Seven keystrokes (" to (e)") in a recent statutory instrument consulted upon under the headline of Energy Efficiency will radically alter the law in relation to some crofts in 2027. The change could cause major financial headaches for community landowners such as Storas Uibhist and Stornoway Trust. It could also lead to significant rent increases for the affected crofters (a minority) but with the potential upside for them of 6-figure windfall gains.
Croft house at Kilchoan - picture credit A Kilchoan Diary |
There have for a long time been
obligations upon landlords of private sector residential tenancies to maintain
let houses to certain standards. The most recent iteration of these is Chapter 4 of the Housing (Scotland) Act 2006. Section 14(1) of this requires the
landlord to ensure that a house meets the “repairing standard” set out in
section 13. This includes (amongst other things) that the house is “wind and
water tight and in all other respects reasonably fit for human habitation”. Since
1 March 2019, it also requires that the house meets “the tolerable standard”.
That is defined in section 86 of the Housing (Scotland) Act 1987 and
includes that the house is “substantially free from rising or penetrating
damp”. And from 1 March 2024, the repairing standard includes that houses must
have “fixed” (i.e. central) heating systems. [1]
The repairing standard (and previous
iterations of residential landlords’ maintenance responsibilities) has never
applied to farm tenancies – farm
houses and cottages on let farms. That’s because farm tenancies have always had
their own distinct statutory maintenance regime. Without going in to the detail
of that, it’s fair to say it’s less rigorous on landlords of farms than the
repairing standard (RS). But in 2018 the Scottish Government decided the RS
should be applied to houses on farm tenancies as well. In legislative terms,
this was effected by regulation 2(2) of The Housing (Scotland) Act 2006 (Modification of the Repairing Standard) Regulations 2019 repealing
s.12(1)(c) of the 2006 Act (the paragraph which had excluded farm tenancies
from the repairing standard). However, this doesn’t take effect until 2027 in
order to give farm landlords a reasonable lead in time to their more exacting
responsibilities.
Farmhouse at Gairloch |
Before I continue, the inevitable
terminological point: I use the expression “farm tenancy” to refer to a tenancy
of an “ordinary” farm which is not subject to the crofting legislation. For any
agricultural lawyers reading, a farm tenancy could be a 1991 Act Tenancy or a
Limited Duration Tenancy or any of the other more recent types. Though not a
legal term of art, I’ve made up “farm tenancy” to distinguish them from
“crofting tenancies” which are self explanatory. By “agricultural tenancies”, I
mean farm and crofting tenancies.
Houses on crofting tenancies have never been subject to any obligation upon
the landlord to maintain them. That’s because the historical facts of crofting
are that, unlike with farm (and urban residential) tenancies, it was almost
invariably the tenant who built the house on his croft. Thus, it was his to
maintain. Croft houses do not in any meaningful sense “belong” to the landlord
like other rented houses, urban or rural, do. For any lawyers old enough to
appreciate the analogy, the relationship of a crofting landlord to a croft
house is, in practical (if not strictly legal) terms, much closer to that of
feudal superior of the house than landlord. Thus, crofting tenancies were also
excluded from the repairing standard by s.12(1)(d) of the 2006 Act.
But the recent extension of the repairing standard has also brought houses on crofting tenancies under its ambit from 2027. (2019 regulation 2(2) also repeals s.12(1)(d).) Thus, crofting landlords could for the first time be faced with claims from crofters to upgrade houses for which only a pittance of rent is paid (£10-20 a year is typical for a croft – c.f. feuduties).
There are about 15,000 crofting tenancies in Scotland but only a smallish minority have houses on them. That’s because, since 1976, crofting tenants have had the right to take a freehold title to their croft houses for a nominal sum (£25-50 is typical) [2]. Most crofters have exercised this right in order to be able to mortgage the house to fund improvements to it. But there are probably as many as four figures of croft houses still in tenancy. Moreover, these are likely to be the ones most in need of being brought up to the repairing standard. A typical scenario would be the croft where the last active resident tenant died 20-30 years ago, not having exercised his right to buy due to never having seen the need during his life to improve his 75 year old house. The tenancy is now held by family members who live elsewhere, rent the land informally to neighbours and visit the house only for occasional holidays with the consequence that it’s deteriorated for want of being lived in and regularly maintained. A crofting estate could have several, if not dozens, of houses in that situation and, in 2027, the crofters could ask their landlords to do them up for them by invoking the repairing standard. Then, after the landlord has spent a five figure sum doing that, the crofter could invoke the right to buy at the nominal £25-50 and sell the newly renovated house on for six figures!
