Draft Crofting Reform (Scotland) Bill 2009

The Draft Crofting Reform (Scotland) Bill (DCRB) was published on 19 May 2009, almost a year to the day after the Final Report of the Committee of Inquiry on Crofting (CoIoC) was published (12 May 2008). The consultation period for the draft bill ended on the Glorious Twelfth, following a summer of considerable discontent, and the government has, in the last few weeks, made its first concession.

Michael Russell, Minister for the Environment at the time the Government issued its initial response to the Shucksmith Report, noted in his foreword to that document that the world operated very differently in 1886 to the way that it does in the 21st century. The new circumstances in which we live, together with the various legislative changes which have occurred over the years have (Mr Russell wrote) caused increased speculation on croft land and croft tenancies.

Amongst the legislation which shaped the current crofting system was the 1976 Crofting Reform (Scotland) Act 1976. That Act is perhaps best known for introducing a crofter’s right to negotiate with his landlord to obtain a title deed to his croft, and to apply to the Scottish Land Court if those negotiations fail. The 1976 Act almost certainly championed the rights of the individual crofter, and the Government’s response to the Shucksmith Report made it clear that the vexing question of how to balance those rights against the rights of the crofting system itself, and the wider crofting community, would be addressed by any subsequent legislation.

The Draft Bill

Governance (Part 2)

The DCRB proposes that the Crofters Commission be “radically reformed and reconstituted” but not, as recommended by the Shucksmith Report, wound up. The various functions currently carried out by the Commission, namely (1) crofting regulation and enforcement, (2) development of crofting, and (3) maintenance of the Crofting Register, are to be separated, with the Commission retaining control of and responsibility for only the first of these functions. The Registers of Scotland will control the Register of Crofts (or, in its proposed new form, the Crofting Register) and Highlands and Islands Enterprise will acquire responsibility for the development of crofting.

It is proposed that the Commission will remain a Non Departmental Public Body (NDPB), but its regulatory decisions will be taken by Area Committees. These Area Committees, of which there will be six¹, will each be comprised of twelve² members. Decisions of the Area Committees could be reviewed by the Crofters Commission (Crofting Commission under new proposals), and the Crofters Commission could charge fees for all regulatory applications.

Of all the proposals contained in Part 2 of the DCRB, the proposed Area Committees seem to have caused the most widespread alarm amongst crofters, caused in large part by the perception that neighbours and peers will be taking decisions which are currently the responsibility of the Crofters Commission in Inverness. Among the dissenting voices was that of the Scottish Crofting Foundation (SCF) and the Scottish Rural Property and Business Association (SRPBA), whose joint consultation response (or perhaps merely the concept of such a venture) must have caused many a few raised eyebrows.

Whilst the ColoC noted that there was a desire amongst crofters to have more localised decision making, it is clear that crofters are not satisfied with the current proposal.

Speaking at the Scottish Crofting Foundation’s Annual Gathering in Grantown on Spey last month³, the Minister noted that the analysis carried out thus far of consultation responses had indicated that whilst the consensus was in favour of reform of the Crofters Commission, there was no supportive consensus on the proposed Area Committees.

Crofting Register (Part 3)

The DCRB proposes that a new register of crofting interests be established, operated by the Registers of Scotland. The current Register of Crofts, currently maintained by the Crofters Commission, is far from accurate and, whilst it is a useful tool for the Commission and the various parties who seek to find information on a particular croft, it cannot be relied upon.

The proposed map based Crofting Register, to be operated by the Registers of Scotland, is intended to be a source of accurate and up to date information on crofts which will assist effective regulation.

‘First registration’ of a croft or common grazing (a prospect sure to fill any crofting lawyer with trepidation) will be triggered by most regulatory procedures⁴ or can be applied for voluntarily. Once the application has been lodged and checked, a provisional entry will be made in the Register, and the landlord of the croft and neighbouring crofters will be notified of the application.

There would follow a six month period during which the provisional entry could be appealed; failing any successful appeal, the provisional entry would become permanent. It is understood that there is no provision for rectification of the Register thereafter.

The Scottish Rural Property and Business Association (SRPBA), for its part, is alarmed by the fact that when a crofting estate (or indeed part-crofting estate) is sold or ownership is otherwise transferred, all of the crofts forming part of that estate will require to be registered on the Crofting Register. Quite apart from the logistical difficulties inherent in such an operation, the SRPBA has protested that such a requirement will make the purchase of such estates unattractive to prospective purchasers.

The proposed Crofting Register has otherwise received a slightly warmer response than some other parts of the draft bill, but many crofters have voiced concern at the proposed £250 fee for registering a croft, and solicitors have pressed the Government for further information on the potential for amending information once a provisional entry has been made permanent. The multitude of potential boundary disputes - and more particularly the costs of settling these in the Scottish Land Court - has been a source of concern to some, although the clarity and certainty provided by a map based register is, for others, a long awaited necessity.

Support for Crofter Housing (Part 4)

One of the more radical proposals in the DCRB is the concept of using a croft tenancy as security for a mortgage. The rationale for this provision was that the Government believes crofters ought to be able to obtain a commercial mortgage without either purchasing or decrofting any part of their croft. Currently, it is necessary take both steps to remove land from the scope of crofting legislation before a mortgage can be obtained.

