The King once suggested that we might all benefit from a little less conversation and a little more action. As is well known, the King in question was Elvis Presley. What is less well known is that he was talking about land reform in Scotland. I understand the catchy slogan, “Less conversation, more legislation!” was dropped from an earlier draft of the song: who knows what innovative land laws might have been triggered if that had been retained in the final version?
Okay, maybe that is a stretch, but maybe I got you interested in a potentially dry subject matter. What is true is that the sentiment expressed by Presley can materialise in relation to land reform, as evidenced by this tweet from historian and land reform activist Jim Hunter. His wry observation, “One of these days we might stop talking and actually DO some land reforming”, was in response to a tweeted advert for a symposium about the Final Report of the Land Reform Review Group at the University of Aberdeen. I am fairly confident he was not criticising my employer for having the temerity to host another land reform talking shop, but just in case he was it is worth noting (to adapt a recent Scottish Labour slogan) that Scotland is on pause at the moment, insofar as legislation at the Scottish Parliament is concerned. There will not be a new Land Reform Bill at Holyrood until comfortably after the independence referendum on 18 September, so if there ever was a time to riff around something with impunity, now is such a time.
The format for the event was simple enough. I was an adviser to the LRRG, hence colleagues and I felt I was an ideal candidate for chairperson/organiser rather than a potential speaker. I then sought out a team of speakers, calling on colleagues from the School of Law, advocates and solicitors to offer insights on any comment-worthy area of the Report. The topics selected were: the law of succession (more commonly known as inheritance); common good land and ownerless land; planning law; residential tenancies; and capping the maximum area that can be held in a single beneficial ownership. These will be looked at in turn below, but it should be stressed that this left an awful lot of ground covered by the LRRG uncovered at the symposium. Matters such as State Aid, potential fiscal tools, Crown rights and the acceleration of migration of land titles to the Land Register of Scotland were not addressed. Reform of agricultural holdings was judiciously avoided (as it is the subject of a separate review). Even with that restricted approach, speakers still found plenty to speak about.
Professor Roderick Paisley of the University of Aberdeen began the symposium. He opined that the Report as a whole was thoughtful and thought provoking, noting that there is no suggestion in the Report of the general abolition of any right to succeed to land on the part of private individuals, or indeed a wider attack on the institution of private ownership of land: “We are not dealing here with the jurisprudence of the Russian or French Revolutions.”
The proposal at issue here is to tweak the law of succession, so as to equalise the treatment of moveable and heritable (immoveable) property. In Scots law a spouse/civil partner and any children of a deceased person have a right to inherit part of the moveable element of the estate (perhaps a car, investments or a portrait) even if the deceased has made a will that tries to cut such people out of the inheritance. Curiously, these are called “legal rights”. Legal rights do not apply to heritable property. This means there is no such guaranteed right to a fixed share in relation to land (and any buildings and most flora attached to land). As such, a landowner can make a bequest relating to land, and (assuming the landowner has full mental capacity) that last will and testament will indeed be the last word on the matter. That is the current position, but at Part 2, Section 6, paragraph 20 of the Report, this recommendation is made:
The Scottish Government should, in the interests of social justice, develop proposals in consultation with the Scottish Law Commission for legislation to end the distinction between immoveable and moveable property in Scotland’s laws of succession.
It can be noted that this reform would be consistent with past work of the Scottish Law Commission and would not seem to engage any ECHR issues. (The right to leave a will is not covered explicitly in the ECHR, but respect for private and family life under Article 8 and recognition of a right to possessions in Article 1, Protocol 1 is apparent and that would cover a general power to bequeath property on death.) It can also be noted that on 14 August 2014 the Scottish Government released a consultation on “Technical Issues Relating to Succession” (relating to rather unsexy matters like private international law and bonds of caution (i.e. sums of money) that some executors need to lodge). This less controversial reform might be clearing the way for more noticeable reforms in the future, but that is speculation.
