Compulsory sale and lease orders - Consultation analysis report

2. Compulsory Sale Orders

This chapter presents the analysis of responses to consultation questions Q106 to Q112, which address the proposal to introduce CSO powers for local authorities as set out in the consultation paper and introductory chapter of this report. Such powers would be additional to the existing CPO process, as amended.

The questions address whether CSOs should exist and in what circumstances, how procedures should compare to the process for CPOs, governance or regulatory frameworks, and arrangements for the sale and subsequent use of properties subject to CSOs. It should be noted that it is unclear whether respondents answered these questions based on CSO powers being available alongside the existing CPO process, or as part of a reformed CPO process that was the focus of the rest of the consultation.

As there was considerable overlap in respondents’ answers to Q106 and Q107, the analysis below combines findings from these questions to avoid repetition.

Q.106 Should local authorities be able to instruct the sale of a property without permission from the property owner?

Respondent type	n=	% Yes	% No	% No answer
All respondents	80	55	25	20
All answering	64	69	31	n/a
Individuals	24	42	58	n/a
Organisations:	40	85	15	n/a
- Local Authorities	17	100	0	n/a
- Surveying, valuation and agents	4	75	25	n/a
- Legal	2	50	50	n/a
- Other public sector	3	100	0	n/a
- Housebuilding and development	2	50	50	n/a
- Heritage and architecture	3	100	0	n/a
- Estates and agriculture	3	0	100	n/a
- Planning and regeneration	2	100	0	n/a
- Community land and development	2	100	0	n/a
- Other compulsory purchase	1	100	0	n/a
- Energy	0	n/a	n/a	n/a
- Housing and empty homes	1	100	0	n/a

Among those answering the closed question, 69% agreed that local authorities should be able to instruct the sale of a property without permission from the property owner, while 31% disagreed. Individuals who answered were more likely to be opposed (58%) than in favour (42%). However, there was higher support among organisations, of which 85% were in favour and 15% opposed. All local authorities who answered agreed they should be able to instruct the sale of a property without permission from the property owner.

Q.106 Should local authorities be able to instruct the sale of a property without permission from the property owner?

Q.107 In what circumstances might compulsory sale be justified, and what benefits or drawbacks might there be?

71% of all respondents left an open comment at Q106 and 66% at Q107. As Q107 contains three elements, this section is structured around those topics, i.e. where use of a CSO might be justified, benefits and drawbacks to its use. Additional themes about the need for safeguards and that CSOs are not necessary are also presented below.

Justified circumstances for compulsory sale

Many respondents felt that compulsory sale would be justified for vacant or derelict properties. Types of property mentioned by respondents were land or buildings, and to a lesser extent, homes. The terms property and buildings appeared to be used interchangeably by respondents. Examples of the type of properties which would be suitable were provided, such as:

• where there is serious deterioration of the fabric of a building or state of disrepair
• if the site had been neglected for a long time with no plans in place for reuse
• where the site was detrimental to the local area, e.g. vermin, blocked common repairs, debt to public bodies, anti-social behaviour.

“A compulsory sale should only be triggered when the property is in a significant state of disrepair.” - HMA Property Solutions Ltd

It was also highlighted that compulsory sale may be justified for such properties when a CPO is not suited, for instance, where there is a lack of public funds or where the property cannot easily be used for social housing.

“Long-term empty properties can prove challenging for local authorities to deal with, particularly when the owner is reluctant to take any steps to bring them back into use. Often, these properties cannot be subsumed easily into council or housing association stock, in which case the private sector is likely to be the most sensible and practical end user. In those cases, a CSO would be a preferable option rather than CPO, but both options should be available to provide greatest flexibility.” – Perth and Kinross Council

Several respondents specifically mentioned that a justified circumstance would be where an owner had failed to act. Failure to act was described by these respondents as where owners were unwilling or failing to maintain their property, refusing to comply with requests to deal with detrimental issues, where not acting caused environmental or socio-economic issues, or where the owner could not be traced, was unresponsive or not marketing the property for sale.

Other circumstances considered suitable for compulsory sale, each mentioned by a few respondents, were for: tackling the housing emergency (see Q117), infrastructure projects, habitat restoration, city centre regeneration and contaminated industrial sites. One ‘other public sector’ organisation called for CSO powers to be made available to National Park Authorities, as use could extend to include land or sites impacting on established priorities within an area, such as achieving net zero or nature restoration.

