RCI compliance — act now to avoid penalties

As a refresher, the aim behind these rules is improving transparency in land ownership: making it easier for people to find out who has significant influence or control over land when that information can’t be found elsewhere.

Failure to comply means risking being charged with a criminal offence and attracting large fines.

While the register went live in April 2022, the Scottish Government allowed a grace period delaying the implementation of the criminal offence provisions initially until 1 April 2023. This was later extended to 31 March this year.

As such, those affected by the legislation need to act now to ensure they comply by 1 April.

What do you need to do?

The first step is to check if you have a duty to register with the RCI.

The regulations create rules for land owners or tenants with a lease longer than 20 years, classifying them as a ‘recorded person’.

It also creates a class of ‘associates’ who do not own the land but have the right to control how the land is managed.

A ‘controlling interest’ generally means there is someone else sitting behind the registered owner or tenant who is able to influence what the owner or tenant does with the property.

I am in a partnership or other organisation which has ownership of land; do I need to make an entry to the RCI?

Maybe.

If you own or have a long lease of land as an individual or a trust, partnership, or unincorporated body you may have an obligation to register and should take advice, particularly where the title deeds or lease are held in the name of just one partner or trustee, for example, or the land is owned by an individual but used by the partnership.

Plus, properties where ownership involves overseas entities may also have an obligation depending on the way the organisation is structured.

What information do I need to submit?

Requirements include —

• A recorded person’s name and address

• Details about the land and its registration information

• Details of the recorded person who owns or leases the land

• Name and address of associates or, where a security declaration has been made, a copy of the statement

• The date of any notice given to the Keeper

What if I fail to register?

Now the grace period is coming to an end those who are obliged to but fail to register will risk a fine of up to £5,000 as well as being charged with a criminal offence.

Will my solicitor contact me if I need to register?

No, not automatically as the register also applies retrospectively, not just to any new purchases or leases. It is important to stress that the responsibility lies with the land owner or tenant and the associates. While your solicitor can submit an entry to the register on your behalf, you must contact them to discuss in advance.

What help is available?

The regulations are broad and technical in nature, while Registers of Scotland provides some examples not all situations are covered. We are working hard with clients to navigate the new rules and how they apply to individual circumstances to ensure compliance by 1 April.

If you have any doubt about your obligations as a recorded person or as a potential associate, then please do get in touch.