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Land Reform (Scotland) Act 2016

Procedure following consent

Section 61 – Effect of Ministers’ decision on right to buy

284.Subsection (1) gives Ministers power to make regulations prohibiting certain persons from transferring or otherwise dealing with the land, or tenant’s interest where appropriate, in respect of which an application under section 54 has been made.

285.Subsection (2) sets out matters that the regulations under subsection (1) may include.

286.Subsection (3) provides that Ministers may make regulations to suspend rights over land in respect of which a Part 5 application has been made.

287.Subsection (4) sets out that these regulations may provide for rights which will not be suspended, as well as rights which will not be suspended in certain circumstances.

288.Subsection (5) provides that nothing in Part 5 prejudices the position of creditors seeking to prevent the disposal of heritable property by a debtor by means of inhibition, action of adjudication or any other diligence.

Section 62 – Confirmation of intention to proceed with purchase and withdrawal

289.Section 62 sets out the procedure which follows the consent by Ministers to the exercise of a right to buy.

290.Subsection (1) provides that, where an application made under section 54 does not nominate a third party purchaser, the right to buy can only be exercised by the Part 5 community body if that body notifies the Scottish Ministers, the owner of the land and, where the application is to buy the tenant’s interest, the tenant, of its intention to proceed within 21 days of receiving the notice of the valuation under section 56(13).

291.Subsection (2) provides that, where an application made under section 54 nominates a third party purchaser, the third party’s right to buy can only be exercised if both the Part 5 community body and the third party purchaser notify the Scottish Ministers, the owner of the land and, where the application is to buy the tenant’s interest, the tenant, of intention to proceed within 21 days of receiving the notice of the valuation under section 56(13).

292.Subsection (3)(a) provides that where a Part 5 community body does not nominate a third party purchaser, the Part 5 community body may withdraw its right to buy application at any time up to receipt of the valuation, by notice in writing to Ministers. Subsection (3)(b) allows the Part 5 community body to withdraw a confirmation of intention to proceed it has previously given, by giving notice in writing to Ministers.

293.Subsection (4) provides that, where an application nominates a third party purchaser, up until receipt of the valuation only the Part 5 body may withdraw the application. After receipt of the valuation, either the Part 5 body or the third party purchaser may withdraw a confirmation of intention to proceed it has previously given, by giving notice in writing to Ministers.

294.Subsection (5) provides that the Scottish Ministers must acknowledge receipt of a notice withdrawing an application, a notice of intention to proceed or a notice withdrawing the intention to proceed and send a copy of the acknowledgement to the Keeper, the owner of the land and, where the application is to buy a tenant’s interest, the tenant.

Section 63 – Completion of purchase

295.Section 63 deals with the purchase of land following Ministers giving consent to a Part 5 right to buy application.

296.Subsection (1) provides that the Part 5 community body, or third party purchaser where relevant, is responsible for preparing the documents necessary to effect the transfer of the land or assignation of the tenant’s interest, for ensuring that the land or interest transferred or assigned is the same as that specified in the application and for ensuring that the transfer or assignation is undertaken in accordance with any conditions specified in the consent given by Ministers.

297.Subsection (2) provides that, where the Part 5 community body, or third party purchaser where relevant, cannot comply with its duty regarding the land or tenant’s interest to be conveyed, due to the fact that all or part of the land or tenancy covered by the consent to the application is not owned or tenanted by the person named as owner or tenant in the application, then it must refer this matter to Ministers.

298.Subsection (3) provides that where a reference is made to Ministers under subsection (2) then Ministers must direct that the right to buy is extinguished.

299.Subsection (4) requires the owner of the land subject to the Part 5 right to buy to make title deeds and other documents available to, and transfer title to, the Part 5 community body, or third party purchaser where relevant.

300.Subsection (5) provides that if, within six weeks of Ministers consenting to the application to buy the land, the owner refuses or fails to make these deeds available, or if they cannot be found, the Part 5 community body, or third party purchaser where relevant, can apply to the Lands Tribunal for an order requiring the production of those documents.