Benefits of compulsory sales

A range of potential or perceived benefits of compulsory sale were raised by many respondents, and it was seen as a ‘strong tool’, ‘critical’ or ‘desirable’. Views expressed by respondents in this theme included that CSOs could be a key way to:

• address ownership barriers to land reuse
• tackle properties that may not be suited to social or affordable housing or other uses due to their location, property type and condition
• enable vital projects to proceed or avoid stalled development
• have a wider application than CPOs, for instance, not requiring delivery of a specific project or where the cost of upgrading would exceed the end value.

CSOs were viewed as a welcome additional tool for local authorities^[2] that could increase the range of options open to them and did not require significant investment. This reduced financial risk to the local authority was highlighted by several respondents, half of whom were local authorities. It was noted that the need for capital expenditure, such as having funds to pay compensation to the owner, deterred authorities from pursuing a CPO, as did other costs, such as those of putting together a case, and funding repairs and upgrades, and that compulsory sale had the potential to reduce this risk.

Using CSOs was also felt to be potentially beneficial in cases where an owner could not be traced or was not engaging. Introducing CSOs was felt to have a deterrent effect by some respondents (see also Q116/117). For instance, having CSOs as an option could incentivise owners to maintain their properties. One individual felt it could also help facilitate constructive dialogue with owners of problematic sites, particularly if a formal framework for engagement were in place.

Some respondents also raised benefits for communities. Issues included that CSOs could enhance public safety, strengthen community empowerment and improve the community. Engaging communities was also mentioned by these respondents, such as giving them rights to request that a local authority initiate a CSO, allowing asset transfers to the community and demonstrating that local authorities are listening to the views of communities and being proactive in addressing their concerns.

Other potential benefits of compulsory sales cited by some respondents included regeneration, creating habitable homes and being able to take action to improve buildings. For instance, the use of a CSO could help conserve Scotland’s natural and built heritage and protect historic buildings.

“If Compulsory Sale Orders (CSO) would allow ownership of buildings to be transferred in a more straightforward manner we can see the potential benefits this would have for the historic environment. It would hopefully have the potential to allow the transfer of neglected historic buildings to new owners and achieve their continued use or reuse.” - Historic Environment Scotland

“CSOs are likely to be most effective in bringing smaller sites and buildings back into productive use, especially as part of wider efforts to promote town centre renewal or wider regeneration.” – Individual

Drawbacks to compulsory sale

The main drawbacks to compulsory sale perceived by respondents were the need for resources by local authorities, that the rights of owners would be infringed, that the sale may not address the underlying issues and that a buyer may not be found. Some felt there were no circumstances in which a CSO was justified, for instance, calling for a CPO to be used instead.

Several respondents noted that costs incurred by local authorities could be a drawback to CSOs, which some felt could be at least as resource-intensive as CPOs. These views reflected the findings of the Scottish Empty Homes Partnership Report provided as background reading to the consultation document, with some respondents directly citing the report. Costs mentioned in responses included preparing the CSO case and papers, inspection and verification costs, litigation or other legal costs and costs associated with a sale not proceeding. Other resourcing issues included having sufficiently skilled staff and capacity to implement CSOs, that the process could be time consuming and the potential for litigation and protracted disputes.

“There are issues like the condition of a central heating system etc. where the Council would find it difficult to warrant condition without incurring costs to inspect and verify. These might be additional costs to be deducted from the proceeds of sale.” – Fife Council

Another perceived drawback identified by several respondents was that these powers could contravene rights set out in the ECHR and that the removal of these rights was unfair, notably as it forced people to concede ownership or control of property against their will, that it could make it more difficult for owners and communities to defend their rights, or that it could disproportionately impact those with fewer resources to resist or challenge state action.

“The supposed benefits, bringing land or buildings back into use, are heavily outweighed by the risks. Chief among these is the normalisation of forced dispossession as a policy tool. Once the state can compel a sale simply because it disapproves of how an owner uses (or does not use) their property, the principle of secure property rights is fundamentally weakened.” – Individual

“Any CSO powers must respect the rights of owners, including homeowners, and comply with ECHR protections Article 8.” - South Ayrshire Council

Some respondents raised concerns that if the CSO was poorly designed, such as criteria being unclear or conditions not being attached to the sale, it may put people off investing, or the new owners may not bring the property back into use. Alternatively, it was noted that selling sites with conditions attached could drive down the value of the land or property.

