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Crofting Law...
We have significant experience in dealing with a range of crofting issues including the assignation or purchase of crofts and applications to the Scottish Land Court.
Confusion often arises between the legal significance of owning a croft and being a croft tenant. Ownership of croft land is entirely different from being a croft tenant. It is important that anyone who is looking to become either the owner of the croft or a croft tenant obtains legal advice and becomes fully aware of the law governing the use and transfer of crofts.
Crofting legislation in Scotland affects crofts contained within certain specified “crofting counties”. This means the former counties of Argyll, Caithness, Inverness, Orkney, Ross and Cromarty, Sutherland and Zetland.
The principal bodies involved with crofting are (i) The Crofters Commission, (ii) The Scottish Land Court and (iii) The Secretary of State by way of the Scottish Executive Rural Affairs Department (SERAD).
The Crofters Commission has a duty to keep under general review all matters relating to crofts and crofting conditions and to make such recommendations in relation to crofting as they think fit. The Land Court has general powers to determine any disputes of fact or law arising under the crofting legislation. The Commission also has a duty to advise the Secretary of State on any crofting matters which he may refer to them or on which they think fit to advise him.
Crofting law is somewhat complex and we have Solicitors who have extensive experience in dealing with the purchase of crofts and the transfer of croft tenancies who can advise and assist any prospective purchaser or tenant.
Different legal considerations apply depending on whether you intend to buy a croft as a croft tenant or alternatively as the purchaser of a vacant (untenanted) croft. For example, you should be aware that croft land is still controlled by crofting law even after you have bought the croft land. Some of these important considerations are examined below but more detailed advice should be obtained from your Solicitor before any purchase is completed.
Croft Tenant
When dealing with the purchase of a croft by current crofting tenants it is useful to distinguish between the tenant’s right to buy a croft house site/garden ground and the right to buy the croft land.
If you are buying your croft house site and garden ground this means you are the existing croft tenant. As the croft tenant you normally have an absolute right to buy your croft house site and garden ground.
An area of between 0.1 and 0.2 hectares is usually considered appropriate by the Crofters Commission for a house site and garden ground. Initially, a tenant should approach the landlord and discuss the terms of sale and agree how much garden ground is to be included and also the price.
If the tenant cannot agree matters with the landlord it is open to the tenant to make an application to the Scottish Land Court who, in some circumstances, can order the landlord to convey the site to the existing tenant. In effect, this means that ownership of the site is transferred to the crofting tenant, or the person nominated by the tenant. The Land Court will also set out the conditions relating to the sale. For example, it is usually necessary for the tenant to pay any legal costs incurred by the landlord in connection with the sale.
The sale price of the site is usually a nominal figure but if the landlord built the house or has provided any fixed equipment, the tenant may also have to pay an additional price based on a proportion of the value of the landlord’s contribution.
After you have become the owner of the croft house site you are usually eligible to apply for grant and loan under the Crofter Building Grants and Loan Scheme for up to seven years after you have bought the house site. This particular scheme offers assistance with the costs of improvement or replacement of the croft house and also services such as water, electricity or gas. It is important that the owner of the croft continues to work the croft and use the house as his or her main residence in order to qualify under the Scheme. More information is available from SERAD.
An existing croft tenant also has the right to approach his landlord to buy the croft land. In addition, the croft tenant may be entitled to buy the apportionment in the common grazings if it adjoins, or is contiguous to the croft.
If the landlord refuses or if terms cannot be agreed regarding the purchase of the croft land, the croft tenant may be entitled to apply to the Scottish Land Court for an Order requiring at landlord to sell the croft land. The Order by the Court will set out the conditions of the sale and normally the price is fixed at 15 times the annual rent of the croft land, or a proportion of that if the tenant is only buying part of the croft. The landlord can ask the court to fix what is referred to as “a fair rent” if it has been more than seven years since the rent was last reviewed. The new level of rent would still apply if the tenant decided not to buy the croft, even if the rent had been fixed (or agreed) during the previous seven years.
What options are open to the Land Court? Under certain circumstances, the Court can refuse to grant the application. For example, if this would cause the landlord substantial hardship.
If the landlord is the National Trust for Scotland certain special considerations apply and these should be discussed with your Solicitor.
It is important to be aware that once the tenant has bought the croft land he or she can sell it to anyone but if the tenant sells to someone who is not a member of his family within a period of 5 years, the landlord may be entitled to some of the profit which is made on the sale. This is normally one half of the difference between the original price when the croft was bought, and the later sale price. This does not apply to any garden ground bought with the original croft house.
Once you buy your croft land, you are no longer the tenant and you are deemed to be the landlord. The Crofters Commission have the power to insist that the tenancy is re-let to another crofter but the Crofters Commission do not normally insist on the re-let as long as you, or a member of your family, are living on the croft and working it.
