Register of Persons Holding a Controlled Interest in Land — commercial property update

A new public register, providing information about any person or entity that can make decisions about land, even if they're not registered as the owner or tenant under a long lease (one granted in excess of 20 years), came into force on 1 April, 2022.

The Register of Persons Holding a Controlled Interest in Land (RCI), held by Registers of Scotland, will enable individuals and communities to identify and engage with those who make decisions about land.

Why the change?

The RCI’s principal purpose is to increase public transparency when it comes to who has significant influence and/or decision-making control in relation to land and property in Scotland.

It isn't always evident who makes these decisions.

While a search of the General Register of Sasines or the Land Register of Scotland will provide details of the owner or tenant under a long lease, it won't show who has a controlling interest where that person is an opaque legal entity, for example, an overseas company, or where title is held under an arrangement, such as a trust.

Who needs to register?

Land and property owners, or tenants under a long lease, may have a responsibility to supply information to the RCI where there is someone with significant influence or control, and the information is not publicly available elsewhere (for example, in the People with Significant Control Register (PSC) at Companies House).

There are five main categories of people or entities who will have to provide details —

• Those who have certain contractual or other arrangements with an individual who owns land or is the tenant under a long lease giving them influence or control over significant decisions in relation to the land. Essentially people who hold land for someone else

• Partnerships, including any Scottish partnership where at least one partner is an individual, and those who own or tenant land under a long lease on their behalf

• Trusts and those who own or tenant land under a long lease as trustees of that trust

• Unincorporated associations and those who own or tenant land under a long lease on their behalf

• Overseas legal entities

If you fall into one of these five categories, then it's likely the RCI will be relevant to you and that you now have new legal duties.

Who is exempt?

Those owners and tenants of long leases who already comply with other transparency regimes including —

• The PSC register held by Companies House, including UK companies, limited liability partnerships, and Scottish limited partnerships

• Public authorities falling under the Freedom of Information Act requirements

• Charitable organisations

It’s already clear here where control lies, so including these entities in the RCI would create unnecessary duplication.

What do I need to do?

Owners and long lease tenants need to supply the RCI with information about their controlling interest from 1 April 2022.

This should include details of those with significant control (known under the RCI as the associate) including their name, address, and contact details.

There is a 12-month grace period, expiring on 31 March next year, during which people can submit information before penalties will apply.

Registration will be open to owners, tenants under long leases and their representatives. Details must be provided within 60 days of the relevant interest coming under an associate's control.

The rules will apply retrospectively, meaning those who already own land or property, or were tenants under a long lease, over which associates held a controlling interest before 1 April 2022, also need to submit information before 31 March 2023.

What happens if I don’t comply?

If the registered owner or tenant fails to provide the necessary information within the grace period, or provides a false or misleading entry, they will have committed a criminal offence, punishable by a fine of up to £5,000.

If you think the introduction of the RCI affects you, we’d be happy help guide you through the process. Please get in touch with me to discuss. Plus if you'd like to read more, my colleague Lynne McElroy recently wrote about the RCI from a rural perspective.

You'll also find more legal commentary on our news and views page.