One of the key purposes of the Registration Act 1617 was to increase transparency in the ownership of land and to allow members of the public to easily access land titles.
Parliament have sought to increase transparency beyond mere ownership to cover anyone who stands behind the owner and has ‘beneficial ownership’ or a ‘controlled interest’. The Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) Regulations 2021 will set up a new register containing details of the persons who have control over the property, where the named proprietor does not make decisions relating to the property.
Who will it affect?
The regulations will apply in situations where another party, other than the registered owner or tenant, has “significant influence or control” over the land in question. It will be the registered owner or tenant’s duty to register with the RCI and failure to do so will result in a criminal penalty by a fine.
Parties who have significant influence or control are likely to be in the following categories:
- persons who have certain contractual or other arrangements with an individual who owns or tenants land (for more than 20 years)
- partnerships and persons who own or tenant land (for more than 20 years) on their behalf
- trusts and persons who own or tenant land (for more than 20 years) as trustees of a trust
- unincorporated bodies and persons who own or tenant land (for more than 20 years) on their behalf
- overseas legal entities
These regulations are likely to be welcomed by rural communities where land is often controlled by trusts and partnership structures. Such provisions are will increase transparency and encourage more effective community engagement.
What Constitutes Control and Influence?
The concept of “significant influence and control” is referred to multiple times in the Regulations. “Control” is defined as a reference to when a person can direct the activities of another and “Significant influence” is a reference to where a person is able to ensure that another person will typically adopt the approach that the person desires.
Exceptions
The regulations set out a number of bodies that are exempt from the registration requirements including companies, LLPs, public authorities and charitable incorporated associations. This is because, in the majority of cases, these bodies are publicly transparent elsewhere.
Some parties may also be exempt if they are deemed to be vulnerable and may be at risk of harm if their personal details were on a public register. This would need to be supported by appropriate evidence to show that such registration would put them at risk of violence, the threat of violence or intimation.
The register will operate from 1 April 2022, with a 12 month grace period to register before penalties become applicable for failure to do so.
If you have concerns regarding these new registration requirements, please contact our specialist property team on 0141 221 1919 or fill in our online contact form. At Miller Samuel Hill Brown our expert property lawyers are regularly involved in advising on property finances. Let us work with you to identify your needs and discuss the options available to you.