NEW REPORTING DUTY FOR LANDOWNERS AND TENANTS
The Register of Persons Holding a Controlled Interest in Land (RCI) may have taken a number of years to come into effect, however, from 1 April, it becomes reality.
From that date, the RCI will be open for registrations, with an obligation upon land and property owners and tenants (under a long lease) to provide information to it. Failure to comply with the reporting requirements of the RCI Regulations will be a criminal offence and could result in a fine of up to £5,000.
The RCI was introduced with the aim of improving transparency of land ownership and is a key component of the Land Reform (Scotland) Act 2016. The intention is to make it easier to determine who has control over a particular area of land in cases where it is not publicly available or easily identifiable from looking at the title.
Maintained by the Keeper of the Registers of Scotland, the Register will show information on those people who have influence or control over the owner or tenant under a long lease (more than 20 years) of land and/or property. The Register will be publicly available and free to search.
Obligation to register
The Regulations provide that an owner of land or a tenant under a long lease (the ‘recorded person’) must provide details of any party having significant control or influence in relation to that land or property (an ‘associate’). This information must be notified to the RCI within 60 days of the party becoming an associate, and the recorded person must notify the associate that they intend to include their information on the RCI.
In some cases, the landowner or tenant may not become aware of someone becoming an associate and there will be an obligation on the associate to notify them and provide any information required to update the RCI.
The RCI must also be updated by the landowner or tenant when:
1. A party ceases to be an associate.
2. The owner or tenant ceases to be a party to whom the Regulations apply.
3. There are any other changes to the information contained on the Register.
Who will be affected?
Trusts, partnerships, unincorporated associations and overseas entities that own or lease land will be those most affected by the Regulations. Among those who will be associates, and therefore will require to be added to the RCI, are the following:
• Partnerships: Partners not named on the title sheet or those who are no longer active Partners but still have control over the direction of the Partnership.
• Trusts: Trustees not named on the title sheet or parties who have the ability to control the trustees or their appointment.
• Unincorporated associations holding property: Any person with control and management of the body (such as a golf club) but not noted on the title (such as a chairperson or other office bearer).
• Overseas entities: Any party holding more than 25% of the voting rights of that company, along with those who control the board or otherwise have control.
It is not yet clear whether situations where there are contractual arrangements in place affecting land, such as an option agreement, will require to be disclosed.
Who is not affected?
The Regulations have been drafted so as not to duplicate information contained in other public registers. On this basis, parties such as UK Limited Companies, LLPs, Scottish and English Charitable Incorporated Organisations and local authorities are exempt from the obligation to report associates under the RCI Regulations.