right to buy being extinguished and your interest being removed from the Register. If you apply to Ministers to exercise your right to buy, Ministers will then appoint an independent valuer to assess the value of the land. Once the valuation price has been intimated, you cannot proceed to buy the land unless the criteria in section 51 have been met. This includes seeking the approval of the community by ballot (see section 1.14 below) and the approval of Ministers.

55. Section 47(2) confirms that only registered land may be purchased under the Act. However, as the lotting arrangements for the sale may not have been available to you before receiving notification that the owner wishes to sell the registered land, you may wish to consider whether you need to discuss the proposed sale with the owner. It may be that additional land has been included in the lot which you are not entitled to purchase under the Act, but as the owner wishes to dispose of this land also, he may consider re-lotting the land or including it as part of the sale by agreement. But you do not have any right to buy the additional land.

1.13 Valuation

56. Once you have confirmed that you wish to proceed with the right to buy, Ministers have, under section 59 of the Act, 7 days to appoint an independent valuer. The aim of the independent valuation is to ensure the owner receives a fair price, at market value, for the property. What is meant by market value is set out at section 59(6) and (7). The valuation will consist of the value of the land and any moveable property included in the sale, and a brief statement will provide reasons for the valuation figure. For example, if an apparently higher or lower figure is intimated on account of a particular feature of the property, the valuer may provide a general reason for that assessment, rather than detail the specific issues, for example relating to the condition of the property or the work required to rectify any problems. You should therefore consider whether a separate valuation is required for your own purposes. The valuer will take account of the known existence of any person who would be willing to buy the land at a price higher than others would be expected to pay. This reflects market value and ensures the land, and any moveable property included, are transferred at a fair price. It is not the purpose of the legislation to allow CBs to purchase land cheaply and at a financial loss to the seller. Where the CB is buying only part of the land to be sold, the amount of any depreciation in the remaining land included in that lot will be compensated.

57. The valuer will act on behalf of Scottish Ministers and not for any other party involved in the purchase and, under section 60(1), will seek your written views on the value of the land and any moveables prior to intimating the valuation price. The landowner will also be consulted. The valuer has 6 weeks to provide Ministers, the landowner and your CB with an assessment of the value of the land, or longer if agreed by Ministers under section 60(3).

58. Ministers will meet the costs of their appointed valuer. You may also appoint your own valuer, but these costs will not be met by Ministers.

59. An appeals procedure is available should either the landowner or the CB be unhappy with the valuation. This is detailed at Annex C. If the valuer attends an appeal hearing on behalf of Ministers, the Scottish Executive will meet the costs. However, if you invite the valuer to appear as an independent witness, any costs must be met by you.

1.14 Ballot

60. To meet the requirements of the ballot procedures, you should be familiar with sections 51(2) and 52 of the Act and with the accompanying Community Right to Buy (Ballot)(Scotland) Regulations 2004. Failure to conduct the ballot fairly and reasonably and in accordance with the regulations will result in your right to buy being extinguished.

61. Following intimation of the valuation price, your CB is required to ballot the local community in order to demonstrate the necessary support for proceeding with the right to buy at the valued price (or at the price following any appeal decision). The ballot should be conducted fairly and reasonably, with all those balloted having the opportunity for a secret ballot. It is for the CB to demonstrate to Ministers that the ballot was so conducted, and you may wish to consider appointing an independent assessor to oversee the proceedings if you consider that this will help to demonstrate the validity of the ballot. You may, for example, wish to seek assistance from your local authority Returning Officer for election purposes. This is not a legislative requirement, as to require an assessor may, in some cases, result in additional unnecessary costs being incurred, particularly in the more remote rural areas where communities are much smaller and balloting members could be more straightforward.

62. If you are aware of any objections being raised in relation to the ballot, you should, wherever possible, resolve these prior to submitting your ballot results to Ministers, as any unresolved objections are likely to be submitted to Ministers and may lead to an appeal against the conduct of the ballot. If an appeal is upheld, your right to buy could be extinguished.

63. In considering the CB's ballot arrangements, Ministers will pay particular attention to inclusivity. You should therefore ensure that all those residents entitled to vote have the opportunity to do so. For example, you should ensure that those entitled to vote includes members of the community who have requested that their names be removed from the Full Register of voters, which you can check by visiting your local Council offices or library. However, only certain people and organisations are entitled to take copies of the Full Register. The public version of the Electoral Register, known as the Edited Register, leaves out the names and addresses of all those who have asked to be excluded from that version of the register. A copy of this can be purchased by anyone, and may be a useful place to start. The Executive is presently considering ways of simplifying this process for community bodies.