What the report does not do is detail the mechanics of the proposed reform. In Professor Paisley’s view, this is not a problem, and the proposal to develop reform with the Scottish Law Commission was a “very well judged recommendation”. Paisley then set out some observations about how practice might develop in future if legal rights were extended to immoveable property, imagining a future where anti-avoidance measures may see increased uses of trusts (including “pour-over trusts”) and lifetime gifts (especially as it is tricky to imagine how any measure that sought widespread clawback of near death transactions could ever work practically). With the latter, a degree of faith might be placed in younger generations, in which regard Paisley highlighted the Biblical parable of the Prodigal Son.
Next to address succession was Viktoria Wahle of Stronachs LLP, with specific reference to the organisation of agricultural businesses. At the moment, estate planners must be mindful of the risk of heritable property becoming moveable (perhaps when it is transferred to a company or a partnership) and indeed the opportunities of converting moveable property into heritable property (normally by investment in land). On one level the reform envisaged in the Report would simplify matters and do away with this potential trap/opportunity. On the other hand, existing farming practice would be affected, and the reforms might lead to is an increased prevalence of: 1) voluntary lifetime renunciation (by a person who could claim a share, thus allowing a farm to remain whole); and/or 2) farmers having to establish an alternative means of meeting the value of legal rights claims; and/or 3) putting the farm into trust or into a company and dealing with shareholdings appropriately. All of these would be very circumstantial and (with that in mind) Wahle also queried whether there might be the option to pay any “heritable” legal rights in instalments.
Ownerless land and common good land
The third speaker was the advocate Robert Sutherland of Terra Firma Chambers. His first subject was “ownerless land”, that being the term adopted in the Report. This was what the Report noted at Part 2, Section 7, paragraph 10:
The Review Group considers that the expansion of land registration is likely to result in surviving examples of common land and commonties coming to light. The Group recommends that these distinctive forms of land tenure should be identified and safeguarded as part of modernising Scotland’s system of land ownership.
“Ownerless” is an interesting word to use, especially as there is not much of Scotland’s terrain that is likely to be completely ownerless. There may be some common land and commonties remaining in Scotland (those rare areas being specifically identified as worthy of protection in the Report, at Part 2, Section 7, parahraph 11), but what of land that an owner wants shot of? Normally the Crown has a right to abandoned property in Scotland, but – to add another question – what happens when that land brings onerous obligations? This is a topical area land, in light of the SEPA v Joint Liquidators of Scottish Coal case (2014 SLT 259, when there was an unsuccessful attempt to disclaim environmentally sensitive land). As Sutherland pointed out clause 48 of the Community Empowerment Bill appears to deal with abandoned land (by giving communities a right to acquire land that is “wholly or mainly abandoned or neglected”), but such land is not technically abandoned in the sense that property lawyers would use that term. Indeed, that bill is to do with land that is neglected or underused, not land where an owner has actively sought to walk away, so it expressly does not deal with Crown rights to bona vacantia (certain unowned things) or its role as ultimus haeres (the ultimate heir).
Sutherland then addressed the rather fraught issue of common good land, with reference to sections 73-75 of the Local Government (Scotland) Act 1973 which deals with disposal and appropriation of such land by a local authority. No attempt to analyse that regime will be made here, other than to note it has played a role in relation to school projects at Portobello and Barrhead. The Report did not directly address this issue, except within a wide call for modernization, noting the following at Part 3, Section 14, Paragraph 21:
The Review Group considers that the position over Common Good lands should be improved to ensure they are adequately safeguarded and appropriately managed. The Group recommends that a new statutory framework should be developed to modernise the arrangements governing Common Good property.
Some of this is to be addressed in the already mentioned Community Empowerment Bill. If you wish to contribute to that process, you can respond to the Local Government and Regeneration Committee’s call for written evidence.
Alasdair Sutherland, also of Terra Firma Chambers, was the next to speak, on the not insubstantial matter of planning law. As with the niceties of common good law, no attempt will be made to analyse planning law as a whole here, but Sutherland highlighted the following from the Report (Part Five, Section 20, paragraph 34):
…while the planning system has significant power in preventing unwanted development…its ability to generate desirable development, at least on its own, is really quite limited.