Few are likely to shed tears over
the travails of crofting landlords until it’s remembered that a substantial
number of crofts – possibly around a third of them – are on estates belonging
to community bodies (Stornoway Trust, North Harris, South Uist, North Assynt et al). So let’s pick this apart in more
detail and see if the repairing standard really is as much of a threat to the fragile finances of
these third sector landlords as it appears on the surface. (Note that, from
hereon, when I refer to croft houses, I’m referring only to those – a minority
– which are still in tenancy, not those which have been bought and will remain
wholly the responsibility of their owners. And by “crofter” I mean only those whose
houses are still in tenancy.)
Crofts on South Uist belonging to community landlord Storas Uibhist - picture credit Allan Macdonald |
First, the repairing standard
doesn’t require landlords to carry out work “for which the tenant is liable by
virtue of the tenant's duty to use the house in a proper manner” (2006 Act,
s.16(1)(b)). So the argument would be that, by allowing a croft house to have
deteriorated, the tenant has not “used it in a proper manner” and therefore the
landlord is not liable to carry out work to bring it back up to the repairing
standard. But are crofters under a duty to “use their houses in a proper
manner” prior to 2027 when the 2006 Act will start to apply to them? Amongst
the statutory conditions of crofting tenancies is that the tenant “shall
not, to the prejudice of the interest of the landlord ... injure the croft ...
by allowing the dilapidation of buildings” (Cond. 5). But is that the same
thing as “using buildings (including houses) in a proper manner”? There has
been no attempt to synchronise the Housing Act with the Crofting Act consequent
upon the repairing standard being applied to crofting tenancies so as to remove
such doubts and questions. Consequently, I would be hesitant about advising a
crofting landlord that s.16(1)(b) of the 2006 Act (benefit of repairing
standard conditional upon tenant having used the house in a proper manner)
could be relied upon as a defence to a claim by a crofter to do substantial
work to upgrade his house in virtue of the repairing standard. But on the other
hand, I would warn a tenant that s.16(1)(b) could represent a significant obstacle
to his claim. I suspect that, if the matter came to be tested in court, the
answer might depend on how sympathetic the court was to the whole policy of applying
the repairing standard to crofting tenancies and whether the court wanted to support
it or neuter it.
Be that as it may, it’s possible to imagine a slightly different scenario in which a crofting tenant has scrupulously maintained his house such that there’s no question of him having not “used it in a proper manner” (Housing Act) or “allowed its dilapidation” (Crofting Act). But it’s an old house which no amount of continued maintenance, however meticulous, is going to bring near the modern repairing standard (think old wooden sash and case windows). Indeed, the house may not have reached the repairing standard even when it was brand new in the 1930s. In this scenario, the landlord doesn’t even have the possibility of a defence under s.16(1)(b) to a claim by the tenant to bring it up to the repairing standard. And aside from these more dramatic scenarios of total refurbishment of an old sub-standard house, there are the more everyday cases of something needing fixed like the central heating boiler or just a broken window or loose slate: up until now that has been the crofter’s responsibility but from 2027 it will be the landlord’s to do free of charge to the crofter!
There’s another very commonly
occurring crofting scenario worth looking at here. On many crofts, the crofters
have built a new house on a different site from the old house which was left standing.
They take title to the new house and the old one is left in tenancy. Could the
crofter invoke the repairing standard (RS) to require the landlord to do up the
old house? I think that’s much more doubtful. The reason is that the RS only
applies to the tenancy of “a house let for human habitation” (2006 Act,
s.12(1)). Now, considering that there is also amongst the statutory
conditions of crofting tenancies a prohibition on there being more than
one inhabited house on a croft at a time (Cond. 8), the old house is surely no
longer “let for human habitation”. There are counter arguments to that, though.
