When is a house not a house? When it’s a croft.
Technically, when I say I’ve had an offer verbally accepted on a house, that’s not strictly true. I am, in fact, buying two croft tenancies, one of which happens to have a house on it. Many crofting tenants have bought out their tenancies and become owner-occupier crofters, these two still remain as tenancies and the house site has not been decrofted, so the Scottish Ministers own the land and, assuming that I’m considered a suitable person to be assigned the tenancies, I will have to pay them rent for the crofts until I can buy them out. The buy-out figure is usually 15 times the annual tenancy (which will not be huge – to give you an idea, the 3.12 acres that go with the house we currently live in was bought out by the previous owner for under £100) but once you’ve become an owner-occupier, if you sell the land on within ten years (recently increased from five years), you have to pay half the difference between the amount you paid and the current value back to the landlord.
It’s all a bit of a legal minefield and having a solicitor who understands crofting law is absolutely essential. The formal offer that went in for these two tenancies ran to 23 clauses on top of the Scottish Standard Clauses and includes things that wouldn’t have crossed my mind, such as ensuring the crofts are sold “together with the whole permanent improvements, including the dwellinghouse” (it would be a shame to pay all that money and find they’ve bulldozed the place…), that “it is an essential condition of this offer that the Crofting Commission consents to the assignation of the tenancies” (it would also be a shame to pay all that money and not be able to do anything with the place) and various other clauses that ensure I don’t get stuck with any very large bills or long-lost claimants to the tenancies popping out of the woodwork.
The other big stumbling block is because the purchaser of the tenancies doesn’t own the ground the house sits on, it’s completely unmortgageable. Even the bridging loan companies I rang wouldn’t touch it (not enough equity in our current house to back it up). One absolute right a crofting tenant has, however, is to buy the house site from the landlord and have it decrofted – usually an area of 0.2-0.5 acres is permitted to be taken out of crofting tenure to give some garden space as well. This then makes the house suitable for mortgage lending purposes. I’ll talk about finances in another post – I will be completely transparent about money on this blog – but I’m in the very fortunate position of being able to borrow money from family to make the initial purchase, on which we’ve agreed I’ll pay interest of Bank of England base rate plus 3%.
One of the conditions of the Crofting Commission thinking me a suitable person to be assigned the tenancies is that I work the crofts. So I’m not only taking on a renovation project, I’m taking on just under 10 acres of fields, which means I’m going to be learning to keep sheep and make hay as well. Never a dull moment!