TFC blog: The importance of recording agreements in writing

A good business relationship between a landlord and a tenant is often founded on a good personal relationship. The ability to talk openly about issues and to reach amicable agreement on any issue related to the lease and to the tenancy is a positive attribute which most tenants and landlords would want to share.Bob - portrait NEW

Unfortunately, however, the existence of a good relationship can lead to a false sense of security when it comes to reliance on verbal agreements. The landlord and tenant know each other well, they trust each other, and they are confident that each will remember and honour the agreement reached. All of that is fine while the relationship is good and while the landlord and tenant who made the agreement are still involved but time moves on, memories fade and tenants and landlords pass on responsibilities to their successors. At some point the issue on which agreement was reached comes up and the new party, be it landlord or tenant, has no knowledge or record of what was agreed and is reluctant to accept the other party’s version of events. The result is acrimony and a souring of the relationship.

I have come across a couple of such cases recently and I’m sure that there are many others out there. In one case the landlord and tenant had agreed verbally that one of the farm cottages in the tenancy would go back to the landlord to let out. When the landlord ceased to let the cottage it stood empty for a time, eventually attracting a large backdated council tax bill and some vandalism for which there was no insurance cover. The result is an argument between landlord and tenant over responsibility for council tax and repairs and all because no written records were made of the agreements reached and the consequences for the respective responsibilities of landlord and tenant.

Any agreement made between landlord and tenant which impacts on the terms of the lease or the responsibilities of either party should always be confirmed in writing. In some cases this may require a formal legal agreement but in others a simple letter setting out what had been agreed should be provided by one of the parties and agreed by the other, with both parties retaining a copy for their records. Without the ability to provide evidence of any agreement reached, there is a high risk of future disagreement and dispute which can only damage the landlord/tenant relationship and which may have adverse financial consequences for either or both parties.

Bob McIntosh
Tenant Farming Commissioner

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Compulsory Sale Orders – adding to the regeneration toolbox

Earlier this year, I blogged about how the Scottish Land Commission was developing proposals for the potential introduction of a Compulsory Sale Order. Here I also discussed why we need such a power. We have now published a detailed proposal informed by comprehensive discussions with a wide range of experts and organisations that have experience ranging from regeneration, housing, valuation and human rights.

The problem

Vacant and derelict land and buildings present real challenges for communities across Scotland. The quality of life for existing residents can be damaged. There are 11,600 hectares of vacant and derelict land in Scotland (an area almost twice the size of the City of Dundee) and with more than 37,000 long-term empty homes in the country.

Often smaller areas of vacant and derelict land or buildings in built up areas in particular, can make it more difficult to meet community needs especially where affordable housing, urban green space or cultural facilities needs are great. They can act as a deterrent for investment which can hold back regeneration.

In the current regeneration toolbox, Scotland has mechanisms that allow planning authorities and communities to buy such sites. However what happens when neither have a specific end use in mind for problematic sites? What if the authority or community body hasn’t got the capacity or resources to take on the site themselves? Seeing such sites being put into some kind of productive use that will benefit the local community is often desirable but the current tools available might not always be appropriate.

Transfer and transform

The Compulsory Sales Order (CSO) would offer an additional way for planning authorities to deal with such eyesore sites. By enabling a transfer of ownership, these sites could be transformed. This is backed up by research evidence which suggests that a change in ownership that transfers a property from a passive to an active owner is often a necessary pre-condition for bringing vacant and derelict sites back into productive use.
A CSO power would offer a planning authority (on a case-by-case basis) the chance to:

  • firstly, investigate a site. This would be very important step because it provides an opportunity to bring about a mutually acceptable resolution between the authority and the owner. This step must be taken before a formal order could be issued, demanding the sale of the property via an auction. A CSOs is not intended to be a punitive instrument it can help facilitate a constructive dialogue with owners of problematic sites, arguably one of its strengths.
  • provide a more reliable measure for valuing vacant and derelict urban sites. An auction is an efficient way for revealing the true market price of a site at any given point in time, especially when they are difficult to value or estimate as there may be no accurate comparisons.
  • commit a new owner to bringing the property into a productive use. Conditions attached to the sale would mean that new owners are required to complete the development and bring the site into a productive use within a fixed period of time.

Let me illustrate this with some examples, which may be all too familiar..

The abandoned gap site

Take, for example, an abandoned and neglected gap site which has been in this state for several years. Even though planning permission was granted a few years ago, nothing has been done with it.  There’s litter and overgrown trees which are blocking out the light for nearby residents. This is having a negative impact on the wellbeing of the community and compromising the quality of life of nearby residents. No one within the community has any particular desire to take ownership of the site but people are keen for action to be taken to improve its physical appearance.
What are the reasons preventing the site being brought into productive use? A preliminary investigation for a CSO could help identify these and potentially even help bring about a mutually acceptable resolution, or ultimately issuing a CSO could result in ownership being transferred to a more active and responsible owner. A CSO could therefore be an effective tool for improving the site and bringing it back into productive use in the interest of the public.