If title is taken to the new house, then the tenanted remainder of the croft is
back in the situation of having only one house on it, the old one. Perhaps even
more compelling is the argument that a landlord is entitled to waive compliance
with the statutory condition and allow two inhabited houses on a croft. I
personally know of one where the old house was lived in by adult unmarried
children of the crofter who lived in the new house. This sort of scenario will
not be unique.
An example
Below is an advert I found for the sale (assignation) of a crofting tenancy where the house is still in tenancy: click it to enlarge. I've anonymised it. It's one of those crofts where there's an old house and a new house but note that even the "new" house, built in the 1950s, is "requiring complete renovation". It's a fair guess that house comes nowhere near the repairing standard. So should the purchaser (assignee) resist the suggestion in the brochure to purchase (take a freehold title to) it and instead leave the house in tenancy and wait until 2027 and get the landlord to carry out the required renovation at his expense?
Let’s move on and imagine a crofter
has been successful in invoking the repairing standard and compelled the
landlord to do substantial work to improve his house. It may not be a total
“freebie” for the crofter because the landlord could increase the rent to
compensate him (the landlord) for his expenditure. The rent for a croft can, on
the application of the landlord or the tenant to the Land Court, be revised (up
or down) to whatever is the “fair rent” [3].
This is not the place to go into the case law about what a “fair rent” for a croft actually
means because croft rents are seldom reviewed in practice because they are
usually so low that it’s not worth either party’s while tinkering with them. But
the application of the repairing standard to croft houses puts a new complexion
on this from 2027. It must surely be “fair” that a croft rent be considerably
increased to reflect money a landlord has spent on a croft house. Indeed, it
may also be “fair” to increase a croft rent to reflect the fact that the
landlord could, for the first time, be called upon to spend money on a croft
house (whether a complete refurbishment or just fixing the broken boiler or loose slate) even
though he hasn’t done it yet. So an unintended consequence of applying the
repairing standard to crofting tenancies could be that crofters could face a significant increase in rent for something they didn’t ask for.
Could these crofters avoid the
rent increase by electing to buy the freehold of their houses for a nominal
price? As with croft rents, the statutory provisions relating to the
calculation of that price are seldom paid much attention because the figures
are so low. Time to look again now with renewed interest. Imagine the scenario
where the crofter has sucessfully managed to get his landlord to spend a five
figure sum bringing his house up to the repairing standard. Section 15(2)(a) of the Crofters (Scotland) Act 1993 says that the price is the open market
value with vacant possession and free of crofting restrictions but – crucially
– assuming there were no buildings on the site and no potential for getting
planning permission to build anything (whether a house or anything else) on the
bare site. This is why the prices paid by crofters for the freehold of their
houses are so negligible. It reflects the fact that the overwhelming majority
of croft houses were built at the expense of the tenants so it’s not fair that
the landlord should get anything for them apart from the value of the bare land
they’re built on. But s.15(2) of the Crofters Act covers the rare situation of
the landlord having built the house by adding that:-
and in addition [to the OMV of the bare site], in a case where the landlord has provided [i.e. paid for] fixed equipment on the site [the crofter shall pay] an amount equal to one half of the proportion attributable to that fixed equipment, as determined by the Land Court, of the value of the site ...
“Fixed equipment” is a term of
art of Scottish agricultural tenancy law meaning the infrastructure of a farm
or croft aside from the actual land itself, typically fences, roads, drains, fanks
etc. It’s defined for the purposes of both crofting and farm tenancies in s.85(1) of the Agricultural Holdings (Scotland) Act 1991. The definition
specifically includes houses. So could it be argued that, by carrying out work
which transforms a sub-standard croft house liable to be condemned by the
Council into a desirable one up to modern standards, the landlord has, in
effect, “provided” the house so as to be entitled to half its value and thereby
perhaps recover some or even all of his outlay? It’s not an entirely ridiculous
argument but pretty doubtful nevertheless, I think. The case is much stronger
where the landlord has added
something to the house (a central heating boiler, for example), as opposed to
work on the existing fabric – in that case I’d be a bit more confident in
saying the landlord could claim half of the uplift in value of the house
attributable to the addition (which may not necessarily be the same as half of the
cost, of course).