64. You may also wish to consider the merits of assessing the views of any additional persons with the right to appeal. The community will be shown as giving their approval to the right to buy if Ministers are satisfied that:

65. Section 51(2)(a)(ii) allows an application to be submitted where less than half of the community have voted. This is expected to be only in exceptional circumstances. Under normal circumstances, around 26% support is the minimum required but demonstrating that, for example, 49% support from the whole community where only 49% of the community voted (i.e. 100% of those voting) clearly exceeds the minimum 26% support required. Where less than half the community voted, you should demonstrate good reason for this and, in particular, why you think it is in the public interest for the right to buy to be approved, as Ministers may consider this to be sufficient support to justify proceeding with the right to buy. Ministers will consider carefully any reasons given for the required turnout not being achieved.

66. Regulation 4 of the Community Right to Buy (Ballot)(Scotland) Regulations 2004 requires a CB to give notice of the date and place on which the ballot will be held not less than 10 days from the date on which the ballot is intimated. You should note that this is the minimum notification time required, and you should consider giving as much notice as possible in order to ensure the ballot is seen to be conducted fairly. Such consideration should apply equally to Regulation 5 of the Order, relating to the 10 days required for returning ballot papers when a postal ballot is being conducted.

67. The ballot procedures require you to inform Ministers of the ballot results (the number of persons eligible to vote, the number who voted and the number of votes in favour of the proposition) within 28 days from either the valuer's intimation of the price of the land, or from the decision of any valuation appeal.

68. Under sections 51(5) and (6), Ministers have 21 days from receiving notification of the ballot result in which to send notification of their decision as to consent to the landowner and the CB. Ministers shall also direct the Keeper to enter a record of the decision in the RCIL. Where two or more CBs have confirmed that they will exercise their right to buy the land, Ministers have up to 21 days following receipt of such notification in respect of the last of the ballots conducted by those bodies.

1.15 Funding

69. The Act makes no specific reference to the funding of community purchases of land. It is for CBs themselves to determine where the funding to support the purchase comes from. Annex E contains details of various sources where applications for funding in rural areas can be considered. You should contact the funding agents direct for any advice on funding your community purchase.

1.16 After purchase

What happens next?

70. The whole purpose of the Community Right to Buy is to provide opportunities for rural communities throughout Scotland to secure their future through the purchase and subsequent sustainable development of land. Although the CB has succeeded in purchasing the land, this is not the end of the Act's role in advancing the interests of the community.

71. The Act seeks to ensure that the purchased land will remain a resource whose benefits accrue to the community as a whole. Failure to ensure such action will be seen as the CB functioning outwith its agreed memorandum and articles of association. This may result in the same action as in paragraph 69 below.

The community body

72. Section 34 of the Act requires that the CB must be a company limited by guarantee whose surplus funds are applied for the benefit of the community and that, were the CB to be wound up, a successor body would require the approval of Scottish Ministers.

73. Section 35(1) requires that a CB may not amend its memorandum or articles of association without the consent of Ministers. Where Ministers believe that a body, having succeeded in an application to purchase would no longer qualify as a CB, they may then compulsorily acquire the land purchased by that body under the legislation.

74. The implications of these sections are clear. A CB, or any succeeding body, must continue to observe the requirements of the Act in relation to any land bought under these provisions, e.g. any surplus funds which the CB or successor may enjoy may only be applied to subjects which benefit the whole of the community, and there is therefore no scope for treating any surplus as a dividend to be shared out amongst individuals.

If winding-up becomes necessary

75. Section 34(1)(h) and (7) refer to the winding up of the CB company. A CB is similar to any other company being would up in that its surplus assets, including the land and associated sporting or mineral interests, etc. shall contribute towards satisfying any liabilities the CB may leave behind. Furthermore, section 34(1)(h) provides that any surplus assets not absorbed by liabilities must be transferred to another approved community or crofting CB, or if no such body exists, either to Ministers or to a charity as Ministers may direct.

76. Section 34(7) allows a CB to provide in its memorandum and articles of association that any surplus assets may only be directed to a charity. This is because, to enable a CB to have charitable status, any surplus assets following wind-up must be directed to a similar registered charitable body.

1.17 Conclusion

77. This guidance demonstrates that community purchase of land under Part 2 of the Act is no easy option, and requires both commitment and patience. You may therefore wish to consider buying the land by agreement, without the use of the legislation, and the key to this is communication. But you should note the introduction to this guidance before making any decision. The assistance of a solicitor is recommended at an early stage in proceedings.

78.Annex E provides useful contacts to help you along the way, and following your purchase of land. While the Land Reform Branch cannot provide legal advice, and it must remain objective at all times as our main role is to provide advice to Ministers at various stages of the right to buy process and on a case-by-case basis, we are here to help you with any queries you have regarding the right to buy process.

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