Community right to buy (Part 2)
A Community Right to Buy is a pre-emptive right that allows communities across Scotland to apply to register a community interest in land or buildings, and to be given the right of first refusal should the landowner decide to put the land up for sale.
It provides communities, who have identified a need within their community for an area of land or a building and have successfully registered an interest on that land or building, with the first option to buy that asset.
It does not prevent the current landowner from exercising any of their rights over that land, including the right to develop or lease their land or building, or to obtain planning permission.
An application to register a community interest in land must show sustainable development benefits for the land and for the community. It is not intended to preserve the status quo.
The Community Right to Buy was introduced under Part 2 of the Land Reform (Scotland) Act 2003 and is colloquially known as “the Part 2 Right to Buy”.
The following guidance has been produced to guide communities through the process of forming an eligible community body, applying to register a community interest in land and exercising the Right to Buy.
Prerequisite: forming an eligible community body
Before you can submit an application for a Community Right to Buy, you must form an eligible community body and receive a letter from Scottish Ministers confirming that the community body’s governing document is compliant with all of the relevant provisions of the Land Reform (Scotland) Act 2003.
The types of community body eligible under the Act, and the process for obtaining a compliance letter from Scottish Ministers, are outlined below:
- Company Limited by Guarantee (CLBG): model template and guidance
- Scottish Charitable Incorporated Organisation (SCIO): model template and guidance
- Community Benefit Society (Bencom)
The Scottish Government has produced a model template governing document for both a CLBG and SCIO and these documents can be accessed on the links above.
Please note that community councils and community interest companies are not eligible community bodies under the Act.
On completion of the model template form, a community body must send its governing document to the firstname.lastname@example.org mailbox. A review of the governing document will then be undertaken. This process may take four to six weeks to complete. This process also applies to already established companies, charities and community benefit societies.
Once the Scottish Government has completed its review and the governing document is deemed compliant, the community body will then be asked to register its compliant governing document with the relevant regulator.
Community area: defining the community
A community is defined geographically under the Act and must consist of one or more of the following prescribed types of area:
- postcode unit(s)
- postcode sector(s)
- postcode district(s)
- electoral ward(s)
- community council area(s)
- locality or localities
The community mapping tool has been created to assist communities with the identification of prescribed area boundaries:
Applying to register a community interest in land
The Scottish Government has produced the following guidance on the Community Right to Buy process, which is essential reading for any community body wishing to submit an application:
A compliant community body wishing to apply to register a community interest in land is required to complete a community right to buy application form and demonstrate a level of community support alongside its application:
The completed application form, including maps, a petition showing community support and supporting documentation, should be emailed to the email@example.com mailbox.
It is recommended that you first submit a full draft application. The Community Land Team will then assess the application form for any compliance issues, i.e. mandatory criteria which must be met before Scottish Ministers can consider your application. Please note that Scottish Ministers will not take any sort of decision on an application until the final, signed and dated version is received in full.
After a final, complete application form and accompanying documents have been submitted to Scottish Ministers, they will be sent to the landowner and any heritable creditor for their comments.
A temporary prohibition is placed on the landowner and, where relevant, the heritable creditor preventing them from taking steps to transfer or dispose of the land. Ministers will consider all comments received when deciding whether to approve or reject the application.
A successfully registered community interest in land will remain in place for five years. During this period, the owner of the land is prohibited from transferring the land for value. The landowner can develop or lease the land during the five-year period.
A registered interest can be renewed by the community body for a further five years in the six months preceding the expiry of its existing registration. A re-registration application must be completed alongside a new petition demonstrating community support:
- Community Right to Buy: re-registration application form
- Community Right to Buy: re-registration petition template
Exercising the Right to Buy: the right of first refusal
When a landowner decides to transfer the registered land, they must notify Scottish Ministers and the community body that they propose to dispose of the land by completing and sending a schedule 6 form:
This notification “triggers” the Right to Buy and the community body is given the opportunity to purchase the land. This is known as the “Right to Buy stage” and forms the second part of the Community Right to Buy process.
Scottish Ministers will write to the community body to request confirmation that it wishes to proceed with the purchase. The community body will have 30 days to confirm its intentions.
Where a “late” application is approved by Scottish Ministers, the landowner is deemed to have already given notice of the proposed transfer, meaning the Right to Buy is activated from the date on which Scottish Ministers approved the application. Information on “late” applications is provided within the Community Right to Buy: guidance book, which must be read prior to submitting an application.
If the community body declines to proceed with the purchase, its registered interest over that land will be deleted.
Valuation of the land
When a community body confirms it wishes to proceed with exercising its Right to Buy, Scottish Ministers will appoint an independent valuer to conduct a full market valuation of the land.
The valuer will contact the community body and landowner to request any views they may have on the value on the land. The valuer has eight weeks to produce their report and the price to be paid by the community body will be one of the following:
- the amount agreed between the two parties
- if no agreement is reached, the market value of the land as assessed by the valuer
- if the valuation is appealed, an amount to be determined by the Lands Tribunal for Scotland
Ballot of the community
Following the valuation, Scottish Ministers will appoint an independent ballotter to conduct a ballot of all eligible voters within the community body’s defined community.
Once a ballotter has been appointed, the community body must complete a Schedule 10 form providing all relevant information to the ballotter:
The results of the ballot will normally be returned to Scottish Ministers within 12 weeks of the appointment of the valuer. Scottish Ministers have 21 days from receipt of the ballot result to make their decision on whether the community body can proceed with exercising its right to buy.
At this stage, the community body must submit a Schedule 12 information form providing further details in relation to sustainable development and public interest. A business plan and/or feasibility study may also be submitted. The information form and any supporting evidence must be submitted on or before the date the ballot results are to be submitted by the ballotter:
Scottish Ministers will carefully consider all evidence submitted by the community body, landowner and any heritable creditors and determine whether to approve or reject the application for a Right to Buy.
Purchasing the land
If Scottish Ministers approve the Right to Buy, the date of entry and payment of the price must be within eight months from the date the community body confirmed its intention to exercise its right to buy. An extension to the eight months is possible with the agreement of both the landowner and the community body.
Register of Community Interests in Land
Right to Buy applications under Part 2 of the Land Reform (Scotland) Act 2003 are available to view on the Register of Community Interests in Land (the RCIL), held by Registers of Scotland.
Community Land Team
The Community Land Team are responsible for the Community Right to Buy process and can be contacted by emailing the firstname.lastname@example.org mailbox.
The team offers direct assistance to community groups wishing to acquire land, as well as support to community bodies, landowners and other interested parties going through the Right to Buy process.