Nothing to see here, then. Well, not quite. There are a number of proposals in the Report that may form part of the urban renewal mix, with the potential new tools including further community rights to: register interest in land (as per the current Community Empowerment Bill), a right request a Compulsory Purchase Order; a new local authority power to issue a compulsory sale order (i.e. force a landowner to sell) and the potential for Urban Partnership Zones. Alasdair Sutherland ended his presentation with some muses about alternative dispute resolution methods and protective cost orders, as potential further innovations Watch this (urban) space.
Land reform might conjure images of crofters or agricultural tenants, but it is equally applicable to the private rented sector. This was demonstrated by Dr. Douglas Bain of the University of Aberdeen and Catherine Bury of Ledingham Chalmers, who considered the proposed introduction of longer and more secure tenancies in the private rented sector. This was covered in Part Five, Section 22 of the Report, with paragraph 24 providing the following:
The Review Group considers that, to address housing need and the changing nature of the private rented sector, a change is required in the nature of tenancy arrangements within the sector. The Group recommends that the Scottish Government introduces longer and more secure tenancies in the private rented sector.
Channelling Bob Dylan’s song “Dear Landlord”, Bury and Bain gave an overview of the post-WWII tenancy regime, which finally pitched from largely pro-tenant legislation in 1984 to the introduction of the current landlord-friendly legislation in 1988, which gave is the prevailing short assured tenancy. With increasing regulation of private sector landlords (think HMOs), and two very important new statutes from this very year that affect matters leasing (The Housing (Scotland) Act 2014 and the Tribunals (Scotland) Act 2014), perhaps we are already seeing a re-balancing towards the tenant. Will the recommendation of the LRRG provide the impetus for the see-saw to tip back in the direction of the tenant completely?
An upper limit to ownership
Saving the best, or perhaps the most controversial, for last, Dr. Michael P G Smith of the University of Aberdeen critiqued the most eye-catching proposal of the LRRG, namely that there should be an upper limit on the amount of land in Scotland that can be held by one owner or single beneficial interest. In addition to his legal knowledge, one of the reasons I was keen for Smith to participate was to offer a counterbalance to the Report, as he set up his talk as being from the perspective of a lawyer advising an existing landowner client (and considering what steps that landowner might wish to take). He began his talk with a disclaimer that he was not representing Scottish Land and Estates, although his talk had been informed by them.
The following text is found at Part Six, Section 24, Paragraph 29:
The Review Group considers that there should be an upper limit on the total amount of land in Scotland that can be held by a private land owner or single beneficial interest. The Group recommends that the Scottish Government should develop proposals to establish such a limit in law.
No steer is given as to what this upper limit should be (either as a percentage of Scotland or a certain amount of acres). It is also silent as to whether or not the cap should be retrospective: Smith rather candidly admitted the cap would be of nugatory effect if it was not.
This is what Scottish Land and Estates said about the proposal.
We cannot see what the group is really trying to achieve with recommendations such as capping the amount of land anyone can own. The group is confusing the scale of ownership with appropriate land use. Someone owning 20 acres around a village can have much more of a monopoly of control over community land use in the local area than someone with thousands of acres of hill, rock and bog.
Some of those themes were addressed by Smith, who also added a strong critique about some of the assumptions that seem to have been made in the Report and perceptions about monopolies. [Chairperson’s note: European competition law prevents the abuse of a dominant position in the marketplace. No comment is made here as to whether or not this is an exact analogy for Scotland’s land.] Smith also pondered what sort of compensation might be payable for land, noting (quite correctly) that any proposal to offer nil or low compensation to landowners facing a deprivation (i.e. a loss of some of their property) would be open to challenge on ECHR grounds.
The Report is not legislation, nor is it even a commitment to legislation. What it is is fuel for legislation. Prior to that legislation, there will be a little conversation, even if Elvis Presley would prefer to move straight to the action phase.
At one level, if the LRRG had provided absolutely nothing to talk about, it would have failed. Whilst the LRRG’s Interim Report may have been criticised by some for not proposing very much, the Final Report has succeeded by the simple fact it has stimulated dialogue. It now remains to be seen what will happen in terms of representations to, and legislation emanating from, the Scottish Parliament. Perhaps the University of Aberdeen will play host to an event reflecting on a new Land Reform (Scotland) Act in the not too distant future. Until then, I hope this symposium has added to the conversation. Do feel free to add further to the conversation by commenting below.