A future for crofting

The Crofting Reform (Scotland) Bill, passed by the Scottish Parliament on 1 July, is of much relevance to any practitioner providing crofting clients with legal advice.

Unlike the Crofting Reform (Scotland) Act 2007, it will introduce important changes to crofting law which will be felt for many generations. It will make substantial amendments to the Crofting (Scotland) Act 1993 and must be read in conjunction with that Act. At the time of writing it awaits Royal Assent, and it may well be several years before some parts come into force.

Following on the Shucksmith Report of 2008, the bill seeks to protect the unique status of crofting tenure through greater regulation of croft land. The Crofters Commission is to be renamed the Crofting Commission to reflect its enhanced administrative and regulatory functions.

The Crofting Register

Part 2 of the bill establishes a new Crofting Register, which will be maintained by the Keeper of the Registers. There are obvious parallels with the Land Register. The register will be strictly based on the OS map and will, in limited circumstances, provide a public indemnity in respect of loss sustained due to a mistake by the Keeper.

The new register will mark a profound conceptual shift in perception of croft land. Any practitioner who advises on crofting law will be aware of the frequency with which croft boundaries are uncertain and disputed. The Keeper will not accept an application for registration of a croft if it is not sufficiently described to enable it to be identified by reference to the ordnance map. The Commission will be required to notify interested parties, including the crofter and neighbouring crofter(s), landlord(s) or owner(s), of any first registration of croft land, and advise of the right to challenge the registration by application to the Land Court.

Virtually all conveyances and transactions involving croft land, whether by tenants, owner-occupiers or landlords, will induce first registration. Despite the costs involved, it is likely that the Land Court will see a large increase in applications challenging such first registrations.

Residency and neglect provisions

Under Part 3, the Commission will be given more substantial powers of enforcement in respect of the absence of the crofter and the neglect and misuse of croft land. Croft tenants, and those who have purchased their crofts, will be under a duty (i) to be resident within 32 kilometres of the croft, (ii) to cultivate the croft or put it to a purposeful use, and (iii) to ensure they do not misuse or neglect their croft.

Parts 2 and 3 apply equally to croft tenants and owner-occupiers. There is a clear intention in the bill to address the somewhat anomalous position of owner-occupier crofters and bring them clearly within the new regime. Owner-occupiers will be entitled, with the Commission’s consent, to grant a sui generis “short lease” of 10 years, which may assist some owner-occupiers in complying with the new duties.

The ultimate sanction for non-compliance is termination of the tenancy, or the re-letting procedure for owner-occupiers.

Further amendments

Important changes are made to the 1993 Act which may have the effect of slightly reducing speculation in croft land. The crofter’s ability to nominate a disponee will be limited to his own family. Until now, croft tenants have been able to sell plots on their crofts to a third party on payment of a nominal sum to the landlord. The bill will prevent sales of croft land without the crofter making a clawback payment to the landlord.

Until now, a landlord has been able to insist on the grant of a standard security in respect of the clawback payment, which subsists for five years. This period is to be extended to 10 years.

The result of these changes is likely to be that crofters (or more likely their advisers) will question the amount of any payment the landlord is entitled to receive on the sale of croft land within the 10 year period.

It is often assumed that this payment is 50% of the profit (the difference between the sale price and the original discounted purchase price), but this assumption is sometimes based on a confusion between the “development value” of land which is resumed from crofting tenure by order of the Land Court, and clawback payments.

In a potentially important change to the law of succession, it will now be possible to bequeath a croft tenancy to two or more natural persons, provided that the legatee (i) gives notice of the bequest to the landlord, and (ii) sends a copy to the Commission.The executor must obtain the Commission’s consent to divide the croft.

It is hoped that the greater flexibility provided by the bill will enable the deceased crofter’s wishes to be implemented in cases where the bequest would otherwise fall into intestacy.

• David Findlay, Macleod & MacCallum, Inverness