Issues with sales falling through or stalling were raised by some other respondents. This could lead to unsold properties being ‘in limbo’ or needing to be subject to a CPO, which in itself could put potential buyers off. While one respondent felt a possible solution could be auction sales without a reserve price and matching rules on compensation (i.e. compensation is the same as the sale value), another queried whether this would work:

“There are also questions as to how the CSO would work in practice, as we understand that the property will be sold at auction with no reserve. The new buyer will then need to sign up to conditions requiring them to bring the property back into use within a certain period of time. If the new buyer does not meet these conditions, then the local authority has the option to CPO the property. We would question who would want to buy a property subject to such conditions with the risk of a potential CPO looming in the background.” - CMS Cameron McKenna Nabarro Olswang LLP

Some respondents expressed concern that the effectiveness of CSOs could be hampered by practical issues. Issues could include:

• Incomplete titles
• Family disputes
• Low-value properties
• Failing to consider why owners may leave a property vacant, such as being part of a working farm and unsafe to inhabit, employment challenges in the case of tied property, retaining the property for future use or a lack of tradespeople to undertake improvements.

Safeguards are needed

The need to introduce safeguards to mitigate drawbacks was highlighted by several respondents at Q107 and some at Q109. Certain of these respondents lent their support to the introduction of CSOs only if certain safeguards were provided. For instance, one ‘surveying valuation and agents’ organisation felt CSOs should only be allowed once strict safeguards, independent oversight and clear statutory tests were in place.

The nature of these safeguards was often not detailed, though the main safeguard mentioned was the need for a clear public interest test or public benefit to be evidenced, or for the orders to be used only in cases of last resort. It was felt that CSOs could be used where voluntary efforts had failed, where a CPO was not suitable, where a property is vacant or derelict or where the obstacle to the property’s use as a home is its owner.

Other suggestions included use being conditional on improvement or occupation, adherence to strict time limits and set criteria, adequate regulation, fair and adequate compensation, and transparent processes and oversight. One organisation felt the Scottish Ministers should retain the final say on all decisions for CSOs.

“Need strict safeguards, independent oversight and clear statutory tests before compulsory sale allowed.” - Dalcour Maclaren

“Clear statutory tests for necessity and proportionality, transparent valuation and compensation rules, and independent appeal mechanisms would be essential. Without these safeguards, local authorities could face protracted disputes that consume significant resources and undermine confidence in the process.” - Scottish Land & Estates“If introduced, these powers should: be proportionate; include robust governance; strict time limits, and transparent processes; ensure a fair route to compensation for affected owners. This approach balances the public interest in tackling dereliction with fundamental property and human rights protections.” – South Ayrshire Council

CSOs are not necessary

Several respondents at Q106, and some at Q107, felt that CSOs are not necessary, for instance, because CPOs already enable compulsory takeover of property and can achieve the same intended outcomes (e.g. bringing vacant buildings back into use). Hence it was felt there was no need for further powers, especially given proposed reforms to CPO (see also Q117). Reasons for preferring CPOs included that its framework is already well established, such as safeguards being in place, that back-to-back CPOs are already an option, and that the focus should be on further improving and resourcing the CPO process.

Other views

Other views included a few respondents who felt the scope of property types which CSO powers could apply to should be defined. For instance, one felt it should apply to all buildings, including historic buildings, while another felt the evidence provided supported justification for CSOs only in relation to housing, rather than all property. Another respondent felt the term ‘problematic properties’ should be defined.

Registers of Scotland noted:

“RoS cannot offer a view here, but would provide the observation that in terms of registration of a property in the Land Register it is a condition of registration that an applicant must comply with the application conditions in Part 2 of the Land Registration etc. (Scotland) Act 2012, one of those conditions being that the deed is valid. It would be for the applicant to ensure compliance with all relevant legislation and all necessary consents had been obtained.” – Registers of Scotland

Q.108 If a CSO process was introduced, would the procedures involved in preparing a CSO need to be equivalent to those that apply to a CPO?

Respondent type	n=	% Yes	% No	% No answer
All respondents	80	41	16	43
All answering	46	72	28	n/a
Individuals	15	67	33	n/a
Organisations:	31	74	26	n/a
- Local Authorities	14	86	14	n/a
- Surveying, valuation and agents	3	100	0	n/a
- Legal	3	67	33	n/a
- Other public sector	3	33	67	n/a
- Housebuilding and development	3	67	33	n/a
- Heritage and architecture	2	100	0	n/a
- Estates and agriculture	1	100	0	n/a
- Planning and regeneration	0	n/a	n/a	n/a
- Community land and development	2	0	100	n/a
- Other compulsory purchase	0	n/a	n/a	n/a
- Energy	0	n/a	n/a	n/a
- Housing and empty homes	0	n/a	n/a	n/a

Among those answering the closed question, 72% felt the procedures involved in preparing a CSO would need to be equivalent to those that apply to a CPO, with the remaining 28% disagreeing. 67% of individuals and 74% of organisations that answered indicated that they thought the same procedures should apply. Within organisations, 86% of local authorities and all surveying, valuation and agents organisations supported using the same procedures.