Finally on this, a landlord can’t force a crofter to buy his house – the crofter who’s had his house improved by his landlord could choose to sit it out and pay incrementally through an increased rent. But the opportunity to buy a newly refurbished house at half its value (at most, possibly less for the reasons canvassed) is one many crofters will find hard to pass! Note as well that the 50% clawback a crofter who has bought his land must pay his landlord if he sells on at a profit within 10 years doesn’t apply to croft houses, only croft land. [4]
How did we get here? - the legislative process
The idea of extending the application of the repairing standard appears first to have emerged in 2015 at Stage 1 of the bill which was to become the Land Reform (Scotland) Act 2016. This proposed a range of changes to farm tenancies and, during their evidence gathering at Stage 1, the Scottish Parliament’s lead committee on the bill, the Rural Affairs, Climate Change and Environment (RACCE) Committee, learnt of the poor state of repair of some houses on farm tenancies. They accordingly recommended in their Stage 1 Report (paras. 555-558, pp. 118-119) that the Scottish Government bring forward amendments at Stage 2 of the bill to address this. The SG’s response (para. 281, page 72) to that was that, while it acknowledged the issue and was sympathetic to it:
As tenant farming houses interface with a range of legislation and policy areas, amendments to this Bill would not be the appropriate means to address this issue, given the amount of preparatory work needed to deliver robust and sustainable solutions.
Then, at Stage 2, an opposition MSP, Claudia Beamish (Labour), attempted
to force the issue by tabling her own amendment (No. 152 on page 29) to
the bill to apply the repairing standard (RS) to farm – but not crofting –
tenancies. In the end, however, she withdrew it in exchange for an undertaking
from the Minister (Richard Lochead) to give the matter higher priority. In the
course of his remarks to the Committee the Minister remarked that the Beamish
amendment would discriminate against crofters and also said: “We need
qualitative and quantitative research to enable the Scottish Government to
assess the range of issues, including costs, that must be addressed”. And in a
reference to the “interface” mentioned in the SG response to the Stage 1 Report
quoted earlier he alluded to the question of “what legislation will have to be
amended or created to deal with the issue”. [5]
Thereafter, progress towards applying the repairing standard to
agricultural (farm and croft) tenancies was subsumed in work to broaden the
scope of the RS (i.e. include new requirements for all affected properties, not
just agricultural tenancies) and require all rented houses to be brought up to
Energy Performance Certificate Standard D by 2025 [6]. In April 2017, the Scottish Government launched a consultation
on all of these issues. It would be fair to say, though, that the issue of
applying the RS to agricultural tenancies was somewhat buried in this,
occupying just two paragraphs (Nos. 189 & 190) out of a total of 205. The
treatment of farm tenancies was sketchy enough (nothing about the “interface”
with other legislation and policy areas the SG had given as its justification
for not legislating in the Land Reform Bill and opposing the Beamish amendment)
and there was nothing about the specialities of crofting tenancies: although
they were mentioned as included in the proposal, it was plain from the wording
that no thought had been given to them as distinct from farm tenancies at all. [7]
I have not read all the responses to the consultation. I only looked at a few of those which were not anonymous and which I thought might be likely to comment on specifically on crofting. There were no responses from crofting landlords that I spotted and only one response that I looked at in this small and unscientific sample – that from Scottish Land and Estates, the landowners’ “trade union” – raised the crofting implications. [8] The analysis of the responses to the consultation noted that 45% of respondees were against applying the RS to agricultural tenancies, 40% for and 16% don’t know. It also recorded that the interface with agricultural tenancy legislation issue had been flagged up in many responses (“complex and unworkable”) but didn’t mention SLE’s specific warning about crofting.
