Welcome to this month's HSPC blog where we catch up with our solicitor firms to give you valuable information and advice for everything property in the Highlands.

Evelyn Crate from Macleod & MacCallum explains the differences between purchasing an owner owned, tenanted croft and grazing share.

Owner Owned Croft? Tenanted Croft? Grazing Share? What's the Difference?

If you are considering purchasing a property in the Highlands & Islands of Scotland, you may come across reference to "crofting". Crofting is a land tenure system which can only be found in certain areas of Scotland. The first step when purchasing a house with croft land is to confirm whether the house is decrofted. This is the process whereby a house is removed from the croft and is therefore no longer subject to crofting legislation. If you require a mortgage to purchase the house, then it is almost always necessary for the house to be decrofted.

Your lender will only provide you with loan funds over the decrofted house and garden area and therefore you will require to have sufficient funds available in order to purchase the croft land.

The next step of the purchase process is to ascertain whether the croft is owned or tenanted. If a croft is owned, you will have a title deed for the land. If the croft is tenanted, you will have a landlord and be required to pay rent. It is very difficult for a landlord to remove a tenant from croft land and as a crofting tenant, you will have the opportunity to purchase your croft from your landlord.

The process of purchasing an owned croft and a tenanted croft is very different.

When purchasing an owned croft, you will generally be able to purchase the house and the croft at the same time. Following your purchase, your solicitor will notify the Crofting Commission that you have purchased the croft. Your details will be included in the Register of Crofts which is available online on the Crofting Commission’s website. Your purchase may also require to be registered on the online Crofting Register.

The process of purchasing a tenanted croft is more complex. To purchase a tenanted croft, an assignation application must be submitted to the Crofting Commission to obtain their consent for the purchase to proceed.

The Crofting Commission will consider various factors when reaching a decision on whether to allow the purchase, including whether you have any crofting experience and what your plans are for the croft in the future.

Due to the requirement for the application to the Crofting Commission, the timescale for purchasing a tenanted croft is generally longer than that of purchasing an owned croft, normally by months.

You may decide to purchase the house and the tenanted croft separately. This would allow you access into the house at an earlier date as you would not have to wait until the Crofting Commission has decided on the assignation application. To do so, you would have to be willing to accept the possibility that the CroftingCommission may refuse their consent to your purchase. This would mean that you would own the house but would not have the tenancy of the surrounding croft land. Alternatively, provided you were not in a rush to move, you could wait for the Crofting Commission to make their decision and purchase the house and the croft at the same time.

A further element to a purchase of a croft is whether there is a grazing share. This is a share in a communal area of ground which is used by the crofters in the township. This provides additional grazing ground which can be used in conjunction with your own croft. You will be considered a tenant of the grazing share and may have to pay a rent.

If you are purchasing a tenanted croft which has a grazing share, the share will normally transfer at the same time as the tenanted croft.

However, if you are purchasing an owned croft then an assignation application will be required to be submitted to the Crofting Commission for their consent. This means that your purchase will now comprise three elements, the house, the owned croft and the tenanted grazing share. Generally, the value in a transaction will be in the house and the croft and therefore it is common for the house and croft to be purchased together, and the grazing share purchased at a later date following the decision from the Crofting Commission.

Purchasing a property which has a crofting element can be complex and it therefore beneficial to speak to a solicitor with crofting law experience.