 

The derelict hotel

There’s also the example of an unloved and derelict hotel which may not be an uncommon sight in town centres of smaller rural towns. It’s been neglected for a long period of time and is an eyesore. It’s also a danger to the public and building standards notices have been issued to the owner- a company that is difficult to contact and isn’t doing anything to improve the situation.
Yes, the right to buy legislation could potentially be a route for bringing this site back into productive use, however taking on such a site by a community body may be complex and technically challenging. Equally, compulsory purchase could be an option for the local authority yet resource constraints mean that, unless the physical condition of the building becomes a serious danger to public health, it’s unlikely that the authority would compulsorily buy the site. There is therefore currently no realistic prospect of the site being brought back into productive use.

 

Empty homes

There is a strong appetite to use CSOs to help address the problem of empty homes and the harm that these may cause not only to housing supply but also physically, to the community.
A useful example comes from the south west of Scotland where in the early 2000s a resident of a small market town purchased a flat in the centre of the village to live in.  The owner continued to buy the neighbouring flat and the commercial premises on the ground floor, eventually owning the entire property.  The owner moved away and the property has been empty for the last 15 years and the physical condition of the property has deteriorated significantly. It’s now in an extremely poor state of repair.  A recent valuation estimated the current market value at far less than the original price that the owner originally invested.
The local authority is very keen to bring it back into productive use to help address a chronic shortage of affordable housing in the area. They’ve offered to purchase the property for a price significantly above the current market value but the owner is unwilling to sell because the price offered is still considerably below what he originally invested in the property. There is currently no prospect of the property being brought voluntarily to market. Compulsory purchase is also currently not an option as the authority doesn’t have the budget or a development partner.  This means that there is currently no mechanism that the authority can use to bring the property back into productive use. Here a CSO could offer a way forward in developing the site and making it productive again.

Our proposal includes several more real life examples to help create a picture where a CSO may or actually MAY NOT be the best tool to use for dealing with a particular site. It is important to view the CSO not as a silver bullet but potentially a powerful additional instrument for urban renewal in Scotland.

Read the full proposal here.

Community Land Week: community land ownership becoming the norm

As Community groups across Scotland are opening up their doors showcasing what Land Commission board portraitshappens on community owned land in the first Community Land Week, Scottish Land Commissioner, Megan MacInnes looks at the importance of community land ownership and its success story in Scotland’s land reform journey to date:

Land across much of the world is traditionally owned and managed by communities but the community right to buy land that we have in Scotland is unique. According to the 2015 SPICe Briefing ‘International Perspectives on Land Reform’ the “shift in policy towards community ownership in Scotland since the Land Reform (Scotland) Act 2003 is in contrast to the apparent European trend towards increasing land consolidation” and the Scottish Community Right to Buy exists no-where else.

From pioneering beginnings in places like Assynt, Knoydart and Eigg, community ownership has become an established model; relevant to rural and urban communities alike. As it has grown, so has the level of ambition and recognition of its potential. Efforts to find ways to ensure communities legally own the land they live on in Scotland are being reflected by efforts globally, in particular increasing the tenure security of the land belonging to indigenous peoples and local communities.

Land ownership brings within community control an ability to realise opportunities and create social and economic benefits, an ability to develop income streams and confidence to shape local assets, services and places.  Community land ownership is an effective means to deliver community-led development and regeneration, underpinning resilient local economies, delivering outcomes that go well beyond a change in ownership. But more than this, communities owning lands transforms the relationship between local people and the land on which they live and how decisions about the land are made.

In addition to the benefits for the community itself, other types of land owners could learn from the ways in which community land ownership models integrate transparency, community engagement and local accountability into the heart of decision-making around land, its use and management.

Of course, community land ownership is not ‘the answer’ for all communities, or indeed to all calls for land reform. It is not the only way to realise opportunities for development, nor should its challenges be underestimated. But we do think that it should be a much more common part of the mix of land ownership in all parts of Scotland both urban and rural.

The public interest outcomes of community land ownership across rural and urban communities are the same but the increasing interest in community ownership in urban centres demands a fresh look.

In urban centres it may be ownership of a single building that will make the difference, but the same may be true for a rural community. While for some communities ownership of a large ‘estate’ land holding may be appropriate, for many more it is ownership of sufficient land to meet local housing needs, community facilities, recreation space or assets to generate long-term revenue that will make the difference.

Community ownership needs to be recognised and integrated into established and emerging approaches to economic development and regeneration.  Community ownership connects place-making, social and economic resilience and regeneration.

To continue with the success of community ownership it is important that the number and range of communities benefitting from having land and assets under community control is monitored and what this enables them to achieve is appraised.  The success of community land ownership is being evidenced by the active and resilient communities in which ownership of land and buildings is seen as an integral part of shaping their long-term provision of facilities, services, revenue and opportunities.

With the introduction of the urban community right to buy, there is a move for community land ownership to become ‘normal’ and seen as an option for communities across the country.  To continue the success story of community land ownership it is important to support that shift and for it to be normal process for communities to consider what land or buildings around them should be owned by the community and taking a proactive, planned approach to acquiring them.  Negotiations between a willing seller/willing buyer need to be encouraged with existing and forthcoming rights to buy effective in enabling communities to purchase land.

The Scottish Land Commission is currently carrying out a detailed study on opportunities to improve existing rights to buy, and what wider steps are needed to make community ownership a more viable across Scotland. We will be publishing our findings and recommendations to Scottish Government in the next couple of months.

Community Land Week is an excellent opportunity to learn from those communities who have gone through the process, the lessons they have learned and how they have made it a success.  Have a look at Community Land Scotland’s website to find out more:  www.communitylandscotland.org.uk