Yesterday, the Scottish Government published its draft Long Leases Bill which is designed to convert any lease of over 175 years (with at least 100 years left to run) to full ownership. This follows a consultation earlier this year (responses here) which, in turn, followed a report from the Scottish Law Commission on the topic (Report No. 204 on SLC website).
The evidence of the existence of long leases was derived from the Land Register in a survey of only four counties. It is not surprising, therefore that it did not pick up on the important issue of leases of common good property, most of which are in the Register of Sasines. Common Good land will often have been let on long leases as an alternative to sale to get over the problem of inalienability.
I drew this problem to the attention of the Government in June 2010 but it is clear from the Policy Memorandum (see link to Bill above) that they have declined to take my concerns on board although they have decided to amend the bill to exclude all leases of over Â£100 per year.
What this means is that the Waverley Market in Edinburgh (pictured), a part of the common good fund of the City of Edinburgh, which is currently let on a 206 year lease to a company owned by David Murray for 1p per year will become his automatically without him paying anything for it. The Common Good Fund of the City of Edinburgh will then have lost an asset worth about Â£50 million.
The Scottish Government knows this (see my response in link above) and thus we now need to mobilise effort to amend this in Parliament. Remember, that this may well affect common good property across all of Scotland’s 196 burghs.
The story of this scandal is told in Chapter 24 of my new book, The Poor Had No Lawyers.
UPDATE Fri 12 Nov – Scottish Parliament Justice Committee to discuss how to deal with this bill at its meeting of 16th November (see papers for meeting). Officials are proposing a 5 week consultation to 31 Dec (half the normal 12 week minimum recommended). They regard this as a “technical” bill. Clerks express some doubt as to whether the Parliament has the time to complete the pasage of the Bill before it dissolves at end of March.
I’ve only went so far as the summary of the bill on your first link; what’s the implication of “to provide for payment to former owners of land of compensation for loss of it on conversion”. Would that not imply in this case City of Edinburgh receiving something for the site?
It’s equally wrong that a site which is “common good” is being used to generate commercial revenue without any real-world return into the common good fund. Surely a lump sum of millions is better than Â£2.06?
The provisions for compensation are contained in Part 3 of the Bill. They look complicated but are based on the capitalised rent. Given that the rent is 1 penny, I can’t imagine that the compensation will be too great.
Now call me naive but I am struggling to understand how a company was given the use of the site of such obvious commercial value at a rent of 1p a year. Even I think i would be prepared to risk a penny a year. Did they have to clean up a huge pile of plutonium dust , at huge cost, for the deal.
I’d be grateful for an explanation.
There was a sub-lease which the Council sold and received over Â£4 million in 1989 which left the principal lease running at 1p per year. That cash went into a property development fund (should have gone into the common good fund). Details are in my book and there are papers at http://www.scottishcommons.org/burghs/edinburgh.htm
Ok thanks for that,will check it out but 4million seems light for such a long lease.
All the details are in the documents on scottishcommons page – see in particular my 26 April paper and 4 October paper. This is all history, however. Fact is Market is let until 2188 after which the Common Good Fund should get the site back. It won’t if the Long Leases Bill goes through as it stands. The question also probably applies to other common good land across Scotland.
The implications of this is tremendous and could potentially affect much more than the City of Edinburgh in time
Is it not possible to mobilise petitions, or demonstrations, against this robbery or it could happen by default?
Proposed amendments could easily be defeated and thus this could all happen without much fuss. Lead Committee and timetable yet to be decided.
I do the backroom research – would hope that some of Edinburgh’s civic bodies mobilise but I won’t hold my breath.