To buy or not to buy
Croft tenants have enjoyed, since 1976, rights to purchase (1) their croft house and (2) their croft land. These rights differ significantly in that a crofter is entitled to a conveyance of the site of a croft house, and has a slightly qualified right to purchase croft land.
It is interesting to note that the exercise of the right to purchase has differed widely according to geography. The Western Isles, for example, have seen proportionally far fewer croft purchases than on the mainland.
Ultimately the decision will depend, as ever, on the individual circumstances of a particular crofter, but generally speaking, in deciding advising whether to buy or not to buy, we would think about the following elements.
Reasons to Purchase
To remove (for whatever reason) a landlord.
To facilitate the development of the croft – eg.to sell a house site on the open market it is necessary to (a) decroft and (b) obtain a title deed to the site. This element is less significant than it once was, due to both the stance taken on decrofting by the Crofting Commission (who have indicated that they wish to reduce the amount of land being decrofted), and also to the extension of the period (now ten years from the date of purchase) during which a former croft landlord can ‘claw back’ financial benefit obtained by the former crofter by the onward sale of her croft land.
Some crofters feel that they have a greater voice as owners rather than tenants (although some tenants would use the same argument).
To simplify succession to a croft. Although the 2010 Act provided that a croft tenancy could be left to one person or to more than one person, I still usually advise clients to bequeath a tenancy to only one person (or if they wish to bequeath to more than one person, to purchase the croft). This is because if the Crofting Commission refuse an application by the executor to divide the croft to effect the bequest, the tenancy falls in to intestacy, which is an issue for discussion another day.
A landlord can grant servitude rights over tenanted croft land. Suppose a landlord was approached by a third party who owned an area of land adjoining a tenanted croft, and that third party requested the grant of a servitude right of drainage for their septic tank, or perhaps a servitude right of wayleave for a water or electricity supply, over the croft land. The landlord should, of course, seek the consent of his tenant crofter, and perhaps most do, but there is no doubt that some landlords either do not seek consent, or they ignore a refusal of consent and grant the servitude regardless. An owner-occupier crofter (and an owner-occupier who is not an owner-occupier crofter – see here) does not have this problem, because it is they who must be approached in relation to the granting of servitudes, and they may refuse for any reason or for none.
Reasons not to Purchase
There may be strategic reasons not to purchase a croft, for example if it is important (for whatever reason) to make future succession time limited, or if it is intended that the crofter obtain an apportionment of the common grazings. In the latter case, a crofter loses the right to purchase the apportionment, even if it is not time limited and it is contiguous with or adjacent with the croft land itself.
It is also the case that if a crofter plans to sell their tenancy within the next ten years, it is sensible to retain the croft in tenancy, otherwise landlord’s clawback would apply when the crofter sold the croft. If a crofter sells a croft tenancy, and the value is, for example, £20,000 (and it would be a lucky purchaser to get a croft tenancy for £20,000), the crofter has £20,000 in their pocket.
However, if the crofter bought the croft less than ten years before selling it on again (AND if claw back is present either within the title deed as a title condition, or more commonly secured by way of a standard security registered against the crofter’s title), the return the crofter makes would, theoretically and in the first instance, increase if a title deed was obtained, by maybe 10%, but the former landlord of the croft is then due a payment of 50% of the market value of the croft at the time it is sold, which in this example would work out as a payment of £11,000. The crofter therefore is left with £11,000, even less if you factor in the costs of obtaining the title deed in the first place. The crofter would have been better to have held on to the tenancy.
Conclusion
The decision whether to buy or not to buy will depend largely on an individual crofter’s circumstances. If there are no strategic considerations then it is difficult to imagine how purchase would prejudice the crofter. On the other hand, if none of the reasons listed above are relevant, then there may be no good reason to make the investment required.
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