Scottish land ownership: new expectations of trusts and charities
The Scottish Land Commission has issued two new protocols. One for charities and one for private trusts.- What is the Commission expecting of trusts and charities that own land in Scotland?
The Scottish Land Commission has issued two specific protocols for what it expects of charities and private trusts. Each protocol will apply to charities and trusts irrespective of being Scottish entities. It is their ownership of Scottish land that matters. The principles underpinning the protocols cover both rural and urban settings.
What is the Scottish Land Commission?
Set up under the Land Reform (Scotland) Act 2016, the Commission’s functions include reviewing the effectiveness of and recommending change in Scotland’s land law and policy as well as carrying out research and providing guidance and information. While the Commission sets its own strategic plans, its work is guided by having regard to the Land Rights and Responsibilities Statement (“LRRS”).
What is the Land Rights and Responsibilities Statement?
Again, this comes from the Land Reform (Scotland) Act 2016. The Act creates a requirement for Scottish Government to prepare, consult on and publish the LRRS. The LRRS must also be reviewed after five years.
In legislative terms, the LRRS is (unsurprisingly!) a “statement of principles for land rights and responsibilities in Scotland.” The 2016 Act sets out the foundations for the principles. The foundations include the desirability for/of: inclusion and equal opportunities; diversity of land ownership; reducing socio-economic disadvantage; community empowerment; and sustainable development of land.
The LRRS sets out six overarching principles. They are (those emboldened have been particularly identified in the protocols as applying to charities and trusts):-
1. The overall framework of land rights, responsibilities and public policies should promote, fulfil and respect relevant human rights in relation to land, contribute to public interest and wellbeing, and balance public and private interests. The framework should support sustainable economic development, protect and enhance the environment, help achieve social justice and build a fairer society.
2. There should be a more diverse pattern of land ownership and tenure, with more opportunities for citizens to own, lease and have access to land.
3. More local communities should have the opportunity to own, lease or use buildings and land which can contribute to their community’s wellbeing and future development.
4. The holders of land rights should exercise these rights in ways that take account of their responsibilities to meet high standards of land ownership, management and use. Acting as the stewards of Scotland’s land resource for future generations they contribute to sustainable growth and a modern, successful country.
5. There should be improved transparency of information about the ownership, use and management of land, and this should be publicly available, clear and contain relevant detail.
6. There should be greater collaboration and community engagement in decisions about land.
The new protocols: implementing the principles
The protocols are designed to set out specific expectations of charities and trusts to encourage them to operate and be governed in a way that reflects the ambitions of the LRRS.
The specific expectations: charities
• provide up-to-date, accessible, information about who are the trustees and who to contact at the charity about land matters. This ties in with a separate Commission protocol on transparency.
• be proactive and transparent in sharing information about land held, activities carried out and the associated pubic benefit, with such information appearing in the Trustees’ Annual Report and website.
• following, where appropriate, the Commission’s separate protocol on “Community Engagement in Decisions Relating to Land”.
• when reviewing operational strategy and governing documents, to consider ways of working with the local community to meet community priorities.
• prepare community engagement plans.
• consider reflecting more closely the LRRS within the charity’s constitutionally-stated purposes.
• regularly review governance and consider the skills and knowledge needed by trustees and consider the adequacy of local knowledge and priorities in decision-making.
• on appointment of charity trustees, to consider recruiting trustees from the area local to the land or creating mechanisms for local representation.
• consider any approaches from local community organisations to lease or acquire land in line with the charity’s governing document and duties. Charities should be open and transparent in the associated decision-making processes and give clear reasons for decisions.
• engage with community bodies and councils in keeping with the Community Empowerment (Scotland) Act 2015 and the Commission’s community engagement protocol.
• if examining the possibility of selling or leasing, consider the opportunities for different types of organisations, small business and local residents to acquire or take over the property.
The specific expectations: trusts
• provide up-to-date, accessible, information about who are the trustees and who to contact about land matters. This ties in with a separate Commission protocol on transparency.
• following the Commission’s separate protocol on “Community Engagement in Decisions Relating to Land” where planning to make significant changes to governance/structure, or the way land is used or managed or where a local community organisation makes a request for information.
• consider the skills and knowledge needed by trustees and consider adequacy of local knowledge and connection
• consider whether decision-making processes can be influenced by local community priorities.
• on appointment of trustees, to consider recruiting trustees from the area local to the land or include local representation where the trust has wider property holdings.
• consider any approaches from local community organisations to lease or acquire land in line with the trust deed and trustee duties. Trustees should be open and transparent in the associated decision-making processes and give clear reason for decisions.
• if examining the possibility of selling or leasing, consider the opportunities for different types of organisations, small business and local residents to acquire or take over the property.
Multiple, conflicting considerations?
Charities and private trusts are, of course, different. The protocols do acknowledge the specific legal duties applying to charities and trusts. Each have legal duties directing how they act and on what they must focus. Charities must further their constitutionally-stated purposes and adhere to wider charity law. Trustees must act in the interests of the (invariably human being) beneficiaries. These will remain the litmus test of good trusteeship (for a charity or non-charitable trust).
Some of the Commission’s specific expectations will fall full square on the overarching duties under trust or charity law. Some would already fit neatly into the good governance expectations of a trust or charity (just as e.g. safeguarding or GDPR do). Any jarring between trust/charity law duties and the relevant protocol would perhaps come from issues such as:-
(1) the duties owed to beneficiaries by private trusts (and the personal unlimited liability for trustees that is attached to a breach);
(2) trusts or charities that hold land for investment purposes; and
(3) decision-making related duties including exercise of discretion, relevant considerations and confidentiality.
While not expressly included, public trusts should also consider the protocols. It is likely (but might not always be the case) that public trusts will be best served by following the charities protocol.
Additional regulatory and compliance burden?
Charities and trusts will want to consider how their individual circumstances will enable them to live up to the expectations of the protocol and any local communities. The answer for each might be different, but all should consider the protocol and arrive at proper decisions about how they will manage the issue.
Blending the aims of the protocol with the relevant legal duties for the charity or trust will be paramount. In many cases, a desire to be transparent and open about matters will best serve the interests of a charity’s purposes or the trust’s beneficiaries. How ever an organisation engages with the protocol, it will want to be on the front foot.
This blog was written by Alan Eccles – alaneccles@bkf.co.uk