301.Subsection (6) provides that the Part 5 community body may apply to the Lands Tribunal to authorise its clerk to effect the transfer of title where the owner refuses, or for other reasons fails, to do so. Where the clerk to the Tribunal does so the effect will be the same as if it were done by the owner.

302.Subsection (7) applies where the application is to buy a tenant’s interest and requires the tenant of the land subject to the Part 5 right to buy to make deeds and other documents available to and assign the interest to the Part 5 community body, or third party purchaser where relevant.

303.Subsection (8) provides that if, within six weeks of Ministers consenting to the application to buy the tenant’s interest, the tenant refuses or fails to make these deeds available, or if they cannot be found, the Part 5 community body, or third party purchaser where relevant, can apply to the Lands Tribunal for an order requiring the production of those documents.

304.Subsection (9) provides that the Part 5 community body may apply, or third party purchaser where relevant, to the Lands Tribunal to authorise its clerk to effect the assignation where the tenant refuses, or for other reasons fails, to do so. Where the clerk to the Tribunal does so the effect will be the same as if it were done by the tenant.

Section 64 – completion of transfer

305.Section 64 sets out the process for completing the transfer or assignation of a tenant’s interest.

306.Subsection (1) provides that the consideration payable for the land or tenant’s interest in respect of which the Part 5 right to buy is exercised is the value of that land or interest as assessed under section 65 by the valuer appointed by Ministers.

307.Subsection (2) provides that, subject to subsections (3) to (5), the consideration must be paid not later than six months after the date on which Ministers consented to the right to buy application under section 54.

308.Subsection (3) specifies circumstances where either this payment deadline will not apply or where an alternative deadline will apply. In particular, it allows the landowner, or tenant where the application is to buy a tenant’s interest, and the Part 5 community body, or third party purchaser where relevant, to agree an alternative payment date. It provides that, where the assessment of the valuation of the land or tenant’s interest or determination under section 66 (as the case may be) has not been completed within four months of the date that the Scottish Ministers consent to the application, then payment must be made not later than two months after the date of completion of the valuation or two months after the date when the section 66 determination is made, whichever comes later. Finally, it provides that where the valuation or section 66 determination is subject to an appeal which has not been decided within four months of the date of Ministers’ consent, payment must be paid not later than two months after the date of the decision on the appeal against the valuation or, as the case may be, not later than two months after the date of the decision on the appeal the appeal against the section 66 determination, whichever occurs later.

309.Subsection (4) specifies circumstances where Scottish Ministers may extend the final settlement date on application of any of the parties. This can be done where there is an appeal of a decision or determination in relation to a related application under section 54.

310.Subsection (5) specifies that, where the owner is unable to grant a good and marketable title to the Part 5 community body, or third party purchaser where relevant, by the date of payment, or, where relevant, the tenant is not able to assign the tenant’s interest to the Part 5 community body, or third party purchaser, as appropriate, then payment is to be made to and held by the Lands Tribunal pending either title is granted or the assignation effected or notification to the Lands Tribunal by the Part 5 community body, or third party purchaser where relevant, that it has decided not to complete the transaction.

311.Subsection (6) provides that the Scottish Ministers must within seven days acknowledge receipt of notice not to proceed under subsection (5), copying acknowledgement to the Keeper, the owner of the land, where the application is to buy a tenant’s interest, the tenant, and the Part 5 community body or, as the case may be, the third party purchaser.

312.Subsection (7) specifies that, if the consideration is not paid by the Part 5 community body, or third party purchaser where relevant, by the due date, then confirmation of intention to proceed is treated as withdrawn and so the right to buy will no longer be able to exercised (this subsection does not apply where subsection (5) applies).

313.Subsection (8) provides that, when the Part 5 community body, or third party purchaser is granted title to the land or is assigned the tenant’s interest, any heritable security which burdened the title or assignation immediately before granting of title or assignation will cease to do so once the interest of the Part 5 community body or third party purchaser is registered in the Land Register of Scotland.

314.Subsection (9) provides that a heritable security that related to land or a tenant’s interest other than that acquired through the Part 5 right to buy will continue to apply to that other land or interest.

