Purpose
The purpose of these regulations is to improve transparency in land ownership in Scotland. They create a new register, the "Register of Persons Holding a Controlled Interest in Land" ("RCI"), to be maintained by the Registers of Scotland.
As the name suggests, the RCI is to provide details of anyone holding a controlling interest in land, which is not available from the title information, available for all to access.
Controlling interest and registration
The regulations provide that from 1 April 2022 an owner of land, or tenant of a lease of more than 20 years, must provide details for registration of any party who has significant influence or control over the owners or tenants dealings with that land. Such a party is termed an
"associate".
Where the associate is an individual, the information required, and kept on the register, will include their name, address and date of birth. For corporate associates their name, registered office address and registered number are mandatory.
The owner or tenant must notify the associate of their intention to include their information on the RCI. For their part, associates must provide any information required to the owner or tenant upon request.
The owner or tenant must also notify the Register when someone ceases to be an associate or the owner or tenant ceases to be a person to whom the regulations apply, or of any change in information previously provided.
Timescales
This information must be submitted within 60 days of the associate acquiring a controlling interest in the owner or tenant. However, there will be a grace period of 12 months from 1 April 2022 during which no penalties will apply for failure to register timeously.
Practical effect
Certain trusts and partnerships, overseas companies and unincorporated associations owning or leasing land as aforementioned will be amongst those most commonly affected by these regulations. For example, where a partnership or trustee own land, other general partners or trustees not named on the title sheet will be associates. In the case of an unincorporated association holding property, any person responsible for the general control and management of the administration of the body not noted on the title will be an associate. In the case of overseas companies owning land, any party directly or indirectly holding more than 25% of the voting rights of that company will be an associate.
Protections
Any associate concerned that the inclusion of their details on the RCI would put them, or an individual connected to them, at risk of violence, abuse, threat of violence or abuse, or intimidation may make and submit to the Keeper of the Register a security declaration (supported by appropriate documentation) to this effect. The Keeper of the Registers will determine whether this application is reasonable, and if she finds it is not there is a right of appeal.
Exemptions
Parties subject to other transparency regimes, including companies, LLPs, charitable incorporated associations and public authorities are exempt from the obligation to report associates under the regulations.
Offences and Penalties
Failure to comply with the reporting and certain other obligations under the regulations will be a criminal offence, liable to a fine of up to £5,000.
For further information upon any issues arising in this article, please contact Louise Harkness or Chris McLeish.
