Publication - Advice and guidance

Community right to buy abandoned, neglected or detrimental land: full guidance

Published: 9 Nov 2018

Guidance in relation to Part 3A of Land Reform (Scotland) Act 2003 intended to support communities through the right to buy process from initial identification of land to the completion of a purchase.

Community right to buy abandoned, neglected or detrimental land: full guidance
1.4. Forming and Registering a Part 3A Community Body

1.4. Forming and Registering a Part 3A Community Body

1.4.1. The Act requires that only a Part 3A CB can buy land under Part 3A of the Act. A community must first therefore form a Part 3A CB before it can submit an application. A Part 3A CB may be one of a number of different legal entities:

  • a company limited by guarantee (CLBG);
  • a Scottish charitable incorporated organisation (SCIO); or
  • a community benefit society (BenCom).

The body must have:

  • compliant articles of association (AofA) if the CB is a CLBG;
  • a compliant constitution if the CB is a SCIO; or
  • compliant registered rules if the Part 3A CB is a BenCom.

1.4.2. The matters that must be included in your Part 3A CB's governing documents are set out in section 97D(2), (3) and (4) of the Act. The matters are:

  • a definition of the community to which the Part 3A CB relates;
  • provision enabling the Part 3A CB to exercise the right to buy land under Part 3A of the Act;
  • provision that the Part 3A CB must have not fewer than 10 members (Ministers have a discretionary power under section 97D(5) of the Act to accept a Part 3A CB with fewer than 10 members, e.g. in a remote rural community). If relevant, the Part 3A CB should discuss this point with the Community Land Team before submitting their Part 3A CB's governing documents. If section 97D(5) of the Act is to be applied, the Part 3A CB should demonstrate why it is not possible for it to have 10 members and ensure that the application cannot be construed as a private or family application (sections 97D(2)(c), 97D(3)(c), or 97D(4)(c) of the Act);
  • provision that at least three quarters of the members of the Part 3A CB consist of members of the community;
  • provision whereby the members of the Part 3A CB that are also members of the community, have control of the Part 3A CB. Ministers recognise that non-community members can contribute substantially to, and play a vital part, in the success of a community purchase by bringing the necessary skills and expertise. While Ministers acknowledge the importance of non-community members, care should be taken to ensure that, where such other members are to have a role in relation to the Part 3A CB, that role should not prejudice the position whereby community members have control of the Part 3A CB;
  • provision ensuring proper arrangements for the financial management of the Part 3A CB;
  • provision that, if the CB is a SCIO or BenCom, and a person requests a copy of the minutes of the Part 3A CB's meeting, these are provided to that person within 28 days of the request, if that request is reasonable;
  • provision that if the CB is a SCIO or BenCom, and where a request for a copy of the minutes of the Part 3A CB's meeting, the Part 3A CB may withhold information in those minutes provided that they have reasons for doing so;
  • provision ensuring that any surplus funds or assets of the company are to be applied for the benefit of the community;
  • provision that on the winding up of the CLBG (should that be the structure you decide upon) and assessment of their liabilities, the property (including any land acquired by it under Part 3A of the Act) passes to such other community body or crofting community body as may be approved by Ministers. If no such body exists, then they may be passed to Ministers or to a charity as Ministers may direct.

1.4.3. A model AofA (for a CLBG) and model constitution (for a SCIO), which are compliant with the Act, can be accessed on the Scottish Government's community right to buy webpages – see Annex B. These templates are not "off the shelf" products, and they may need to be amended to meet the particular needs of each Part 3A CB. Other governing document templates may be available elsewhere; these may need to be amended to be compliant with the 2003 Act.

1.4.4. In addition, a body is not a Part 3A community body unless Ministers have given it written confirmation that they are satisfied that the main purpose of the body is consistent with furthering the achievement of sustainable development. The group will need to demonstrate this in some way. Inclusion in their governing documents is the preferred method.

Seeking charitable status

1.4.5. It is up to the Part 3A CB to decide whether they want to obtain charitable status, and if so, when. Most Part 3A CLBG CBs may wish to wait until they are purchasing their land before they seek charitable status. This is because the Office of the Scottish Charity Regulator (OSCR) take account of how active a group is when decided on whether or not to award charitable status.

1.4.6. If the Part 3A CB is a CLBG, the process to secure charitable status may require further changes to their governing documents. For this reason, it is advisable to seek charitable status before seeking compliance under Part 3A. They should contact OSCR for details on the requirements to become a charitable body. Full contact details can be found at Annex B.

Seeking approval of governing documents

1.4.7. Draft governing documents should be sent to the Scottish Government's Community Land Team before the Part 3A CB is incorporated. This will ensure that the Part 3A CB's governing documents meet the requirements of section 97D of the Act. This will save time and inconvenience in the long run. If the Part 3A CB is already an incorporated organisation before they apply they should contact the Community Land Team to ensure that their governing documents are compliant with section 97D of the Act.

1.4.8. If Ministers are satisfied that the main purpose of the Part 3A CB is consistent with furthering the achievement of sustainable development then they will issue the Part 3A CB with a letter confirming this. After receiving this letter, the Part 3A CB should register with Companies House if they are a CLBG, the Office of the Scottish Charity Regulator (OSCR) if they are a SCIO, or the Financial Conduct Authority (FCA) if they are a BenCom (addresses for these regulators can be found in Annex B). If a SCIO or BenCom is the chosen structure, Ministers will need confirmation that the Part 3A CB has been set up with the relevant organisation before they can issue the compliance letter. If the Part 3A CB is already an existing CLBG, SCIO, or BenCom, they should inform Companies House, OSCR or the FCA, as appropriate, of any changes to the Part 3A CB's governing documents.

1.4.9. If a Part 3A CB amends their governing documents once they have received written confirmation that Ministers are satisfied that the main purpose of the body is consistent with furthering the achievement of sustainable development, they should notify Ministers of these changes (section 97E(1) of the Act). If, after purchasing the land, the Part 3A CB no longer meets the requirements of the Act, Ministers can acquire the land compulsorily (section 97E(2) of the Act).


Contact

Email: Community Land Team