Community Rights to Buy: consultation analysis

3.5 Third-party purchasers

Q11: Should third party purchasers remain an option under the compulsory rights to buy?

This question first invited respondents to choose from Yes/No/Unsure. The accompanying free text box also invited additional comments.

There was a total of 52 standard responses to this question with 49 respondents selecting a voting option and 30 providing additional comments in the free text box.

Regarding the voting options, the breakdown was as follows:

Summary

A large number of respondents were in favour of retaining the option for third-party purchasers, recognising the added benefit that they can bring, but it was also commented that there should be firm agreements in place between the community group and the third-party (covered by the following two questions). The main issue for those against is that a third-party purchaser is no longer a community right to buy, and there is a risk that community groups could be used as a means to an end by private interests.

Themes

Across the spectrum of responses to this question there was a common sentiment that, if third party purchasers remain an option, some form of legal agreement with the community group should be in place that would set out roles and responsibilities etc.

Some respondents also noted the potential for third party purchasers to complicate the community right to buy process. Although a third party purchaser may bring benefits, for example, a housing association to deliver to the development of affordable housing, their involvement should not overly complicate the process, and the complete removal of the option of a third party purchaser should be considered if that is the case.

A negative impact might also be seen if the involvement of a third party continues in the long term as it may take the place of the community managing the land, whereas it may be preferable to build up capacity in the community group so it can take on that function i.e. training and support for groups is important and could be lost if the third party takes the group’s place in this respect.

Amongst those more definitively in support of third-party purchasers remaining an option, the following comments were made:

• It supports a wider range of routes to acquisition such as interim ownerships whilst the group establishes itself.
• Consider requiring a higher ballot percentage in such cases so that community support can be demonstrated.

“Yes, third-party purchasers should remain an option. They can help deliver projects that a community group may not have the capacity to manage alone—such as affordable housing or renewable energy. However, this option must be used carefully to ensure the community remains in control and the land is used in line with local needs.” (National Sheep Association)

Amongst those opposed the reasons given were:

• Allows exploitation of community.
• Means it is no longer a community right to buy.
• Community ownership must be the only result of a successful community right to buy. Separate agreements can be reached between community groups and third parties if specific expertise is required.
• Other reasons given include:

“If a community does not have the capacity to manage the land, then it is not community right to buy.” (Atholl Estates)

“The right to buy should only result in community ownership.” (Individual respondent)

“That allows developers to exploit communities” (Individual respondent)

Amongst those less certain:

• Acknowledgement of the potential advantages of third party of involvement, particularly in respect of housing, but caution against the scope for onward transfer by the third party to a body unconnected to the community.
• Suggestion that third party purchasers should have some form of compliance requirements.

“Potentially, yes. Third-party purchasers could remain an option, particularly in cases where the community lacks the capacity or infrastructure to manage the asset directly. This flexibility could be crucial in ensuring that important assets are not lost simply because a community group is not yet in a position to take ownership themselves.” (Community Enterprise)

Q12: If third party purchasers remain an option, should requirements be placed on the structure of the third-party purchaser for it to be eligible, for example in line with the compliance requirements placed on community group applicants?

This question firstly invited respondents to choose from Yes/No/Unsure. The accompanying free text box also invited additional comments.

There was a total of 48 standard responses to this question with 46 respondents selecting a voting option and 24 providing additional comments in the free text box.

Regarding the voting options, the breakdown was as follows:

Summary

A strong majority of respondents were in favour of third-party purchasers being required to adhere to specified structures and gain some form of compliance. However, there was a note of caution about not making the option unusable as a result.

Themes

Amongst those supportive of the proposition there was a strong sense that third parties should have some form of compliance relating to structure, governance and eligibility. Reasons given were to protect the integrity of the system but also to protect community groups from exploitation. There were also specific suggestions such as:

• The inclusion of an asset lock in the third party’s company documents.
• Suggestions across the spectrum of responses that a legal agreement between the third party and the group should be a requirement.
• That third parties should have some form of social or community purpose.

“Yes, there should be clear requirements for third-party purchasers, similar to those for community groups. This helps ensure that any third party is trustworthy, accountable, and committed to working in the community’s best interests. It also protects against outside organisations taking control in ways that could harm local land use, including farming. Setting clear standards will help maintain transparency and safeguard rural livelihoods.” (National Sheep Association)

“Third parties should have a social or community purpose e.g., a development trust that operates across the wider area, a housing association, a national charity etc.” (Scottish Community Development Centre)

“We believe it is concerning that no safeguards are currently included within the legislation and if the third-party purchaser option continues then we would suggest that eligibility requirements should be introduced.” (Scottish Land and Estates)

Amongst those opposed to the proposition it was commented that, in the context of third-party purchasers being useful to community groups, introducing requirements could make their involvement impractical, to the detriment of community groups and community right to buy overall.

“No, we do not believe such requirements would be helpful and would risk making the use of third-party purchasers impractical.” (Scottish Land Commission)

Those respondents who were less certain tended to reflect the above points in their free text comments.

Q13: Should the third-party purchaser be required to have an agreement in place with the community body that shows the future relationship between the two and any business plan in place for the asset, as part of the application?

This question firstly invited respondents to choose from Yes/No/Unsure. The accompanying free text box also invited additional comments.

There was a total of 49 standard responses to this question with 48 respondents selecting a voting option and 27 providing additional comments in the free text box.

Regarding the voting options, the breakdown was as follows:

Summary

There was a strong majority in favour of an agreement between community groups and third-party purchasers being mandatory. Reasons given were mainly to protect the community group and ensure that the asset is used for community benefit purposes into the future.

Themes

There were a wide range of comments in support of this. The main themes were:

• This will protect community interests in the long term, particularly in cases where the third party might dissolve, seek to sell on the asset, or otherwise to act counter to the community’s interests.
• Any such agreement should be kept simple.
• Community groups should be supported via funding and/or guidance to develop such agreements e.g. funded legal support.

“Not least to protect the community from being cast aside and the original community benefit aims being ignored.” (Individual respondent)

“A formal agreement and business plan would help ensure that the third-party purchaser is acting in line with the community’s goals and that the asset will be used responsibly.” (National Sheep Association)

“It should also be a condition that the community should have first option, should the third party look to sell the land on” (Scottish Community Development Centre)

Comments from respondents opposed to the requirement for an agreement focussed on the importance of the sharing documents in a transparent manner and that agreements will be in place but that these needn’t be formal. In the context the suggestion was made that an asset lock in the articles of association would be sufficient.

“There will be agreements in place between community bodies and third-party purchasers and much cooperation will have been required before applications are submitted. There is no need for formal documentation beyond a statement of an asset lock in the articles of association.” (North Queensferry Community Trust)

Additional comments from those unsure focussed on the importance of supporting groups to handle matters themselves or at least supporting them to reach any such agreements. There were also questions regarding enforcement of this requirement and that consideration should be given to the type of third-party body e.g. an agreement might be problematic but may nevertheless be required if the third party is not community controlled.