News & Updates
New Level of Transparency in Land Ownership
On 1 April 2022, new regulations came into force which will ensure anyone with significant influence or control over an owner or tenant (under a lease of more than 20 years) of land in Scotland is listed on a publicly accessible database.
The Register of Persons Holding a Controlled Interest in Land (RCI) has been developed to promote transparency of individuals who have decision-making powers over land ownership in a bid to empower community groups, tenants, and members of the public to better understand who is in charge of specific areas of Scottish land.
Many will already be familiar with the concept of a Legal Guardian or a Power of Attorney, and in Scotland those who have been appointed to these roles are listed on a national register which is overseen by an Ombudsman. A similar system listing individuals with significant control in land would apply more transparency to them, which is why the new RCI is being created. Registers of Scotland will be managing this Register, which will be available to access digitally and free of charge.
Those who will be subject to this Register include individuals who have certain contractual arrangements with an owner or tenant of land, people involved in partnerships who own or tenant land on their behalf, and those who have been appointed as Trustees to Trusts benefiting land, tenants or landowners.
Unincorporated bodies and overseas entities will also be included, making it easier for people to find out who exactly has a controlling interest over a piece of land without this information being obscured by a company name, as can sometimes be the case without such a Register.
Tenants of rental properties are likely to find this new legislation particularly useful. A tenant living in a rented property which is managed by a letting agent may never deal directly with their landlord, or have any information on who actually owns the property. This new Register will provide access to more information on landlords, and afford more transparency and accountability in the event of disputes.
The public will also have the opportunity to find out who controls land in their communities, which may empower people to engage with decision-makers impacting local sustainable development.
There are some exceptions. For example, individuals who are already included in the Register of Persons with Significant Control will not be added to the new RCI. Also excepted are UK Limited Companies, UK Limited Liability Partnerships and public authorities, because they are already regulated by existing Registers which provide a similar function.
In certain cases, those who require anonymity due to security concerns will also be exempt, and will have the opportunity to opt-out of featuring on this Register.
Those who fail to register, or who provide incorrect or misleading information to the RCI could face a fine of up to £5,000. There will however be a one-year grace period from 1st April 2022 to provide those affected ample time to ensure they have followed the necessary guidance and provided all relevant information.
Once the initial onboarding of getting clients recorded to the RCI is complete, we anticipate that a recent search of the RCI and, if necessary, production of a form to update the register will become standard diligence items in transactions involving land in Scotland.
We would advise anyone who thinks they may be affected by this new law to seek legal advice as the legislation comes into force. A solicitor will be able to provide guidance on eligibility and requirements to submit information, as well as helping to navigate the process to ensure all relevant details are provided.
This article first appeared in The Scotsman
The information contained in this newsletter is for general guidance only and represents our understanding of relevant law and practice as at May 2022. Wright, Johnston & Mackenzie LLP cannot be held responsible for any action taken or not taken in reliance upon the contents. Specific advice should be taken on any individual matter. Transmissions to or from our email system and calls to or from our offices may be monitored and/or recorded for regulatory purposes. Authorised and regulated by the Financial Conduct Authority. Registered office: 302 St Vincent Street, Glasgow, G2 5RZ. A limited liability partnership registered in Scotland, number SO 300336.