25 April 2012

S4M-02682 Long Leases (Scotland) Bill: Stage 1 [Opening Speech]

The Deputy Presiding Officer (John Scott): The next item of business is a debate on motion S4M-02682, in the name of Stewart Stevenson, on the Long Leases (Scotland) Bill. As we have quite a bit of time in hand for the debate, interventions will be welcomed.


The Minister for Environment and Climate Change (Stewart Stevenson): I look forward with eager anticipation to the thoughtful and helpful interventions that members from around the chamber will make.

The bill that I bring to Parliament today will convert ultra-long leases—that is, leases of more than 175 years that have more than 100 years left to run—to ownership. It will implement the final report in a series of reports by the Scottish Law Commission on modernising property law in Scotland. Previous work included the abolition of feudal tenure.

In its report on the conversion of long leases, the commission outlines why the legislation is necessary. In paragraph 1.1, it says that the report

“seeks to apply to certain types of long lease the principle of conversion already applied to feus by the Abolition of Feudal Tenure etc. (Scotland) Act 2000.”

In paragraph 2.4, when discussing the conversion of ultra-long leases, it says that

“A pseudo-feu should be treated in the same way as the real thing”,

and, in paragraph 2.5, it says that

“In fact the difficulties with leases extend beyond those with feus. Because ultra-long leases are relatively rare, and concentrated within small geographical areas, they are unfamiliar to many legal practitioners. The result is often an increase in transaction costs when the property comes to be sold.”

In its first session, Parliament passed the Abolition of Feudal Tenure etc (Scotland) Act 2000. That landmark legislation affected property throughout Scotland. By comparison, we estimate that the bill will cover about 9,000 ultra-long leases. However, the Scottish Law Commission has said that the difficulties with ultra-long leases are even more significant than those with feus. Parliament has the opportunity to deal with leases that can, in individual cases, give rise to more problems than feus would have done.

I have mentioned a number of the key points in the bill. There are also provisions on compensatory and additional payments to landlords for the loss of rights. It will be possible for some leasehold conditions to become real burdens in the title deeds. Landlords will be able to take steps to preserve sporting rights in relation to game and fishing, and tenants will be able to opt out of converting to ownership, if that is their wish. The bill also deals with long-standing issues around what are known as Blairgowrie leases, which are a perfect example of the particular and localised complexities that arise in this area of our land ownership law.

Annabelle Ewing (Mid Scotland and Fife) (SNP): Will the minister clarify what a Blairgowrie lease is, for the benefit of those of us who do not know what such leases involve?

Stewart Stevenson: The Blairgowrie lease is a local form that has a high degree of informality but is nonetheless capable of being implemented in law. Some people have said that such leases have been used for many years as a mechanism for people in Blairgowrie to play mischief with people from elsewhere who make purchases. There is broad consensus that action is needed, and the constituency member, who spoke to me about the matter recently, is anxious for it to be resolved by the passage of the bill.

I turn to the history of the proposed legislation. This is the second time that such a bill has been considered by Parliament. The Justice Committee in the previous session of Parliament published a stage 1 report on the previous bill, but that bill fell when Parliament was dissolved for the Scottish elections in May last year. We have made amendments to reflect that committee’s report. In particular, we added an exemption for harbours, clarified the exemption for pipes and cables—the issue of wayleave—and exempted leases in which the annual rent is in excess of £100. We have also dealt with the issue of variable rental so that we will not catch leases whose value is, in effect, more than £100 a year but in which the rent is paid in a pattern that does not necessarily make that clear.

I am grateful to the Rural Affairs, Climate Change and Environment Committee, as the lead committee, and to the Subordinate Legislation Committee and the Finance Committee, for the scrutiny that they carried out. Paragraph 54 of the lead committee’s report, on leases in which the landlord retains a significant interest, notes that evidence was taken in relation to variable rental. In the light of that evidence, the Government intends to lodge an amendment at stage 2 to deal with certain cases in which the rent has been varied.

Paragraph 84 of the report notes that witnesses made points about updating the land register.

Alex Fergusson (Galloway and West Dumfries) (Con): The minister mentioned that a bill was introduced in the previous session of Parliament. The question of registration was addressed in that bill. Why has there been a change of heart in the current bill?

Stewart Stevenson: I have a little more to say about that; I will, perhaps, expand on it in the light of Alex Fergusson’s question.