48% of all respondents left an open comment at Q108 though most responses referred to the CSO process as a whole, rather than focusing specifically on the preparation stage. The most prevalent themes in response to this question were that the CSO process should:

• be comparable, wholly or somewhat, with the CPO process
• reflect the compulsory nature of the sale
• be simpler
• be faster
• focus on being thorough.

CSO process should be comparable to CPO

By far the most prevalent theme at Q108 was that several respondents, all of which were organisations, felt the CSO process should be either wholly or partially comparable with that for CPOs. Reasons given for why it should be comparable included that they would have the same impact, to comply with ECHR, to ensure use was justified and proportionate, and to provide adequate compensation.

“The process may need to differ slightly, whilst retaining the same due diligence and process.” - Community Land Scotland

“It is likely CSOs would have to meet the safeguarding and reporting standards of CPOs (at a minimum) and that most, if not all, parts of the CPO process would need to be replicated.” - Scottish Empty Homes Partnership

Reflect compulsory nature of the sale

Some respondents felt the CSO process should reflect its compulsory nature. Comments included that the process should:

• provide added safeguards
• adopt clear statutory tests
• consider how land value would be ascertained
• consider whether the whole of the sale value would be payable to the owner, even if the sale price is higher than the compensation value
• be more protective of the owner, recognising that the local authority will not bear long-term responsibility.

“The acquiring authority would not be acquiring title and so a new procedure would be required for how the compulsory sale process would be managed and what role the acquiring authority would play in this. The procedures for the compulsory transfer of land could be based on sections 97Q and 97R of the 2003 Act [The Land Reform (Scotland) Act] which could deal with the mechanics of the actual land transfer. However, section 97D of the 2003 Act is in favour of an identified community body in the same way as a CPO is promoted by an identified acquiring authority. That would not necessarily be the case with a CSO where it might be envisioned that the sale would be to a more open market” - Law Society of Scotland

Process should be simpler

Reducing the complexity of certain requirements of CSOs, should they be introduced, was suggested by some respondents. This was recommended because those respondents thought that CSOs would likely be used for single property cases, that these properties are likely to have been lying vacant for a considerable time and therefore unlikely to be the subject of a loan, and that the purpose of CSOs is to create a simpler structure. Additionally, one respondent noted CSO powers could be applied in a less onerous manner for vacant or derelict commercial properties given that, in their view, there is no direct human rights impact on private residence.

Suggested ways the process could be simplified include not needing to demonstrate the value of any particular use, providing tailored documentation and templates, only needing to advertise once at the outset and place a notice at the property to advise it will be advertised at auction, streamlining the confirmation process or excluding parts of the public interest test as noted below:

“Statement of Reason should be streamlined for CSOs to focus on engagement & adverse impact only and exclude other parts of the public interest test (funding, need to complete a project, strategic fit, etc.).” - Glasgow City Council

Process should be faster

Some respondents felt that if CSOs were introduced, the process should be faster than the CPO process. This could help avoid prolonged blight and could be achieved by simplifying the information needed.

Process should focus on being thorough

The need to ensure fairness and have adequate safeguards in place was recommended by some respondents should CSOs be introduced. These respondents felt, therefore, that the process should be similar or more thorough than for CPOs. These respondents emphasised the need for a high threshold or only using CSO as a last resort, with suggestions including independent scrutiny, strong rights of objection and appeal and straightforward compensation.

“Simply mirroring CPO procedures would risk normalising compulsory sale as a routine tool, rather than treating it as an absolute last resort. As a landowner, informed by past trauma and long-term harm caused by compulsory processes, that would represent an unacceptable erosion of property rights.” – Individual

Other views on process

Several respondents at Q108, and some at Q107 incorporated here, left a range of disparate comments on how the CSO process could operate that did not directly answer the questions. Respondents’ suggestions included:

• clearly pre-defining steps and actions, using a bespoke procedure, wherever possible, to reduce the risk of misuse and future challenge
• linking the use of CSOs to unused planning permissions, where possible
• when preparing a CSO, local authorities should be expected to draw on a wide range of different sources when making their case, such as reports of nuisance, previous enforcement action or evidence of locally orchestrated public campaigns relating to the site that are supported by representative community groups
• when identifying sites, local authorities should address local aspirations by considering sites identified through locally based plans, prepared in collaboration with community groups such as Local Place Plans
• adopting an explicit ‘support first, enforcement last’ structure, to ensure all other options, including the possible use of a CPO or the ownerless property transfer scheme, have been exhausted
• to include listed as well as non-listed buildings in CSO powers, and to ensure that no demolition of a historic building can occur following a compulsory sale
• adopt an approach like that of non-domestic rates when setting out the case for CSOs, such as there needing to be a significant difference between the extent to which the lands (and heritage assets) are being used and the extent to which they could reasonably be used
• using auctions to overcome unrealistic owner expectations of the value of a site and the need to obtain a valuation or estimate, which could prove difficult
• considering council tax arrears by an owner, for instance, when determining the amount of compensation to be paid.

