Part 3 of the Land Reform (Scotland) Act 2003 creates circumstances in which a crofting community body may be permitted to acquire croft land associated with that crofting community. The purpose being that land ownership can help deliver a range of economic, social and environmental benefits and thereby help sustain rural communities.

However, it has become apparent that some owners of crofting estates have leased the land asset to one or more third parties. This third party could be a windfarm operator, a company controlled by the estate owner or both.

As there is doubt regarding the status of these leases and the effect they would have on an incoming community landowner, HIE commissioned a legal opinion on the matter from Roderick Paisley, Professor of Commercial Property Law at Aberdeen University. This opinion is published here in downloadable pdf and MS Word formats.

It is important to recognise that a legal opinion is just that – an opinion – and so is not conclusive. Only the courts can make a decision regarding the competency of such leases.

At this stage it might be helpful to outline the potential consequences if the leases are i) competent, and ii) incompetent:

Competent

If the leases are competent and are not rescinded (withdrawn by the estate) they would have to be honoured by an incoming community landowner. This would be the case if the land is purchased via the provisions of the Land Reform Act or by a negotiated sale i.e. where the estate is a willing seller. The community would own the land but it would be controlled by the lease holder. It is most likely that the lease holder would become the crofting landlord in this situation. There is arguably little public benefit in community ownership of land that is leased to a third party. The principle purpose of owning the land – to enable it to be managed and developed for community benefit – would be frustrated by the lease.

Incompetent

If the leases are incompetent they would fall. Thus an incoming community landowner would acquire ownership of the land subject only to the interests of the tenant crofters.

Conclusion

It is not possible to ascertain whether the leases are competent without referring the matter to the courts. It could take a long time for the courts to make a decision on the matter. If the leases are competent there could be scope, through the terms of a negotiated purchase, for a lease between the estate owner and the estate owner’s company to be rescinded.

HIE commissioned the legal opinion to distil the key issue in order to focus the debate. This issue of leases over croft land is extremely complex and involves three separate statutory provisions, namely:

• Land Tenure Reform (Scotland) Act 1974
• Crofters (Scotland) Act 1993
• Land Reform (Scotland) Act 2003

HIE is hopeful that the opinion will serve to facilitate further discussion with the Scottish Executive and relevant agencies on this important matter.