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Landowners – criminal penalties if someone else is pulling the strings

The Register of Persons Holding Controlled Interest in Land (the “RCI”) became operational on 1 April 2022 and the extension of the submission deadline ended on 1 April 2024. The aim of the RCI, which is maintained by Registers of Scotland, is to improve transparency by making information on who has control of land in Scotland publicly available.

The Land Register and Sasines Register contain the names of the owners of properties and also the tenants of registrable leases (these being leases which are over 20 years’ duration). The purpose of the RCI is to address cases where the recorded owner or tenant of a registrable lease does not in fact have control over the property, or the power to make decisions relating to it. The RCI addresses these situations by containing details of the persons who do have such control/power.

“Recorded persons” and “Associates” – Terminology to be aware of

The law which governs the RCI is contained within the Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) Regulations 2021. These regulations require the recorded owner or tenant of a registrable lease (known as the “recorded person”) to provide the RCI with their details, together with the details of the person who exercises control over the property (known as an “associate”). Whereas the recorded person has a “controlled interest” in the property, the associate has a “controlling interest”.

A useful example which illustrates the purpose of the RCI is as follows:- a partnership is the recorded owner of property, but it is the general partners of the partnership who actually exercise control over the property. In this scenario, the partners require to be disclosed as associates under the RCI. A second example is where property is owned by a Trust but not all the current trustees are narrated in the titles; in this example, those trustees not narrated would need to be disclosed as associates.

Time limits under the Regulations

The Regulations provide that details must be provided to the RCI within 60 days of a person gaining a controlled interest. For controlled interests existing at 1 April 2022, the recorded person had until 1 April 2024 to register (as a result of a 24-month grace period). If you think you should be registered as either a recorded person or an associate, please get in touch and we will provide you with tailored advice.

Consequences of non-compliance

It is a criminal offence for recorded owners or tenants to whom the Regulations apply to fail to disclose information or to provide false or misleading information. The offence is punishable by a fine of a maximum of £5,000. Importantly, owners and tenants which are entities and subject to other transparency regimes (such as the Persons with Significant Control rules), including UK Companies, SCIOs (and English equivalent), Limited Liability Partnerships, Co-operative and Community Benefit Societies and Public Authorities, are excluded from the duty to disclose information to the RCI.

If you are a landowner or tenant of a registrable lease and are concerned that you may be under a duty to provide details to the RCI, please contact a member of our commercial property team who will be happy to assist.

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