Recent implementations to Crofting Law Reform: Update

3 July 2011 

The new Crofting Reform (Scotland) Act 2010 is now beginning to have an impact on those who own or manage croft land. As of the 1st of July 2011, the rule on compensating a previous landlord by a crofter who has purchased their land but then wishes to sell it has changed. Prior to this, if a crofter purchased their land (as they are entitled to do so) from the landlord, they would have to pay that landlord 50% of the market value of the land, deducting the original purchase price from that figure, if a sale occurred within five years of purchase.
Now, that timescale has been significantly increased to ten years. This applies to all applications to purchase croft land made after the 1st of July – decisions taken before this date are not affected. This so-called ‘claw-back clause’ is designed to prevent the speculation of croft land that has been seen as a problem in recent years and it is hoped that the ten year period will encourage those purchasing croft land to see it as a long term commitment to that land. It remains to be seen whether this will steady the value of croft land, or if those seeking to speculate on croft land will be deterred by an extra five years before they can sell.
Another significant change that arose on the 1st of July, and linked to the issue of speculation is the ability to nominate a third party to receive the conveyance of a croft. This enabled the crofter to avoid the claw-back period, and was a loophole in the legislation that opened up following the Whitbread v MacDonald case. Now, that loophole has been closed; a crofter can only nominate a family member to receive the conveyance, preventing a crofter from nominating a developer who may have paid them much more than the crofter would have paid the landlord.
With such significant changes taking effect in crofting legislation, it is important to understand how this could affect you. With Brian Inkster in Glasgow and Eilidh Ross in Inverness, we are well placed to advise you on how these changes may impact you and your croft. Please contact us for advice.

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