The Consultation did, however, say (para 190) in relation to agricultural tenancies (farm and crofting): “Clearly there are a range of issues which need to be explored further prior to considering a minimum standard for condition. Ministers are, however, mindful of potential condition issues and are committed to undertake research.” That was footnoted with a reference back to the Official Report (transcript) of the discussion in the RACCE Committee of the Beamish amendment and the Minister’s warnings about the need for research and the “interface” with other legislation. The results of the research subsequently undertaken by Rural & Environmental Science and Analytical Services (RESAS) are here. It’s a survey of the physical condition of farm houses and cottages as revealed by a questionnaire sent to farm tenants but not crofting tenants. It was also sent to some landlords, though they are not identified, and returns from them reported on 930 “tenant farm houses”. I’d guess that did not include any croft houses.
Thereafter, the Ministers for Rural Affairs (Fergus Ewing) and Housing
(Kevin Stewart) announced their intention to legislate to apply the repairing
standard to “rented agricultural housing” at an Agricultural Housing Summit on
1 October 2018. I haven’t been able to find any more detail about that except
for this press release.
Housing Minister Kevin Stewart at the Scottish Parliament |
The statutory instrument to amend the Housing (Scotland) Act 2006
[9] to add additional requirements
to the repairing standard (RS) for all residential tenancies and apply it, as
so extended, to agricultural tenancies from 2027 was subject to the so-called
“affirmative procedure”. This requires a draft of it to be approved by the
Scottish Parliament before it’s made by Ministers so it came before the Local
Government & Communities (LGC) Committee of the SP on 30 January 2019 for
them to take evidence prior to making a report to the full Parliament recommending
whether or not the draft instrument should be approved. [10] The LGC Committee contained nobody who’d been on the RACCE
Committee which considered the Land Reform Bill in 2016 when the application of
the RS to agricultural tenancies was first raised so it’s possible the LGC
members had little, if any, prior acquaintance with the issue. They were, however, provided with a “policy note” (scroll to Annexe B, page 15) but, apart from stating that farm and
crofting tenancies were to be brought under the RS and linking to the
Consultation and analysis of responses thereto, it contained no discussion. The
Committee was attended by the Housing Minister, Kevin Stewart, and two of his
civil servants but, again, apart from the Minister stating that the draft
instrument brought the “various types of housing under agricultural tenancies” under
the RS in implement of the commitment made at the Agricultural Housing Summit
last year, and one MSP querying the length of the lead in time to 2027, there
was no discussion in the Committee of the implications for crofting or farm
tenancies: the discussion – which lasted only 17 minutes – focussed instead on
the additions to the RS and its application to holiday lets. The Committee agreed
unanimously to recommend approval of the draft instrument and reported
in these terms to the full Parliament which approved it on 6 February 2019. The
instrument was made and signed by Kevin Stewart on 20 February and it came into
force on 1 March 2019.
It’s very hard to avoid the conclusion that crofting tenancies were just
tacked on to farm tenancies on the assumption they were the same thing and that
not a moment’s thought about whether it was correct or appropriate to apply the
repairing standard to them was ever given by anyone in authority – except
possibly Claudia Beamish MSP (who’s amendment to the Land Reform Bill didn’t
include crofts) and RESAS (who’s questionnaire was not sent to crofters). In
particular, there doesn’t appear to have been any of the “qualitative and
quantitative research” or consideration of the “interface with a range of
legislation and policy areas” as regards the implications for crofting which
the Scottish Government said would be necessary before extending the
application of the repairing standard. [11]
I shouldn’t be in the slightest bit
surprised if the SG doesn’t even realise that, as one of Scotland’s biggest
crofting landlords (Barra and large chunks of Skye), it has exposed itself to
the potential for considerable liabilities. [12]
Crofts on Barra - picture credit Ian Watson |
Footnotes
[1] That’s what the Housing Minister, Kevin
Stewart, told the Scottish Parliament’s Local Government & Communities
Committee on 30 January 2019 when explaining regulations he was introducing to
amend the repairing standard: “The changes will require private rented housing
to have ... a fixed heating system, which means that there will have to be a
system or installation in houses for heating space and water.” (Official Report (transcript) of the meeting here, see Col. 27, 3rd para.) However, what s.13(1)(c) of the Housing (Scotland) Act 2006 as so amended now says (although note that the version linked to there doesn't have the reference to fixed heating because it's not in force yet) is: “the
installations in the house for the supply of ... space heating by a fixed
heating system and heating water are in a reasonable state of repair and in
proper working order”. That doesn’t say there has to be a fixed heating system, merely that if one exists, it has to be in good condition. The same amending
regulations added a new sub-section (7) to s.13 saying “In determining whether
a house meets the standards of repair mentioned in subsection (1)(c) [heating
system to be in good condition] ... regard is to be had to any guidance issued
by the Scottish Ministers in relation to— ... installation of a fixed heating
system.” As far as I can discover, no such guidance has yet been issued.
