Compulsory sale and lease orders - Consultation analysis report

5. Further considerations

This chapter summarises responses to the final question in the section of the consultation that focused on CSOs and CLOs and addresses perceived benefits of both types of orders for tackling long-term vacant or derelict properties.

Q.117 Do you think that the introduction of either Compulsory Sale Orders or Compulsory Lease Orders in Scotland would add any benefits beyond a reformed CPO process, as a tool for tackling long-term vacant or derelict properties?

66% of all respondents left a comment at Q117. A range of both positive and negative views were expressed. To aid clarity, the analysis below first presents the more prevalent negative views, followed by potential benefits. In addition, respondents highlighted the need to consider market factors and other arrangements.

Negative views

The most frequently raised negative themes were:

• CSOs and CLOs are not needed
• there is no merit in CLOs
• new powers could increase complexity.

CSOs and CLOs are not needed

Several respondents, 60% of whom were individuals, felt that there was little benefit from introducing CSOs and CLOs. Views against CSOs and CLOs included that they would be more complicated than CPOs, have a narrower application, would add complexity and litigation risk, and that there was a lack of evidence of their efficacy.

Concerns were also raised by a few respondents over perceptions of how authorities had managed compulsory purchases, with views expressed that introducing new powers could risk extending poor practices, such as duplicating procedural features and encouraging ‘mission creep’. These respondents felt that benefits would be marginal and that efforts should focus on making CPOs more effective.

“Introducing Compulsory Sale Orders (CSOs) or Compulsory Lease Orders (CLOs) would not add meaningful benefits beyond a properly reformed CPO system. Instead, they risk normalising state intrusion into private property without addressing the real causes of vacancy or dereliction.” – Individual

“Given past experiences where authorities have refused planning permission to owners only to approve similar schemes for themselves after acquisition, expanding compulsory tools would further erode trust… Effort should be focused on reforming CPOs to make them fair, transparent, proportionate, and genuinely last-resort, not on introducing additional compulsory mechanisms that weaken property rights and increase the risk of harm to individuals and families.” - Individual

No merit in CLOs

Some respondents, primarily local authorities, felt there was little merit in CLOs. These respondents preferred the use of CSOs or CPOs instead, or believed CLOs were not well enough developed in policy or practice to determine their effectiveness. Views were similar to those raised at Q113 and Q114, such as CLOs being perceived as complex, risky and creating potentially challenging relationships with owners.

Could increase complexity

A few respondents felt the orders could increase complexity, such as the potential for legal challenge, a perception of being less flexible than CPOs and at least as time-consuming, with increased costs. It was mentioned by one respondent that:

“Precedent offers little reassurance: England’s Empty Dwelling Management Orders, a comparable compulsory leasing mechanism, proved highly complex and unpopular, with extremely low uptake and criticism for being administratively burdensome and ineffective. This experience suggests that such powers are unlikely to deliver the intended benefits.” - Scottish Land & Estates

Positive views

There were fewer, but more varied positive views expressed at Q117. From most to least mentioned, these included:

• CSOs can increase options for tackling vacant and derelict properties
• Benefits for new communities of new powers
• that new powers could be cheaper than alternatives
• that new powers could be more streamlined than alternatives
• introducing new powers could incentivise owners to act
• new powers could help tackle the housing emergency.

CSOs increase options for tackling vacant and derelict properties

Several respondents, all of which were organisations, noted the potential for CSOs to help tackle issues related to vacant and derelict properties. Views raised aligned with those described at Q106. It was felt that CSOs could help bring properties back into use and overcome barriers associated with uncooperative owners or where other options were not suitable.

“CSO could be a valuable tool for tackling long-term vacant and derelict properties, especially where CPO is not practical.” - Heads of Planning Scotland (HOPS)

Benefits for communities of new powers

Some respondents highlighted potential benefits for communities associated with CSO or CLO powers, such as that it would assist communities with lower access to capital to improve their neighbourhood, that it could assist with community empowerment and that CSOs could be more agile and community-led compared to CPOs.

Cheaper and more streamlined

CSOs and CLOs were viewed as less resource-intensive than CPOs by some respondents, given that they did not require upfront capital expenditure and could offer a more streamlined process. Some other respondents left brief comments to note that such powers could be simpler and quicker than using alternative options.

Can motivate owners to act

Introducing new powers, and CSOs in particular, would likely incentivise owners to act voluntarily, according to some organisations, 60% of whom were local authorities. This was due to the threat of action or as a result of dialogue with the authority (see also Q107). It was noted that limited emerging evidence from compulsory auctions in England suggests that the threat of use could drive positive outcomes.

“The added value of a CSO is that it expects local authorities to initially contact the landowner and hopefully move the site forward through dialogue. CSOs are suitable only where landowners themselves are the main constraint and should be considered a last resort if dialogue breaks down significantly.” - Scottish Land Commission

Useful for tackling the housing emergency

A few organisations felt the powers – CPO, CSO and CLOs were all mentioned - could help tackle the housing emergency as they presented a way of bringing properties back into use, and it was felt new builds alone could not solve the crisis.

“Our research suggests that this would apply to a large enough number of empty homes to make CSOs an effective tool in bringing homes back into use and combatting Scotland’s housing crisis.” - Scottish Empty Homes Partnership

Other views

Need to consider market factors

Some respondents commented that the market needed to be considered, particularly in relation to compulsory sales. In these comments, it was felt that CSO and CLO powers:

• would only be useful in certain parts of the country, as most vacant properties were due to the market itself. It was suggested that a reserve price should be considered to ensure it is not subject to unfair loss of compensation in cases where there is no market
• could impact the wider market in local areas as these powers could create negative perceptions, adding uncertainty for investors, lenders and property owners
• should recognise that the cost of improving listed buildings may be unviable, but equally, that they cannot be demolished, so they are likely to continue to deteriorate unless a new use can be found.

Consider other arrangements

Two respondents felt CLOs and CSOs needed to work in conjunction with the community right to buy. One legal organisation referred to Part 3A of the Land Reform (Scotland) Act 2003 and felt it could be drawn on as a model for circumstances when a compulsory sale order might be appropriate, though it was unclear how tests for Scottish Ministers to approve a community buy out would be met if land was to be sold on the open market.

One respondent felt the orders should apply to all buildings, including historic buildings that were unlisted. In their opinion, this would help deliver relevant policy outcomes of the National Performance Framework 4.

Similar points were also raised by a planning and regeneration organisation to ensure equivalent and up to date land rights and acquisition mechanisms for electricity infrastructure are applicable across the UK.

A range of other comments were left by some respondents. These included the need to introduce legislation ‘in early course’, the need for appropriate funding streams to facilitate use of the Orders, and that any benefit would be dependent on the skill of the local authority as developer/facilitator for appropriate development.

Two respondents used similar wording to suggest that many authorities currently lacked the expertise, leadership and resources required to make effective use of CPOs. Aligned with the previous comments, these respondents advocated for appropriate resourcing and skills development for local authorities.