Scottish Government

6. CROFTING REGULATION

6.1 Background

6.1.1 The CoIoC recommended that there should be no changes made to the fundamental rights given to crofters in the 1886 Act, namely security of tenure, succession, fair rents and the value of their improvements. However, they argued that these rights should only be enjoyed by those crofters who are resident on or near their croft and who use their land actively or beneficially. The ColoC received a consistent message throughout their consultation with crofting communities that there was a need for better regulation of both neglect and absenteeism.

6.1.2 The CoIoC recommended that this should be achieved by tying all houses to residency through a real burden that would be deemed to be included in the conveyancing when next assigned or purchased. An enhanced burden would be attached to the property when a croft was transferred that would tie the new owner not only to occupancy but also to working the land.

6.1.3 In its response, the Government agreed that the fundamental rights of crofters should be protected and that more rigorous action is needed to tackle absenteeism and neglect of croft land. However, rather than using the proposed real burden suggested by the CoIoC, the Government proposed to review the existing provisions in the Crofters Acts relating to residency and use of croft
land to ensure that the Crofters Commission could take more effective action in these areas. It suggested that the proposed Area Committees should be able to take swifter action to end the tenancies of those who are failing to meet the residency requirement or use the land beneficially. Where a crofter is an owner-occupier and is failing to meet the residency requirement or to use the land beneficially, the Area Committee should be able to assign a tenant to the owner-occupier. This would achieve the aims of the Committee's recommendation in relation to croft land.

6.1.4 In order to facilitate more effective action on addressing absenteeism and neglect, the Government also stated that it would consider giving greater powers to the regulator to divide crofts so that crofts that are not being worked can be detached from croft houses that are being used as main residences in order to increase the availability of crofts for new entrants and young people.

6.1.5 In addition to taking more effective action on absenteeism and neglect, the CoIoC recommended that owner-occupiers and tenants should be treated alike, simply as crofters, in all aspects of crofting. The Government agreed that owner-occupiers and tenants should be treated alike and stated that it would review the legislation to ensure this is the case.

6.1.6 The CoIoC also recommended that new legislation be developed to replace, simplify and clarify the accumulated laws which set the framework for crofting today.

6.1.7 The Government was sympathetic to the aims of this recommendation. However, in view of the complexity of crofting law, the process of simplification would, if properly undertaken, significantly delay the implementation of policy proposals. Therefore, the Government proposed a twin-track approach. First, new legislation would be needed to implement some of the policy proposals outlined in the Government response. The Government therefore proposed to consult in 2009 on a substantive draft Bill that would amend existing legislation, which is the subject of this consultation document. Secondly, it agreed to give further consideration as to how best crofting law might be simplified and clarified, and on what timescale.

6.2 Issues for consideration

6.2.1 Defining an owner-occupier

6.2.1.1 The Government agreed that owner-occupiers and tenant crofters should be treated alike in crofting and has, therefore, reviewed current legislation to see how this might be achieved. It has suggested provisions in the draft Bill to ensure that, so far as possible, tenants and owner-occupiers are treated equally. In order to distinguish between owner-occupiers and tenant crofters it was evident that a robust definition of an owner-occupier was required. Furthermore, it would be important to distinguish between an owner-occupier and a landowner who does not occupy his croft but lets crofts to a tenant. Currently, an owner-occupier is considered to be a landlord of a vacant croft and, as such, could be invited to submit letting proposals for the croft at any time under the vacant crofts provisions in the Crofting Acts. The draft Bill addresses the anomaly of an owner-occupier and, rather than amending the vacant croft provisions in the Act, makes new provisions specifically for owner-occupiers.

6.2.1.2 The new definition of an owner-occupier is contained in the draft Bill and will help to ensure that the statutory requirements to be resident on, or within 16km of, the croft and to put the croft to some form of productive use can be applied to both tenant and owner-occupier crofters.