Q.109 What governance or regulatory frameworks would need to be introduced to ensure that any future CSO process is used fairly and effectively?

51% of all respondents left an open comment at Q109. A wide range of views were expressed, including, from most to least mentioned:

• aligning frameworks to those used for CPOs
• providing compensation for the owner
• governing and regulating the sales process
• demonstrating clear benefits from undertaking the CSO process
• ensuring the right to an independent appeal
• requiring local authorities to work with owners
• monitoring the use of CSOs.

The reader is also advised to refer back to Q108, given that many respondents commented on the CSO process at this question too.

Align frameworks to those used for CPOs

Brief comments were left by several respondents to note their view that the process should align with that used for CPOs, though it was often unclear whether this was the existing process or the reformed process. One anonymous local authority felt it should be like the CPO process, but exclude compensation, as this would be determined by market forces.

Provide compensation for the owner

Some respondents, mostly organisations, commented on the need for compensation rules. Views varied on whether these would be simpler or more onerous than for CPOs. For instance, one view was that the process would be more straightforward as compensation would be determined by the final auction price, while one respondent felt there should be enhanced compensation safeguards.

It was felt rules for compensation should consider:

• disruption, stress and long-term harm or other losses for owners
• deducting expenses and costs incurred by the local authority, including consideration of the impact on the neighbourhood
• defining the period during which compensation would be paid, but that once this was over, ownership rights would be extinguished.

“To ensure fair market valuation, plus disturbance or other losses where relevant, consistent with CPO principles there needs to be a transparent compensation framework which is open to scrutiny.” – Propertymark

Govern the sales process

Some respondents felt the sales process should be subject to regulation. Various aspects needed to be considered according to these respondents, including heritable creditors, negative equity, transparent marketing, disposal processes, valuations, whether a reserve price would be set at auction, and applying notice periods. Powers to allow the local authority to market the site and to administer sales funds were also felt to be needed.

“In an example such as an abandoned residential property or one that is unoccupied for the long term, especially where it has been allowed to fall into significant disrepair, notice periods should also apply to encourage a co-operative approach to sale before a compulsory order is made. There should be defined time limits and recourse to the District Valuer to identify an appropriate value for the property. Where an owner of land or property cannot be traced, despite reasonable endeavours, there should be a period of public advertisement to allow any ownership interest to come forward, after which the local authority should become the seller and have first option to be the buyer, but not be obliged to buy.” - East Renfrewshire Council

Demonstrate clear benefits

The need for the local authority to make a clear and compelling case for compulsory sale in the public interest was recommended by some respondents. These respondents called for CSO cases to meet clear statutory tests showing exceptional circumstances, necessity and proportionality, meeting public interests and demonstrating that a change in ownership is the best and most effective way to ensure a property is improved or brought back into use. The need for independent approval of CSO applications was recommended, as was transparent decision-making, including publishing reasons for using a CSO.

Ensure the right to an independent appeal

Providing access to an independent right of appeal was felt to be important by some respondents who left brief comments on the theme. Suggested bodies who could take on this role included an ombudsman, courts or tribunals, including the Lands Tribunal for Scotland.

“Landowners must have a clear statutory right to challenge both the principle of the CSO and its implementation, with access to courts or tribunals without prohibitive cost risk.” – Individual

Require local authorities to work with owners

Some respondents felt that local authorities should be required to work cooperatively with owners wherever possible to find solutions without using a CSO. Examples included:

• ensuring that repeated attempts had been made to contact the owner and giving them sufficient time to improve the site voluntarily
• mandating local authorities to consult over an agreed period with owners to provide clear reasons why they are using CSO powers and alternatives they could adopt
• using CSOs in tandem with schemes operating in local authorities designed to encourage owners to bring properties back into use.

Monitoring use of CSOs

The need to ensure scrutiny and monitoring of CSO use was recommended by some respondents. Ideas included central government monitoring and reporting, regular reporting on use, outcomes, any legal challenges and compliance or the local authority that issued the CSO being responsible for monitoring implementation.