As the report notes, Registers of Scotland has decided not to carry out a bespoke exercise to update the land register as a result of the bill as it now stands, because updating the land register is not required for the bill to work. Section 4 provides that, on the appointed day, a qualifying lease will convert to ownership. That will happen independently of any action that is taken by Registers of Scotland.

It was mentioned in evidence to the lead committee that there should be a mechanism whereby the register is corrected on application, for a fee. In fact, it will be possible for those who have an interest in a lease that converts to ownership under the bill to make an application for the register to be updated, and that application can be made at any time. It is worth saying that Registers of Scotland, too, will undertake work on a related piece of legislation that touches on this issue and to which I will return in a minute or two. It is therefore easier, more practical and of lower cost to deal with the issue in this way.

A number of events may lead to information in the land register being updated. In particular, information will be updated in the land register when a property transaction takes place. That would include a sale, but it could also include the granting or discharging of a standard security over the property. If the property is recorded in the register of sasines, the former tenant could apply for voluntary first registration in the land register and pay a registration fee at the outset.

The Government and Registers of Scotland recognise the value to Scotland and the Scottish economy of keeping the land register up to date. That brings me to the Land Registration etc (Scotland) Bill, which will implement another Scottish Law Commission report and which is designed to improve the system of land registration in Scotland. If Parliament agrees to the general principles of the Long Leases (Scotland) Bill, my officials will work closely with Registers of Scotland on implementing it and will take every opportunity to ensure that the land register is as up to date as possible. The two bills will, to an extent, work in tandem. In dealing with the issue in that way, we will avoid having to make a particular provision in the Long Leases (Scotland) Bill and we will reduce effort on the land register without creating any concomitant difficulties. If Mr Fergusson has further questions, I will be happy to address them later.

Paragraph 85 of the committee report notes that amendments may be needed to ensure that the Land Registration etc (Scotland) Bill and the Long Leases (Scotland) Bill work together. We intend to lodge amendments, which may be made directly to the Land Registration etc (Scotland) Bill where that is the appropriate drafting solution. We have further work to do to ensure that we get that right.

The committee report makes a number of comments on common good land and buildings, following evidence that the committee received. I am told that the issue of common good stems from well back, in an act of James VI, so we are going back a considerable time. Many members will receive representations generally about common good land. There are such issues in my constituency; I discussed them at the weekend.

We will continue to work closely with local authorities on information that they have on ultra-long leases and common good. However, ultimately, common good land and funds are the responsibility of local authorities, which must manage them in accordance with their statutory and other responsibilities. Common good asset registers are a matter for individual authorities. Audit Scotland monitors and will continue to monitor progress on the completion of registers, as part of its audit process.

On a possible exemption from the bill for common good, we have not received clear evidence that converting leases of common good land would have an adverse effect on that land. In addition, an exemption for common good land might increase discussions about whether land is held in the common good or not, which could lead to increased litigation and costs for local authorities. That simply would not be in the taxpayers’ interest. In any event, there are nine parcels of land involved and in almost every case it is about a transfer from one public form of ownership to another, with only a few exceptions. Therefore, to try to legislate on common good in this context would be a formidable challenge.

In the debate on common good, the committee received considerable evidence about Waverley market in Edinburgh. The Government is not reaching any view as to whether the Waverley market is held in the common good or otherwise. However, the committee noted that the case for exempting the Waverley market site from the bill has still to be made. I advise Parliament, however, that since I gave oral evidence to the committee on 7 March we have had an initial look at other legislation that may touch on that or other leases. Both Waverley market and some common good land in Stonehaven are governed by private parliamentary acts. In view of possible issues arising from provisions in those acts from converting leases to ownership, I have asked my officials to undertake further work on the matter, particularly on whether it would be appropriate to amend the legislation that covers the two areas that the leases apply to, or to take other appropriate action. We continue to engage on the issue, because it is of substantial concern to a wide range of people.

The bill is quite lengthy and rather technical, but its aim is straightforward—it will simplify Scots property law by converting ultra-long leases, which are essentially akin to ownership, to actual ownership. The consultations by the Scottish Law Commission and the Government showed that there is widespread support for the bill’s general principles. The committee also recommended that the Scottish Parliament support the bill’s general principles at stage 1. I therefore invite Parliament to support the motion at decision time. I take pleasure in moving the motion that stands in my name.

I move,

That the Parliament agrees to the general principles of the Long Leases (Scotland) Bill.


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