Perhaps the Ministers intend to include in it a requirement to have a fixed
heating system. But I’m not at all sure a positive obligation like that can be
introduced by mere “guidance” one is only required to “have regard to”.
[3] Crofters (Scotland) Act 1993, s.6(3).
[4] Crofters
(Scotland) Act, s.14(3)
referring to the definition of “croft land” in s.12(3) which excludes the
house.
[5] Official
Report (transcript) of the Stage 2 RACCE Committee meeting here – see columns
45 (from “After section 97”) to 51
[6] In a parallel move to amending the repairing standard (RS) and applying it, as so amended, to agricultural tenancies, the Scottish Government intends to require all houses which are subject to the RS also to be brought up to at least Energy Performance Certificate Standard D ("EPC D") by 2025. Being EPC D won't be part of the RS, it's a separate standalone requirement which applies to houses which are subject to the RS and which will be enforced by local authorities with the sanction of civil penalties (as opposed to being enforced by the tenant as a matter of contract as a condition of his tenancy as is the case with the RS itself).
Whether landlords of croft houses will be subject to the EPC D requirement from 2027 will depend on the devil in the detail of regulations to introduce it (being made under Chapter 3 of the Energy Act 2011, a UK Act) which haven't been published yet. For now, all I have to go on for the detail of the scheme is this guidance. The reason for hesitancy is that, as well as being subject to the RS, there is an another pre-condition for the EPC D requirement which is that the house has an Energy Performance Certificate (EPC) - see paras. 2.1.1 and 2.2.1 of the linked guidance. Aside from specialities such as participation Green Deals and Feed In Tariffs, a house generally only has to have an EPC if it has been sold or had a new tenancy of it granted since 2009 - see para. 2.6.1. Tenanted croft houses are never sold - if they change hands, what happens is that the tenancy is assigned (transferred) to a new tenant who continues with the same tenancy which will date back to long before 2009. Due to crofting security of tenure and the ability to assign and bequeath them, tenancies of croft houses very seldom come to an end such that the landlord is in a position to grant a new tenancy to trigger the requirement for an EPC. (I shouldn't be in the least surprised to be told this has never happened since 2009.) Thus, very few tenanted croft houses require to have an EPC nor will they in the future. That said, when I searched for assignations of crofting tenancies with houses on them for sale, out of the four I found, two of them advertised EPC ratings (one D, the other F). I'm guessing the estate agents advised the sellers, for the sake of £100, to get an EPC to avoid any argument with an over zealous Council enforcement officer that the assignation of a tenancy of a croft house is a "sale" of it for the purposes of the EPC Regs if not strict property law.
It will, therefore, depend very much on the exact wording of the forthcoming regulations for the EPC D upgrade by 2025 and whether they say it applies to houses covered by the repairing standard which require to have an EPC (which will exclude the overwhelming majority of tenanted croft houses) or to houses which happen to have one even though not required. The wording of the linked guidance rather suggests the latter which would be an odd way to legislate because it, in effect, gives tenants the right to opt in by paying £100 to get an EPC. Why not just say it applies to all tenancies covered by the RS?
[7] The internal evidence in paras. 189 & 190 of the Consultation that crofts were not being discussed is that they state that “the landlord is responsible for replacing worn fittings” (which is true of many farm tenancies but not crofts) and “There are over 6000 agricultural tenancies in Scotland” (that is the number of farm tenancies: it does not include crofts).