“Wider enforcement and monitoring frameworks are required. We recommend that the planning authority issuing the CSO is responsible for monitoring implementation. After an agreed time, the planning authority would be expected to inspect the site and make a judgement as to whether it had been brought back into productive use. Providing the inspection is satisfactory the authority would then be expected to issue a completion certificate. Once the completion certificate has been issued then the process would be complete and the CSO should be removed from the property title.” – Scottish Land Commission

Other views

In addition to the points listed above, some respondents called for regulations or statutory guidance to govern the circumstances in which CSOs can be used. This was felt necessary in relation to the steps required to identify ownership (similar to the CPO process), when a CSO can be used, for what sites and who can use them, along with clearly defined objectives, evidence-based thresholds and statutory tests and criteria. For instance, one legal organisation felt it would be necessary to ensure CSOs involve very specific powers to avoid damaging confidence or spooking investment in the property market.

A few respondents at Q109, and a few at Q110 incorporated here, called for timescales to be set and adhered to. For instance, a time limit could be imposed to ensure new owners undertake development or return the property to active use. This was felt by one individual to prevent land-banking or speculative gain. The same respondent also suggested onward sale for profit should be prohibited within a defined period unless expressly authorised following independent scrutiny.

Two called for other parties to be involved, such as property agents and professional membership bodies. It was suggested these bodies could advise on valuation, market conditions, compensation, mandatory consultation, and public notice procedures to ensure transparency. Provisions for local authorities to claim back any costs were called for by two local authorities, one of whom queried whether a charging order would be placed on the title deeds to allow this to happen.

Two felt site acquisition should reflect the local development plan (LDP) or be supported by local policies, priorities and plans, such as those in the LDP, Local Place Plan or National Park Partnership Plan.

Q.110 What measures could be taken to control the use of the property by the new owner?

59% of all respondents left an open comment at Q110. The measures outlined by respondents included, from most to least mentioned:

• attach conditions to the sale
• use title conditions / burdens
• use penalties or clawback
• use the planning process.

Other themes included the need to consider potential owners, the role of local authorities, and respondents emphasising the need for controls to be in place.

Attach conditions to the sale

Several respondents felt conditions should be attached to the sale to control the use of the property by new owners. It was noted by two respondents that this was recommended in the Land Reform Review Group report, which also set out that the local authority would be given the right to purchase the land three years after the sale, at a valuation set at that date by the District Valuer, if no development on the site had commenced. Other respondents in this theme also advocated setting a timescale for when the property should be returned to use, with one suggesting it could be returned to the owner after the deadline if this had not occurred. Other conditions raised by respondents included those addressing local needs and requirements, minimum habitability standards and restrictions on uses that undermine local housing, such as second homes or short-term lets. One heritage and architecture organisation felt that all necessary planning permissions and/or consents could be obtained before the sale was finalised, a common practice with commercial property sales.

“Any conditions imposed must strike a balance between ensuring the CSO serves its purpose and the negative impact that any controls or obligations that are put on a new owner will have – reducing the potential marketability and prospects of sale and will also detrimentally affect value of the property.” – Renfrewshire Council

Use title conditions / burdens

Using title burdens was recommended by several respondents, 50% of whom were local authorities, to control the use of the property by the new owner. These were felt to offer longer-term controls over the property than other options. However, cautions were given that this did not guarantee action by the new owner, as the burden could be varied or discharged by the Lands Tribunal of Scotland, or there may be failures in drafting them that make them unenforceable.

Two legal organisations noted provisions set out in section 45 of the Title Conditions (Scotland) Act 2003 for the purpose of promoting economic development were relevant here, with one noting amendments would be required.

A local authority highlighted that the title burden, dischargeable on completion (repair and occupation), was already used in back-to-back CPOs. It felt enforcement at the Lands Tribunal was not favoured, as it meant further costs.

Use penalties or clawback

Some respondents left comments on what should happen if the new owners failed to return the property to use or did not comply with the conditions set. These centred on the use of penalties or clawback mechanisms. Singular views included:

• that local authorities should have the option to acquire the property or enforce controls, or that the property be returned to the original owner
• introducing restrictions on resales, clawback clauses or the possibility of a fast-tracked CLO or CPO should the property fall empty again
• securing the use of properties through an agreement with accompanying security, which could provide for and secure a clawback of any discounted price.

Such options were felt by one respondent to ensure public value, particularly when a buyer benefits from below-market pricing or public grants.

