May consultations: The Housing (Scotland) Bill and Land Reform (Scotland) Bill

May 7, 2024

May sees the closure of two significant Scottish Government consultations, with potential impact on the real estate sector.

The Housing (Scotland) Bill was published on 27^th March and introduces reforms of both the social and private rental sector. It is a hefty piece of proposed legislation, divided into seven parts.

The Bill includes:

• powers for the Scottish Ministers to designate rent control areas on the recommendation of local authorities;
• limits on the frequency of "in tenancy" rental increases and also controls on rental increases between tenancies;
• new rights for tenants (including to make changes to the rented property and request to keep pets); and
• new duties on local authorities, social landlords and relevant public bodies to help tackle homelessness.

Additionally, local authorities will be obliged to review the rental conditions within their area at least every five years. The First Tier Tribunal will be duty bound to consider whether it would be reasonable to delay the ending of a tenancy under an eviction order. The Tribunal should consider matters such as financial hardship and disruption to schooling, which may be avoided by a delay.

Consultation on the Bill closes on 17 May.

The Bill is here and Explanatory Notes are here.

Consultation is also taking place on the Land Reform (Scotland)Bill, which was introduced on 13^th March, and on which the Scottish Government is consulting until 21 May.

Among its aims, the Bill reforms the law around large landholdings (defined as a contiguous area of land (in single or composite ownership) which exceeds 3,000 hectares or 1,000 hectares depending on the provision). The Bill introduces a number of far-reaching measures, including reform of the community right to buy and the introduction of "lotting decisions."

Community right to buy

Sales involving part or the whole of holdings that exceed 1,000 hectares will be prohibited until an application is made to the Scottish Ministers. The Scottish Ministers must then fulfil certain publicity and notification duties to ensure any interested communities have the opportunity to register their interest prior to completion. This prohibition applies to transfers of any part of such landholdings, so sales of small plots of land will also be caught.

Lotting decisions

Separately, the Scottish Ministers are empowered to make lotting decisions. This provision applies to transfers of land exceeding 1,000 hectares or 50 hectares if cumulatively more than 1,000 hectares of the holding are on the market. Again, transfers will be prohibited until the Scottish Ministers have decided whether transfer in smaller lots is more likely to lead to land use which might make a community more sustainable. If so, they may determine that land must be sold in predetermined lots.

It is worth noting that both the extended community right to buy and the prohibition on transfer without a lotting decision are subject to the existing exemptions under s40(4) of the Land Reform Scotland Act 2003. This means that, for example, transfers as part of a divorce settlement or insolvency proceedings (among others) would not be affected.

The Bill is here and Explanatory Notes are here.

It remains to be seen whether the departure of the Scottish Green Party from the Scottish Government will have an impact on the approach taken in these Bills.