Whether landlords of croft houses will be subject to the EPC D requirement from 2027 will depend on the devil in the detail of regulations to introduce it (being made under Chapter 3 of the Energy Act 2011, a UK Act) which haven't been published yet. For now, all I have to go on for the detail of the scheme is this guidance. The reason for hesitancy is that, as well as being subject to the RS, there is an another pre-condition for the EPC D requirement which is that the house has an Energy Performance Certificate (EPC) - see paras. 2.1.1 and 2.2.1 of the linked guidance. Aside from specialities such as participation Green Deals and Feed In Tariffs, a house generally only has to have an EPC if it has been sold or had a new tenancy of it granted since 2009 - see para. 2.6.1. Tenanted croft houses are never sold - if they change hands, what happens is that the tenancy is assigned (transferred) to a new tenant who continues with the same tenancy which will date back to long before 2009. Due to crofting security of tenure and the ability to assign and bequeath them, tenancies of croft houses very seldom come to an end such that the landlord is in a position to grant a new tenancy to trigger the requirement for an EPC. (I shouldn't be in the least surprised to be told this has never happened since 2009.) Thus, very few tenanted croft houses require to have an EPC nor will they in the future. That said, when I searched for assignations of crofting tenancies with houses on them for sale, out of the four I found, two of them advertised EPC ratings (one D, the other F). I'm guessing the estate agents advised the sellers, for the sake of £100, to get an EPC to avoid any argument with an over zealous Council enforcement officer that the assignation of a tenancy of a croft house is a "sale" of it for the purposes of the EPC Regs if not strict property law.
It will, therefore, depend very much on the exact wording of the forthcoming regulations for the EPC D upgrade by 2025 and whether they say it applies to houses covered by the repairing standard which require to have an EPC (which will exclude the overwhelming majority of tenanted croft houses) or to houses which happen to have one even though not required. The wording of the linked guidance rather suggests the latter which would be an odd way to legislate because it, in effect, gives tenants the right to opt in by paying £100 to get an EPC. Why not just say it applies to all tenancies covered by the RS?
[7] The internal evidence in paras. 189 & 190 of the Consultation that crofts were not being discussed is that they state that “the landlord is responsible for replacing worn fittings” (which is true of many farm tenancies but not crofts) and “There are over 6000 agricultural tenancies in Scotland” (that is the number of farm tenancies: it does not include crofts).
[8] The Scottish Land & Estates response is here but to see their remarks about crofting, you
have to access their original full response (a Word doc) linked to at the
bottom of that page – see 2nd para. on page 37.
[9] The 2006 Act was amended by The Housing (Scotland) Act 2014, s.24 to
add a new s.20A to the 2006 Act to allow the scope and application of the
repairing standard to be varied by statutory instrument.
[10] Official Report (transcript) of the LGC Committee meeting here – start at
column 26. Video here (after a few seconds it should snap to the start of the relevant discussion at about 11.03). Also under discussion at the same time was another draft SI, The Housing
(Scotland) Act 2006 (Supplemental
Provision) Order 2019, which
is not relevant to the present discussion.
[11] The same legislation as applied the repairing standard to crofts has also applied it to Small Landholders Holdings (SLHs). That's because Reg. 2(2) of The Housing (Scotland) Act 2006
(Modification of the Repairing Standard) Regulations 2019 has also repealed s.12(1)(e) of the 2006 Act which excepted SLHs from the RS. SLHs are similar to crofts in
the rest of Scotland outside the Crofting Counties although there are
thought to be only about 60-70 SLHs left in existence – more information about them here.
I've not discussed the implications of applying the RS to
SLHs in this paper. Many of the points made in relation to crofting may
apply equally to SLHs although I haven't refreshed my memory of the law of SLHs in
order to be more definite: one big difference between crofts and SLHs is
that tenants of SLHs have no
statutory right to buy their houses or holdings like crofters do. The conclusion that the Scotgov gave crofts no thought in the legislative process definitely applies equally to SLHs, though.
[12] The Housing (Scotland) Act 2006 binds the Crown (s.193) which includes
the Scottish Ministers (s.193(5)(c)). Another public sector crofting landlord
which will be affected by the application of the repairing standard to crofts
is Shetland Islands Council which is the landlord of about 250 crofts. More
information here. I didn't spot SIC amongst the Consultation responses.
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