The Register of Persons Holding a Controlled Interest in Land (RCI) was launched on the 1 April 2022. This new register, which is managed and maintained by the Registers of Scotland, was established as a result of The Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) Regulations 2021.
The overarching goal of this legislation was to increase transparency in land ownership in Scotland. The resultant register, the RCI, will make it easier for the public to find out who has control and power over the decision-making process in relation to land and property in Scotland where this information is not easily identifiable or publicly transparent elsewhere.
For example, those with control over the decision making process in relation to land and property may not be the registered owners of the property in question and, therefore, they may not appear in the Land Register of Scotland or in the General Register of Sasines.
The RCI will exhibit information about those who have significant influence or control over the owner or certain tenants of land and property in Scotland, ensuring that this information is readily available to the public. It is completely free to submit to, and to search the register.
Key Definitions within the RCI:
- Recorded person: those named as the owner or tenant (with a registered or recorded lease of over 20 years) of land in the Land Register, General Register of Sasines, the Particular Register of Sasines or the Burgh Register where an associate is present with a controlling interest over the land.
- Associate: those who have a controlling interest in the land or over the recorded person despite not being the recorded owner or tenant of the land.
- Controlling interest: those with a controlling interest have the ability to influence the decisions made in regards to land or property (such as decisions relating to the disposal, leasing or changing the use of land) despite not owning it.
Who is affected?
The regulations apply in situations whereby a party other than the registered owner or tenant (with a registered or recorded lease of over 20 years) has a controlling interest over the decision making in relation to the land in question. In situations such as these, there is now a responsibility on recorded persons to supply information to the RCI about any controlling interests in the land. When the register was first introduced, a transitional period of 12 months was implemented in order to allow those within its scope to register their interests over land or property in Scotland. However, the Scottish Parliament have now approved an extension of this initial grace period, meaning that those within the scope of the RCI now have until the 1st April 2024 to register their interests before being subjected to penalties for non-compliance.
Associates (those with a controlling interest in the land) will likely fall into one of the following categories:
- persons who have certain contractual or other arrangements with an individual who owns or tenants land (for more than 20 years)
- partnerships and persons who own or tenant land (for more than 20 years) on their behalf
- persons responsible for the general control and management of the administration of an unincorporated body of persons who own or tenant land (for more than 20 years) on their behalf
- trusts and persons who own or tenant land (for more than 20 years) as trustees of a trust
- overseas entities
Where there are associates present, the recorded person must register these interests with the RCI within 60 days of that association beginning and it is vital that the RCI is kept up to date with any changes in this regard. Failure to do so after the 1st April 2024 may result in a criminal penalty by way of a fine of up to £5,000.
Example of Recorded Persons, Controlling Interest and Associates:
A and B are partners of a Dental Practice and they are named in the Land Register as owners of the property. C is a new partner of the practice, however, C is not named in the Land Register as an owner of the property. C is a partner of A and B so C falls into the category of having a controlling interest as C can influence the decisions made in regards to the property, despite not owning it. Therefore, A and B must notify the RCI of Cs interest in the property. (A and B are recorded persons, C is an associate who has a controlling interest in the land).
Exceptions:
There are a number of bodies that are subject to other transparency regimes, and therefore are exempt from these new registration requirements. Among the exceptions are charitable organisations, those who report to the Register of People with Significant Control including UK companies and Limited Liability Partnerships (LLPs) and public authorities that are legally bound to comply with the Freedom of Information (Scotland) Act 2002 or the Freedom of Information Act 2000 legislation. A complete list of the categories of exemption can be found here.
Additionally, associates may request (via a statutory declaration) that their details are excluded from the RCI if they would be at risk or threat of violence or abuse, or intimidation if their personal details were to be published on this public register. This request would need to be supported by sufficient and appropriate evidence.
If you have concerns regarding these new registration requirements or would like any further advice, please contact our specialist property team.