It is proposed that a crofter’s rights and responsibilities will be “modified” when a security is granted. These modifications include obtaining the consent of the creditor before enlarging, assigning or dividing a croft, and when renouncing a tenancy. Any notice made to a crofter by a landlord in respect of a breach of statutory conditions must also be copied to the creditor. By the same token, the Commission must notify a creditor if a notice is served by any other party in respect of such a breach.

If a security is called up, a creditor would have three options, namely:- (1) assignation or sale, (2) entering in to possession, and (3) decree of foreclosure. The statutory requirements of a “crofter” would have to be significantly altered to enable the creditor to call up the security, including the requirements to cultivate the croft, to reside on or near the croft, and to purchase the croft.

These proposals have received little support. The Minister has recognised that in her comment that “no demand” for securities has been expressed in the consultation responses. The legal profession have warned that the concept has not been adequately investigated, and serious doubts have been voiced that sufficient consultation has taken place with financial institutions to ensure that lenders would be willing to entertain the currently unthinkable notion of using croft land as security. A particular concern has been identified that Part 5 of the DCRB would decrease the value of croft land and croft tenancies to such an extent that a croft may no longer have sufficient value to be of interest to commercial lenders.

Occupancy Requirement (Part 5)

Part 5 is the only part of the DCRB to have already been dropped by the Government, due to the opposition demonstrated throughout the consultation period and beyond. Any explanation of its provisions, therefore, is largely academic, and this summary is therefore provided simply for the sake of completeness.

The Part V provisions were intended to address speculation on the development value of croft land, and absenteeism when decrofted land is used for holiday or second homes. While the measures proposed by Part 5 have been received coldly enough by crofters, the CoIoC in fact recommended even stricter measures.

It was proposed that an occupancy requirement would attach to all land decrofted since 12 May, 2008, and would require any house built on such land to be used “as a main residence” by either owner or tenant.

To qualify as a main residence, a house would have to be occupied by the same individual for a minimum of 183 days per year, and this would be enforced by the relevant local authority, rather than the Crofters Commission. Exceptions to the time limit would be available for various purposes including off-shore or military employment, full-time education, hospital stays, or prison. The local authority would also have the ability to suspend the occupancy requirement on application from the owner (or, presumably, the tenant), and to reinstate it thereafter.

As has been noted, the Government’s proposal received almost universal criticism and has now been abandoned. The Minister has indicated, however, that alternatives are currently being investigated.

Crofting Regulation (Part 6)

These proposals concern absentee procedures and the use of croft land, and the intention is that they will give the Crofters Commission increased powers to take more effective action to address problems in those areas.

A “robust” definition of “owner occupier” is proposed, to distinguish between a landowner who does not occupy his croft and an owner occupier. At the moment, the legislation revolves around the original definition of a crofter as a tenant of a croft, making an owner occupier the landlord of a vacant croft, with all that entails, such as being required to submit proposals to the Commission for letting the tenancy of that croft, albeit the Commission’s long-standing policy has been to ignore this requirement under certain circumstances.

Other areas in which owner occupiers are currently treated differently by the legislation would, it is proposed, also be addressed. These would include a requirement to apply to the Commission for consent to divide an owner occupied croft.

In addition to owner occupier provisions, the DCRB proposes to tighten regulation of absentee crofters by requiring the Commission to address absenteeism unless there is good reason not to. Such good reason would be established if an absentee crofter successfully applied to the Commission for “approval to be absent”. In addition, it is proposed that family assignation procedures should be reviewed more carefully to ensure that the proposed assignee does not fall foul of the absentee provisions.

Finally, Part 6 proposes to equip the Commission with increased power to address situations in which land is not being cultivated or put to a purposeful use.

Conclusion

At the SCF’s Annual Gathering a few weeks ago, the Minister stated in her address that the Government would not be proceeding with the proposals contained in Part 5 of the DCRB. Whether Ms Cunningham realised that this had been reported two weeks beforehand by The Press and Journal is not clear:-

“The Government has listened to the response to the consultation on the draft bill and acknowledges that the proposal for an occupancy requirement on houses built on land taken out of crofting tenure was not a popular suggestion on how to deal with the issue of speculation on croft land.”⁵

Whilst consultation responses are being analysed, alternatives considered, and the level of consensus (or lack thereof) appraised, the wait continues to find out where this government will take crofting. It is a consideration, to be sure, that some sort of cross-party consensus within Parliament will be necessary before any bill is passed as law. 
 

^{1 Orkney and Shetland, Western Isles, Northern Highlands, Southern Highlands, Skye, Lochalsh and Lochaber, Argyll, and Bute, Arran and Cumbrae.}

^{2 Seven elected crofters, two nominated by relevant local authorities, three members appointed by Board of Crofters Commission.}

^{3 28-30 September 2009}

^{4 Creation of a new croft, enlargement of a croft, exchange, assignation, division, bequest, change of ownership, resumption or decrofting, reversion of resumed land, vacancy, reorganisation schemes, registration of an interest in a croft tenancy, registration of owner occupiers.}

^{5 12 September 2009}