6.2.2 Treating tenant and owner-occupier crofters alike

6.2.2.1 The draft Bill contains sections that will attach to owner-occupier crofters a number of provisions in the Crofting Acts that currently only apply to tenant crofters. This will help to ensure that both tenant crofters and owner-occupier crofters are treated in a similar way. Because of the differences in the rights between tenants and owners of land, the processes for enforcement are slightly different for owner-occupiers than for tenants. The effect of the draft Bill is to more clearly define when the Crofting Commission would be expected to use the powers provided for vacancy provisions in the Crofting Acts.

6.2.2.2 In general, a tenant crofter currently faces the risk of having his tenancy terminated for a breach of statutory requirements and the croft would then be declared vacant, which would trigger the requirement for the landowner to submit proposals for re-letting the croft. It is proposed that, whilst there is no tenancy to terminate in respect of an owner-occupier, if an owner-occupier fails to adhere to the provisions identified below, the croft would be declared vacant and the owner-occupier crofter would face the risk of being required to let to a tenant-occupier crofter under the vacancy provisions.

6.2.2.3 It is proposed that owner-occupiers should be subject to the same requirements as tenants in the following areas:

• Working the land
• Residency
• Croft division
• Croft letting.

6.2.2.4 Therefore, where an owner-occupier fails to meet the requirements set out in the Crofting Acts to put the land to some form of purposeful use, the Commission would invite the owner-occupier to submit letting proposals. Where he failed to do this, the Commission would invite applications for the tenancy of the croft.

6.2.2.5 Where an owner-occupier fails to meet the requirements set out in the Crofting Acts to be resident on or within 16km of the croft, the Commission would invite the owner-occupier to submit letting proposals. Where he failed to do this, the Commission would invite applications for the tenancy of the croft.

6.2.2.6 At present, tenants are required to seek the consent of the Commission before they are able to divide the croft. Provisions are included in the draft Bill that would also require owner-occupiers to seek consent before they can divide the croft. If ownership of part of a croft is to be transferred to another person then the croft must first be divided and the owner-occupier must apply to the Commission for consent to the proposed division. Failure to do so would render any transfer of ownership null and void.

6.2.2.7 In addition to requiring owner-occupiers to apply to the Commission for consent to divide, the draft Bill contains provisions that would give the Commission the power to divide crofts. The advantage of this power is that it would enable the Commission to take more effective action where crofts are not being worked or where crofters are absent. For example, where a crofter is meeting the residency requirement but is unable to work the land and has refused to sublet the croft to someone who will use the land, then the Commission would be able to divide the croft to allow the crofter to remain in his home. The Commission would then terminate the tenancy of the newly created bareland croft and invite the landowner to submit proposals for letting the newly created bareland croft. This would help to free up unworked crofts for new entrants into crofting. It is proposed that there should be a right of appeal to the Land Court against any decision by the Commission to divide a croft at its own initiative.

6.2.2.8 At present, tenant crofters can sublet a croft to another person for a period not exceeding 10 years, if they obtain the consent of the Commission. It should be possible for an owner-occupier to "sublet", although there is no principal tenant in place. Therefore, an owner-occupier could let a croft, or part of the croft, and that person would not be considered a "crofter" and therefore not gain the rights of a crofter. It is important to distinguish between an owner-occupier who "sublets" his croft and a landowner who lets the croft to a tenant. It is not intended that landowners should be able to "sublet" crofts.

6.2.3 Effective action against absenteeism

6.2.3.1 In addition to ensuring that existing working the land and residency requirements apply equally to both tenant and owner-occupier crofters, it was clear from evidence given to the CoIoC that more effective action was needed to address absenteeism. Some respondents (just under 20%) felt that absentee crofters should not be defined as crofters and nine out of every ten responses to the CoIoC's call for evidence addressed absenteeism. The Government has considered the absentee provisions in the Crofting Acts carefully and has made provision in the draft Bill, which would require the Commission to take action to address absenteeism unless there is good reason not to. The policy attempts to remedy absenteeism by agreement, failing which action must be taken to resolve the issue.