“There is also an argument that there should be an opportunity to penalise a failure to comply with conditions with a simplified CSO process to force a further sale without the same level of scrutiny on the basis a CSO has previously been approved by the confirming authority.” – Renfrewshire Council

Use the planning process

Some respondents felt that planning regulations could be one way to control use. Views included that planning obligations or covenants could restrict use to an agreed purpose, that all necessary planning permissions and/or consents needed to be obtained before being finalised, and that the planning authority should provide a planning statement to indicate to prospective purchasers the range of potential uses the authority would find acceptable, linked to the local development plan. The respondent making this latter suggestion continued:

“Further guidance would be required that would set out exactly what would be required in the planning statement, but in principle, planning authorities should be encouraged to provide all relevant information that can be made publicly available as part of the sale. Where planning permission and site investigations take longer than expected due to unforeseen reasons, it is proposed that the planning authority should have the power to extend the development deadline, providing the new owner can prove sufficient efforts have been made to bring the site into productive use.” - Scottish Land Commission

Consider the potential owners

Some respondents felt that consideration of potential owners was needed. For example, determining or ranking who such properties could be sold to, potential owners being checked for suitability, and requiring the new owner to agree to conditions. Views differed on who would likely be suited as an owner; for instance, two organisations felt social housing providers should be prioritised, while another felt CSOs would mainly be used for properties being sold to the private sector and therefore would not be suitable for affordable housing. One legal organisation queried whether conditions would apply beyond the initial owner purchasing the property.

Role of local authorities

Ways local authorities can assist with controlling the use of properties were mentioned by some respondents. The main role was felt to be a monitoring function whereby they retained oversight to ensure compliance. However, a role in setting conditions was also mentioned, such as dictating permitted use, particularly if renovation costs were met by them, and determining what a ‘reasonable period’ would be for completion of improvements. In terms of monitoring, suggestions included that local authorities should use enforcement powers, that they should request a schedule of works to be prepared and submitted by new owners, that they should certify works completed via inspections to ensure it meets required standards, and that they should undertake a reporting function, such as on compliance with use conditions.

Controls are needed

In addition to respondents who suggested specific types of controls that could be introduced, some respondents highlighted their support for the need to introduce controls on the use of the property more generally. Though these respondents did not detail the types of controls, they did comment on how they thought controls should operate. For instance, it was felt they should:

• ensure the property is used in line with the public interest and purpose of the CSO
• be strictly limited to clearly defined circumstances such as long-term vacant or derelict properties that are not part of wider housing development proposals or allocations
• combine legal conditions, planning controls and enforcement to ensure the property contributes to regeneration or public benefit as intended
• be explicit and enforceable
• be carefully designed to remain compatible with market funding and not render reacquired properties effectively unfinanceable.

“Without appropriate safeguards, there is a risk that new owners could leave properties vacant, neglect them, or use them in ways that undermine the objectives of the CSO. Effective controls help protect local communities, maintain property values, and provide clarity and certainty for all parties, including property owners, buyers, and agents involved in the process. Such controls are essential to make sure the property is used appropriately and in accordance with the intended purpose of the CSO.” - Propertymark

Q.111 How long should a property subject to a CSO remain on the market?

55% respondents left a comment at Q111, with the most prevalent comments being general views on timescales but not specifying a timeframe. Thereafter, the most prevalent view was a year, followed by between six and twelve months, and over a year but less than three years.

General views on timescales

Several respondents left comments on timescales, the most prevalent of which was that it was difficult to set a timescale as this would depend on factors such as length of time to sell, market conditions, the type and location of the property, the urgency of the public interest objective and the nature of any conditions set. Other views demonstrated a diversity of opinion regarding the length of time that was appropriate, including that any period should be defined and realistic, that it should exceed the average time community bodies need to raise funds, that leaving it indefinitely would create undue stress and uncertainty for owners while a shorter time period risked a rushed sale and lower value.

“The period should balance giving genuine purchasers time with avoiding extended limbo for neighbours and communities. In the event that a conventional marketing process is followed without success, consideration should be given to an alternative approach – e.g. auction sale.” - Scottish Property Federation

A year

Several respondents felt a year was a suitable length of time, but most did not say why. One community land and development organisation suggested this could allow time for community fundraising and to make a bid. If it had not sold after a year then CPO should be utilised by the local authority according to one housebuilding and development organisation, while a local authority suggested it could be auctioned.

More than six months, less than a year

Views that the period should be between six and twelve months were expressed by some respondents, though there was no consensus in this theme. Views included six months, six to nine months, six to eight months, six to twelve months, or a year maximum.

