Struan Ferguson, Partner at Blackwood & Smith LLP
Time is running out to comply with new obligations in relation to the Register of Persons Holding a Controlled Interest in Land!
After two years, the grace period given by the Scottish Government for registration in the Register of Persons Holding a Controlled Interest in Land (RCI) is finally coming to an end on 1 April 2024. From that point onwards, those in scope of the RCI regulations will be required to be registered in the RCI or face potential criminal penalties including fines of up to £5,000.
What is the RCI?
The RCI is the Register of Persons Holding a Controlled Interest in Land (RCI). This was set up by the Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest In Land) Regulations 2021. The legislation was designed to make Scottish property records more transparent by disclosing the identities of persons who have control over land or property, but whose details do not appear on the titles for such land and property.
Scotland’s land and property registers are publicly available and anyone can check who owns, or has a recorded long lease (20+ years) over, a property or land. The issue being addressed by the regulations is that the titles do not necessarily tell the full story. A title could be held in the name of one person, but that person may well be subject to control or significant influence by another person, and this would not be evident from the title. Similarly, properties held in Trusts or by traditional Partnerships may not show on their titles the details of the current Trustees or Partners.
The Scottish Government’s desire was to introduce a transparency regime so that those exerting control or influence over property and land can be identified.
The RCI was therefore set up to achieve this.
Associates and Recorded Persons
The RCI regulations are quite complex, particularly in determining what “control” and “significant influence” mean in the context of land and property. Two definitions from the regulations are of particular importance:-
- A Recorded Person is the person or entity which holds a recorded or registered title to the property or land. This would be the owner of the property or land in the traditional sense but who, in this case, is subject to control or significant influence from another party, called an Associate.
- The Associate is the definition of the person or entity who has control or significant influence over the Recorded Person.
Registration in the RCI
The regulations require that the Recorded Person registers certain details about themselves, the property and their Associate(s) in the RCI, while also giving notice to the Associates who are then obliged to verify the information which has been provided by the Recorded Person to the RCI.
Even where the Recorded Person has not registered in the RCI, the Associates are still required to do so.
Registration in the RCI is to take place within 60 days of the control or significant influence commencing.
The obligations under the RCI are also ongoing, so where new Associates become involved, or former Associates cease to have control or influence, the Register must be updated accordingly.
How to Register
The RCI is maintained by Registers of Scotland, the same public organisation that manages the Land Register of Scotland and the Register of Sasines where all property titles in Scotland are held. There is no fee charged by Registers of Scotland for registration in the RCI and there is also no cost to search the RCI, which is publicly available.
The RCI has been designed to be accessible to parties without necessarily having the assistance of a solicitor, although some people will require advice on whether or not they are actually affected by the legislation, while others may require some assistance in providing details of their title which must be included in the RCI registration (particularly if the title is still recorded in the old Register of Sasines as opposed to the newer Land Register of Scotland).
Who doesn’t need to apply for registration in the RCI?
In short, most people need not worry about the RCI. If you own a property and your name appears on the title, then provided that you are not owning that property while under control or significant influence of another, then you need not register in the RCI. Therefore, the vast majority of people’s own homes or indeed business properties need not be registered in the RCI. Anyone looking to find out who owns these properties will simply look at the existing titles.
Crucially, any properties owned by people or entities which are subject to existing transparency regimes are also not obliged to register in the RCI. This means that where the property is held by limited companies or limited liability partnerships, all of which are registered with Companies House and where those controlling or influencing the company or LLP are required to register as persons with significant control, no RCI registration is required.
Other organisations which are exempt are public authorities, charitable incorporated associations and building societies.
Although all of the above are exempt insofar as they are recorded persons - i.e the actual holders of the title - they are still potentially within scope of the RCI if they have control or influence over another party, in which case they would be an Associate.
Who does need to register in the RCI?
This is quite a complicated question and there will be myriad examples of situations where someone may require to register in the RCI, but some of the more common examples will be the following:-
- An individual owning a property where they are subject to some form of contract giving another person control or influence over the ownership of their property.
- A traditional or unincorporated partnership (as opposed to a limited liability partnership). A traditional partnership is not registered with Companies House, and a property title may well have been taken in the names of the partners who were the partners at the time of the property being acquired by the partnership. If the partners have then changed over the years, then an RCI registration is required to give notice of the current partners who have control over the partnership property.
- A Trust is an arrangement where a property is held by trustees on behalf of beneficiaries. If the Trust has a title to property, the title may not disclose details of the current trustees of that Trust, so an RCI registration is then required.
- Another common example will be unincorporated associations such as clubs. Where, for example, a club owns land or property, such as a golf club, football club or tennis club, and their title to the land is recorded in the name of the unincorporated association as opposed to within a company, then the club is likely to also have to register in the RCI, with Associates being those who have control over the club such as the Chairperson, Treasurer, etc.
This is not an exhaustive list of those who may be affected by the RCI and there are various other situations where registration may be needed.
What you should do
The regulations are complex and many people will be confused as to whether or not they are required to register. The regulations cannot however be ignored. They are already in effect and where applicable, registrations should already have taken place by now. There has simply however been no criminal penalty up to this point, but those criminal penalties do take effect from 1 April 2024 onwards. Ensuring prompt compliance with the regulations is therefore important.
The Registers of Scotland website (Register of Persons Holding a Controlled Interest in Land - Registers of Scotland (ros.gov.uk)) has extensive information designed for use by laypeople, without necessarily having the assistance of a solicitor, and includes specific guides to various different types of entity which might have to register. That should therefore be the first port of call for anyone looking to decide if they are within the scope of the regulations.
Contact us for advice
At Blackwood & Smith LLP. we can advise you on your obligations in relation to the RCI in a way that is as simple and straight forward as possible. Our team would be delighted to assist you, please contact us on 01721 720131 or email us at This email address is being protected from spambots. You need JavaScript enabled to view it. to discuss.