6.2.3.2 In order to ensure that action against absenteeism is flexible and fair, the draft Bill contains a provision which enables crofters to apply to the Commission for approval to be absent if they have a good reason. Action on absenteeism would be delegated to Area Committees to allow for greater consideration of the circumstances associated with each case. It is proposed that Area Committees will develop policies to decide what constitutes a good reason for being absent. It is suggested that such exceptions might include:

• Short to medium term periods away from the croft due to employment, such as working on an oil rig, the Merchant Navy or abroad
• Undertaking further or higher education that requires them to be away from the croft
• Prolonged illness requiring treatment away from the croft.

6.2.3.3 Where the Commission considers a crofter (tenant or owner-occupier) to be absent, it is proposed that the Commission would write to the absentee crofter and invite them to either submit an application to be absent, an application for consent to sub-let or provide a written commitment that they will meet the residency requirement. If the crofter fails to respond or to fulfil the commitment given to meet the residency requirement, then the Commission would take action as described above.

6.2.3.4 Provision has also been made to amend family assignation provisions in the current crofting act to the effect that this will not be automatic where the proposed assignee or transferee will be absent. It is proposed that the agreement of the Commission will now be required to any proposed assignation. This is to help ensure that the problem of absenteeism is not passed from one crofter to another.

6.2.3.5 The Crofters Commission has indicated that one of the difficulties they face when taking enforcement action are delaying tactics, which are designed to frustrate the Commission's efforts to take effective action. For example, in some cases where they have required a landlord to submit re-letting proposals for a vacant croft, numerous unsuitable tenants are proposed. Furthermore, the Crofting Acts have no clear timings between the landlord submitting letting proposals and the Commission's approval. Therefore, the draft Bill includes a provision to limit the number of letting proposals submitted by a landlord to three, within a timescale of two months, with a further month to enable the Commission to consider the proposals.

6.2.3.6 Provision has also been made to amend family assignation and transfers by executors to the effect that this should not be automatic where the proposed assignee or transferee will be an absentee. In all cases, assignation should only be permitted where the proposed assignee or transferee will meet the residency requirement, as well as any other statutory criteria. It is considered that the criteria for assessing family and other assignations should be the same and that the Commission should be satisfied that the proposed person will meet the requirements of a crofter.

6.2.4 Working the land provisions

6.2.4.1 One of the statutory conditions is that crofters must cultivate their land or put it to purposeful use. The Government response to the CoIoC report agreed to review existing legislation to ensure that the regulator can take more effective action to ensure that this requirement is enforced. Land is our most basic natural resource and it is important to ensure that it is put to productive use in order to achieve the goal of sustainable economic growth.

6.2.4.2 Currently, the Commission does not have the power to take direct action against a crofter who fails to work the land unless it receives a complaint regarding breach of statutory conditions or receives the consent of the landlord to take action in respect of misuse or neglect. The draft Bill contains a provision which would enable the Commission to take action where land is not being put to productive use without requiring a complaint to have been made or requiring the consent of the landlord.

6.2.4.3 Where the Commission identifies a croft that is being misused, is being neglected or is not being put to any purposeful use, then the Commission would be required to give written notice to the crofter of this determination. The crofter would be required to submit plans for cultivating the croft or putting the croft to some purposeful use within one month of receiving notification from the Commission. Alternatively, the crofter could make an application to sublet the croft. Any plans would be required to be approved by the Commission and include actions against which progress could be monitored. In the event that a crofter fails to produce a plan or to implement the plan, the Commission would take action. For tenant crofters, it would make an order terminating the tenancy and declaring the croft to be vacant. Landowners would then be invited to submit proposals for re-letting the croft. For owner-occupiers, the croft would be declared as being vacant and the owner-occupier would be invited to submit proposals for letting the croft.

