All change on the croft

Practitioners should be aware of two important parts of the Crofting Reform (Scotland) Act 2010 that come into force on 1 July 2011 by virtue of the Crofting Reform (Scotland) Act 2010 (Commencement, Saving and Transitory Provisions) Order 2010 (SSI 2010/437).

Limitation on crofter’s ability to nominate disponee

Section 13 of the Crofters (Scotland) Act 1993 is amended so that for the purposes of acquisition of croft land, “only a member of the crofter’s family may be the crofter’s nominee”. By introducing this provision (s 40 of the 2010 Act), Roseanna Cunningham, whilst Environment Minister, closed the loophole she opened as an advocate representing the successful party in Whitbread v MacDonald 1992 SLT 1144.

As a result of that case, it was arguable that a crofting tenant could purchase their croft at 15 times the rent and nominate anyone they pleased to take title (often someone that had paid them considerably more for the pleasure).

However, it was far from clear that Whitbread v MacDonald was decided correctly in the first place. It has been suggested that a court might now take a different viewpoint in light of Pepper (Inspector of Taxes) v Hart [1992] UKHL 3; [1993] AC 593, which was a decision of the House of Lords after the Whitbread decision. Pepper v Hart now allows courts to look at extraneous parliamentary materials as an aid to interpretation of legislation. Reference to Hansard would suggest that it was not the intention of Parliament to allow this loophole.

It should be noted that article 5(1) of the commencement order provides that the commencement of this provision does not affect any application which has been made to the Scottish Land Court prior to 1 July 2011 by a crofter for an order authorising them to acquire the croft tenanted by them.

Extension of clawback period on disposal of croft land

The five-year “clawback” provision in s 14(3) of the 1993 Act is extended to 10 years by s 41 of the 2010 Act. This means that if an owner/occupier sells a croft or part thereof within 10 years of the date of purchase as a tenant, they will have to pay to the landlord a sum amounting to one half of the difference between the market value of the land and the consideration paid.

Article 5(2) of the commencement order provides, however, that the commencement of the relevant section of the Act does not affect croft land which has been acquired pursuant to an order of the Scottish Land Court under s 13(1) of the 1993 Act which was made prior to 1 July 2011.