The Register of Persons Holding a Controlled Interest in Land (RCI) is here, and will improve transparency on who has control over Scottish land.
Launched on 1 April 2022, the register reveals whether there is someone who has a controlling interest over the owner or over a tenant with a registered or recorded long lease of more than 20 years, in Scotland where this information may not be publicly transparent elsewhere.
Bringing the recent Scottish government legislation to life, the publicly available RCI has been established and will be maintained by Registers of Scotland. It will be free to access for submissions and searches.
Forming part of the wider land reform agenda, the regulations are intended to ensure there can no longer be categories of landowner, or tenants with a registered or recorded long lease of more than 20 years, where, intentionally or otherwise, control of decision-making is obscured.
It is anticipated that the new register, which received unanimous approval in Scottish parliament, will empower people and give them the opportunity to understand who controls landowners and tenants. It will also be useful in policy-making by giving a fuller picture of who controls decisions about land in Scotland.
Ownership or tenancy of Scotland's land can be held in a variety of structures, such as trusts and partnerships. These can be based anywhere and sometimes involve a complex tier of entities. This can make it difficult to identify who is making decisions about what happens to the land.
Details of the person or entity holding title is already available in the property registers, the Scottish Land Register and the Register of Sasines. However, that individual or entity may not be the person who controls decisions.
This is where the RCI will shed new light. Alongside other transparency regimes, it will become possible to look behind every category of entity in Scotland, including overseas entities, partnerships and trusts, to see who controls or may control decision-making in relation to land.
There are various categories of people and entities who may be in scope and have to submit their details to the register. These are:
persons who have certain contractual or other arrangements with an individual who owns or tenants land
partnerships and persons who own or tenant land on their behalf
trusts and persons who own or tenant land as trustees of a trust
unincorporated bodies and persons who own or tenant land on their behalf
A 12-month transitional period began on 1 April for people to submit their entries. After this, penalties may become applicable for failure to comply and giving false or misleading information.
There will be a duty on landowners or tenants with a long lease – of more than 20 years – to supply information to RCI where:
someone has the power to exercise significant influence or control over their decisions in relation to the land
the information is not publicly available elsewhere, for example from the People with Significant Control Register at Companies House.
Schedule 1 of the regulations provides examples of significant influence and control, and exemptions. Schedule 2 of the regulations provides a list of persons subject to other transparency regimes who are exempt from having to register. You can access more information on the legislation and regulations on which RCI is based.
Related competencies include: Cadastre and land administration, Legal/regulatory compliance
While it looks as though the RCI will be easy to use, the same cannot be said for the regulations. Affected owners and tenants of land may struggle to work out whether they need to submit details or may be exempt – particularly if the ownership or control structure is complex, or they do not know whether the relationship they have with another person in relation to the land amounts to significant influence or control.
The guidance accompanying the RCI will help, but there are still likely to be many instances where the owner or tenant decides to seek professional advice on making their submission. After the 12-month transition period, there are potentially severe penalties for failing to comply.
It will then become even more crucial for persons in the scope of these regulations to be aware of the duties and make a submission if required, or, in the case of those with the controlling interest, provide information to the person who has to make the submission.
Publicising the regulations and the RCI will need to be a regular and ongoing task for the Registers of Scotland, to ensure that as many as possible of those in scope are aware of the requirement to register.
BUILT ENVIRONMENT JOURNAL
Jen Lemen FRICS 28 March 2023
Mike Appleby 22 March 2023
BUILT ENVIRONMENT JOURNAL
David Stow 16 March 2023