6.2.4.4 A crofter can currently opt out of cultivating their croft or from putting it to purposeful use if they are conserving the natural beauty of the locality of the croft or the flora and fauna of a croft. The Government accepts that a crofter should be able to refrain from an activity for the purpose of conserving the flora and fauna of a locality and conserving the natural beauty of the croft, but considers that the crofter should be required to demonstrate that this activity is planned and managed if necessary. It is considered that, in some cases, this is currently being used as a reason for doing nothing with the croft. Where a crofter can demonstrate that such activity is planned and managed, then the Commission would not take any action against the crofter.

6.2.5 Consolidation of Crofting Acts

6.2.5.1 The CoIoC stated that new legislation was needed to replace, simplify and clarify the accumulated laws that set the framework for crofting today. The Government agreed to consult on a draft programme Bill that would amend existing legislation in 2009 and to give further consideration on how best to simplify and clarify crofting law.

6.2.5.2 Provision has been made in the draft Bill for measures that would facilitate easier consolidation of crofting law. It has also been agreed that crofting law should be a target for consolidation in the next Parliament, which will achieve the goal of simplifying and clarifying the accumulated laws for crofting.

6.2.6 Conclusion

6.2.6.1 The proposals contained in the draft Bill, to enhance the regulatory powers of the Crofting Commission, are key in enabling the Commission to take effective action against absenteeism and the neglect of crofts. The provisions contained in the draft Bill have been developed in response to the very real concerns voiced by crofting communities to the CoIoC. These provisions have been designed to be fair and flexible, taking into account the personal circumstances of the tenant or owner-occupier crofter. They aim to strike a balance, ensuring that the fundamental rights given to crofters in the 1886 Act are retained whilst enabling the regulator to take effective action against those who neglect their responsibilities.

6.3 Regulatory and Equality Impact Assessment

6.3.1 Issue

6.3.1.1 The final report of the ColoC recommended that owner-occupiers and tenant crofters be treated alike, simply as crofters. It also argued that there was a need for better regulation on both neglect and absenteeism.

6.3.2 Objective

6.3.2.1 The objective of these provisions is to ensure that owner-occupiers and tenants are treated more equally and that more effective action is taken to address absenteeism and working the land.

6.3.3 Potential Risks

6.3.3.1 Potential risks associated with these proposals include:

• Confusion over the rights of owner-occupiers and tenant crofters under the new legislation
• High increase in enforcement work for the Crofting Commission following implementation of changes
• Increased level of complaints following more effective action by Commission to address absenteeism or working the land issues.

6.3.4 Options

6.3.4.1 In broad terms, three options are available:

(i) Do nothing;

(ii) Amend legislation to address the key issues detailed above; or

(iii) More rigorous enforcement of existing legislation.

6.3.5 Benefits

6.3.5.1 Option 1 involves no change and would bring no benefits. Current problems would remain unresolved leaving a number of difficulties such as high levels of absenteeism unresolved. Also, owner-occupiers would remain undefined and potentially open to vacancy action at any time.

6.3.5.2 Option 2 provides an opportunity to address directly these issues through legislation. By defining owner-occupiers and applying the same criteria for owner-occupiers and tenants, it will be possible to ensure more equal treatment for tenants and owner-occupiers. Furthermore, amending legislation would require the Commission to take action to address absenteeism or misuse or neglect of croft land, rather than at present where the Commission may take action.

6.3.5.3 Option 3 would go some way to delivering the objectives but the Commission is currently limited in what it can do to take action in respect of neglect. For example, at present it can only act if it receives a complaint or gains the approval of the landowner. There is no guarantee that a voluntary approach would be as effective as a legislative requirement.