315.Subsection (10) provides that where land is disburdened of a heritable security on purchase of the land or assignation of a tenant’s interest, then unless the creditors otherwise agree, the Part 5 community body, or third party purchaser where relevant, must pay the creditors under that heritable security whatever sums are due to them.

316.Subsection (11) provides that the Part 5 community body, or third party purchaser where relevant, must deduct any sums paid to a heritable creditor under the provisions of subsection (10) from the amount that the body is due to pay the owner or the tenant. In effect, the landowner or tenant will receive a sum for the land or tenant’s interest which will take account of the sum required to clear any securities.

Section 65 – Assessment of value of land etc.

317.Section 65 sets out the procedure for valuation of the land or tenant’s interest in respect of which a Part 5 community body, or third party purchaser where relevant, is exercising its right to buy.

318.Subsection (1) requires that the Scottish Ministers, where they have consented to right to buy application made under Section 54, must appoint a valuer to assess the value of that land or tenant’s interest within 7 days of that consent.

319.Subsection (2) provides that the validity of anything done under this section will not be affected by any failure by the Scottish Ministers’ to comply with the time limit specified in subsection (1).

320.Subsection (3) sets out the role of the valuer.

321.Subsection (4) specifies that the value of the land or tenant’s interest to be ascertained is the market value at the date Ministers consented to the application made under Section 54 to exercise the right to buy.

322.Subsection (5) defines market value as the sum of the open market value if the sale were between a willing seller and willing buyer, plus any depreciation in the value of other land and interests belonging to the seller or tenant as a result of the transfer of land or assignation of tenant’s interest, plus any disturbance to the seller or tenant resulting from the transfer or assignation.

323.Subsection (6) specifies that in arriving at the open market value for the purposes of subsection (5)(a), account may be taken of the known existence of a potential purchaser with a special interest in the property (other than the Part 5 community body or third party purchaser where relevant). It also specifies that no account shall be taken of the fact that no time was allowed for marketing the property or of the depreciation of other land or interests or disturbance.

324.Subsection (7) states that the Scottish Ministers will pay for the valuation under this section.

325.Subsection (8) requires the valuer to ask both the owner, or tenant, and the Part 5 community body, or third party purchaser where relevant, for their views in writing on the value of the land or tenant’s interest and to take these representations into account in arriving at the valuation.

326.Subsection (9) requires that where the valuer receives views from the owner, or tenant, then the Part 5 community body, or third party purchaser where relevant, must be invited to send their views to the valuer. Similarly, that where the valuer receives views from the Part 5 community body, or third party purchaser where relevant, then the owner, or tenant, must be invited to send their views to the valuer.

327.Subsection (10) requires the valuer to consider any views sent under subsection (9)

328.Subsection (11) specifies that where the Part 5 community body, or third party purchaser where relevant, and the owner have agreed the valuation, they must notify the valuer in writing of that valuation.

329.Subsection (12) specifies that where the Part 5 community body, or third party purchaser where relevant, and the tenant have agreed the valuation, they must notify the valuer in writing of that valuation.

330.Subsections (13) and (14) provide the parties the appointed valuer must notify of the valuation. This must be done within eight weeks of the valuer being appointed or within a longer period set by Ministers, as requested by the valuer.

331.Subsection (15) sets out that the validity of anything done under Part 5 is not affected by a failure by the valuer to comply with the time limit.

Section 66 – Acquisition of interest of tenant over land: allocation of rents etc.

332.Section 66 sets out the implications of the exercise of the right to buy where the application to purchase a tenant’s interest does not apply to the entirety of the land that the tenancy relates to.

333.Subsection (1) specifies that the valuer will consider and determine any questions as to the allocation of rents or rights and obligations generally payable or receivable under the tenancy.

334.Subsection (2) provides that the determination will be as the valuer considers to be equitable in all the circumstances.

335.Subsection (3) provides that the valuer must notify the Part 5 community body, the third party purchaser where relevant, and the tenant of the valuer’s determination.

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