Reasons given for suggesting these timescales included that:

• six months was long enough to fully test interest, but twelve months was also acceptable
• a longer period than six to nine months would risk turning a CSO into a ‘mechanism of pressure’ rather than a targeted, proportionate intervention
• that six to twelve months would likely be appropriate in most markets, with scope to extend in weaker or highly specialised markets or shortened where interest is strong.

One local authority felt that a property that had been marketed for six months or more should be remitted to the District Valuer to determine whether the advertised price is reasonable, and the seller should be obliged to seek a price in line with the Valuer’s recommendation.

More than a year but less than three years

Some respondents felt the timeframe should be more than a year but less than three years. Again, there was no consensus within this, with views including two years, no more than three years or a minimum of a year due to the complex nature of properties.

“The confirmation of the CSO could contain provision setting out a period of three years for the property to be sold and brought back into use. If at any time during the CSO process an owner contacts the authority and can demonstrate that they are looking to sell the property or bring it back into use for their own purpose, then local authorities should have the powers to suspend the process for a period up to 6 months or longer if agreed by the local authority.” - Glasgow City Council

Six months or less

Some respondents felt that six months or less was suitable. Reasons included that any longer could have an adverse impact on the area, that this seemed a reasonable period and that other methods of getting it back into use will likely already have been tried by then.

On a case-by-case basis

Some respondents felt that the length of time a property subject to a CSO should remain on the market should be determined on a case-by-case basis. This would allow for factors such as those noted in the ‘general views on timescales’ theme above to be considered. One community land and development organisation felt this should be determined on a site-specific basis, but with a minimum of three months, while one local authority felt the time on the market could be extended on a case-by-case basis if the prospect of a sale was a reality.

Q.112 What should happen if the property does not sell?

60% of all respondents left an open comment at Q112. The most prevalent theme was that the local authority should make arrangements to deal with the property if it did not sell, and the second most prevalent view was that the local authority should withdraw it from the market, leaving it with the current owner.

The local authority could address it

Several respondents, most of whom were organisations, felt that if a property does not sell, then the local authority should deal with it. The main approach suggested for this was via a CPO, though some respondents suggested the price could be reduced and the property re-marketed. Suggestions on this topic included revisiting and revising terms, such as independent agents revising the price and method of marketing, and that the property should be remarketed after a lapse of six months.

“If a property does not sell, there should be a structured review: re-examining price and marketing assumptions.” - Scottish Property Federation

Other ideas included setting out an alternative use in the next Local Development Plan, using other legal measures to achieve the intended public benefit, or undertaking repairs so it could be rented.

“Including the CSO powers within the CPO legislation could create the opportunity to build in the option to convert a CSO into a CPO, providing that the acquiring authority is willing to take on ownership.” - South Ayrshire Council

The local authority should withdraw it from the market, leaving it with the original owner

The next most prevalent theme, mentioned by several respondents, mostly organisations, was that the local authority should withdraw and/or that the property should remain with the original owner. In such cases, it was felt that the CSO should be abandoned or automatically lapse, but that other enforceable powers should continue to apply (e.g. building standards, council tax, environmental health). At Q110 one respondent, incorporated here, felt the Crichel Down Rules were directly relevant here as they embody the long-standing principle that land taken compulsorily should, where possible, be offered back to the former owner if it is no longer required for the purpose for which it was acquired.

“If the CSO has a limited timescale, then the land would continue to be owned by the original landowner, but the CSO would no longer be enforceable.” - Law Society of Scotland

Introduce timescales

Some respondents emphasised the need for timescales as part of the CSO process if the property does not sell, or the need for a clear process to avoid the property being in limbo. Singular comments that mentioned setting timescales where a property does not sell included:

• introducing a period of possibly three years before another CSO could be served
• in situations where a property does not sell within a year, then the authority should be able to buy the property at a price determined by the District Valuer or be auctioned.

“We would suggest that the property remains on the market for a period up to 6 months then following a lapse of 6 months local authorities should be allowed to market the property for sale again. If it does not sell second time round then the property is simply taken off the market. The local authority should then be given a further 12 months to consider its options which could include remarketing the property again after this period; compulsory purchase the property and carry out the required works itself and sell it on the open market (the local authority would recover its costs from the sale of the property) or simply take no further action until a buyer comes forward.” – Glasgow City Council

Other views

Linking the sale with auction practices was described by a few respondents at Q112, and some at Q111, incorporated here. Ideas included using auction where the open market may not be appropriate or a property does not sell on the open market and reflecting the normal practice for property auctions of similar sites / buildings.

A few respondents suggested the property should be offered to community groups or social/affordable housing providers at preferential rates. Two suggested it should be demolished or use vacant/derelict land processes.