As the owner of the croft land you are entitled to make a claim for an agricultural grant and more information can be obtained from SERAD in Inverness.
Purchase of untenanted croft
As with the purchase of a croft by an existing croft tenant, it is important to distinguish between the purchase of a croft house and the purchase of croft land when dealing with the purchase of all, or part, of an untenanted croft.
It is important to know that if you buy croft land on the open market you must, by law, inform the Crofters Commission about the purchase within one month.
Purchase of croft house
When buying a croft house on its own without the croft land, it is imperative that the incoming purchaser makes sure that the existing owner has decrofted the house site and garden ground otherwise it will almost certainly be impossible to obtain a mortgage from a bank or building society to assist with the purchase.
Any offer submitted for the house site and garden ground would be conditional on the seller delivering a document called a Decrofting Direction which will normally have a plan attached showing the area which has been decrofted.
It is quite common to buy the croft house site on its own with the remaining croft land remaining as part of a croft tenancy. It is possible for the croft tenant to retain the tenancy of the croft land and sell on the croft house site once the site has been decrofted. If you buy the croft house site you will not have an automatic right to the tenancy of the attached croft land.
The situation becomes more complicated if the existing tenant wishes you to take over the croft tenancy at the same time as you buy the croft house site. In order to take over the tenancy of the croft land you must obtain the agreement of the Crofters Commission before the transfer can proceed. Such a transfer is normally known as an “assignation” of the croft tenancy. In the event that you are a member of the crofter’s family, the existing tenant only requires the consent of the landlord to allow the tenancy to be transferred to you.
Purchase of croft land
Croft land is often sold on the open market. A crofter who has purchased the croft land is entitled to sell it on the open market to anyone he chooses. The agreement of the Crofters Commission is not required.
As stated previously, once you buy croft land, you then become the landlord. Technically, the croft tenancy then becomes vacant and the Crofters Commission has the power to insist that the vacant croft land is let to a suitable crofting tenant. The Crofters Commission is entitled to insist that the croft is re-let if there is no-one living on or working the croft. The Crofters Commission tries to make sure that vacant or unoccupied croft land is made available to local people in order to maintain the local community.
It is very important to be aware that, if you re-let your croft after you have completed the purchase, the new tenant will have all the rights available under the crofting laws. This may well include the right to buy the croft from.
Common Grazings
It is important not to forget about the common grazings shares which may be available when you take over the tenancy of a croft. It is important that the existing tenant of the common grazings shares applies to the Crofters Commission for approval before these shares are transferred to the incoming purchaser. Different considerations apply if the incoming purchaser is a member of the existing tenant’s family.
Decrofting:
a) Croft House Site - A crofter who has purchased his croft house site and garden ground, or any individual who has succeeded to the ownership of the site and garden ground, can apply to the Crofters Commission for a Direction that the site and garden ground be decrofted. The Commission are bound to grant a Decrofting Direction if the Commission are satisfied that the extent of the garden ground is reasonable. One the Direction is granted the land ceases to be croft land.
A crofter who is proposing to buy his croft house site may apply for a Direction before proceeding with the purchase. In these circumstances, the Commission normally provide that the Direction will not take effect until the Crofter has acquired ownership of the site subject to the purchase proceeding with five years of the date of the Direction.
(b) Croft Land - The owner of croft land, or anyone who has succeeded to the ownership by inheritance, is entitled to apply to the Crofters Commission for a Decrofting Direction that the land, or part of it, be decrofted. When such an application is made, the Commission has discretion whether to grant or refuse a Direction. This is different from an application for the decrofting of a croft house site.
Once an application is made to the Commission to decroft croft land, the Commission is required by law to advertise the application in the local newspapers.
When dealing with such an application, the Commission must take into account the general interest of the local crofting community and demand, if any, for a tenancy of the croft from persons who may be regarded as suitable tenants if the croft were to be offered for let on the open market.
The crofting legislation lays down the basis upon which the Commission grants Decrofting Directions in respect of croft land and legal advice should be sought when considering such an application.
If the Commission refuses to grant a Decrofting Direction for either a croft house site or croft land, the applicant has the right to appeal to the Scottish Land Court within a specified timelimit. Again, legal advice should be sought in this matter.
Finally, the most common misconception appears to be that if you buy your croft it is no longer affected by the restrictions contained in the crofting legislation. This is not the case. Even if you buy all or part of your croft, the land remains subject to crofting legislation unless you decroft it.
Wills for Crofters
If you are a crofting tenant it is imperative that you specify in your Will the person to whom you wish to leave the tenancy. The wording contained in the Will is very important. If the Will is not worded properly, the croft tenancy may not go to the intended beneficiary and a variety of legal problems may result causing unnecessary anxiety and additional expense for members of your family. This may also apply to common grazings share even if the rest of the croft has been purchased. We can offer guidance and assistance in the preparation of Wills to regulate the rights of succession to the croft of any part of it.