6.3.5.4 The Government decided to proceed with Option 2 and its proposals are set out in section 6.2 of this document.

6.3.6 Impact on stakeholders

Crofters

6.3.6.1 The impact on crofters will be greatest where they are either absent or are failing to put the land to some purposeful use. Where crofters are meeting these requirements, the proposals will have no impact. It is considered that owner-occupier crofters will benefit from a robust definition of their status and will no longer be regarded as occupiers of a vacant croft. This will provide reassurance that the Commission cannot, at any time, invite them to submit letting proposals for their croft. Treating owner-occupiers and crofting tenants equally will create a level playing field among crofters and ensure that decision-making is, so far as possible, consistent irrespective of whether the crofter is an owner or a tenant.

6.3.6.2 Crofting will benefit from more direct action by the Commission in addressing absenteeism, misuse and neglect cases as this will result in better use of croft land and contribute to the sustainability of crofting as a whole.

The Crofters Commission

6.3.6.3 As a result of the legislation, it is expected that the Crofting Commission will be more effective in addressing absenteeism, misuse and neglect issues. A more pro-active approach will increase the workload of the Commission in the short term in addressing known problems, but the deterrent effect should, in the longer term, result in less cases of absenteeism and neglect thus contributing to more sustainable and successful crofting communities. The increased focus on regulatory action is being offset to some extent by the removal of other functions from the Crofting Commission.

Scottish Land Court

6.3.6.4 A more pro-active approach by the Commission may result in an increase in appeals to the Land Court, but this will primarily depend on the number of cases arising. It is hoped that a solution can be agreed in most cases without going to court. Furthermore, the new process that enables the Board of the Crofting Commission to review decisions of Area Committees may help to reduce the number of cases going to the Scottish Land Court.

6.3.7 Costs

6.3.7.1 No additional costs are envisaged for owner-occupier or tenant crofters complying with the residency and working the land requirements. Where the crofter breaches statutory requirements, they may face legal costs associated with any action taken against them.

6.3.7.2 In taking a more pro-active approach, additional staff costs will be incurred by the Commission in the short term to address known problems. £100K of additional resource has been made available for the Commission to take action to address absenteeism in the short-term. However, this is likely to be balanced in the longer term by the expected deterrent effect of the legislation.

6.3.7.3 As indicated above, additional costs to the Land Court will depend on the number of cases arising but these are not expected to be significant.

6.3.8 Small Firms Impact Test

6.3.8.1 It is not considered that these proposals will have an impact on small businesses.

6.3.9 Competition Assessment

6.3.9.1 It is not considered that these proposals will create any comparative advantage or disadvantage within the sector.

6.3.10 Enforcement and Sanctions

6.3.10.1 The legislation proposes greater flexibility for the Crofting Commission to use existing sanctions to address absenteeism, misuse and neglect. Therefore, no new sanctions are being proposed although the legislation provides for the easier application of sanctions.

6.3.11 Equity and Fairness

6.3.11.1 There are no barriers of race, age, sex, income, religion, sexual orientation or disability. The proposals to treat owner-occupier and tenant crofters alike are considered to be fairer than at present as this will provide, so far as possible, similar status in that both will be regarded as crofters. The proposals relating to the division of crofts are considered fairer than, for example, removing the owner-occupier from the entire croft. The inclusion of the right to appeal the Commission's decision provides an opportunity to contest that decision and is considered to be fair. Inviting the owner-occupier or tenant crofter to first submit tenancy proposals is considered fairer than the Commission imposing a new tenant on the croft as a first option.

6.3.11.2 In addressing absenteeism, in order for the legislation to be applied fairly and reasonably, proposals include an opportunity for a crofter to apply for approval to be absent for a certain period for good reason, such as short to medium periods away for employment, educational purposes or through prolonged illness requiring treatment away from the croft. However, failure to respond, or to fulfil the commitment to meet the residency requirement, will result in the Commission taking action to identify a suitable tenant. The proposals to apply the same criteria for assessing family and non-family assignations and transfers will also provide greater equality.