Register of Persons Holding a Controlled Interest in Land – Extension of Transitional Period

Our Property Law Committee provides an update on the Register of Persons Holding a Controlled Interest in Land following an extension of the transitional period until 1 April 2024

The Register of Persons Holding a Controlled Interest in Land (RCI) came into force on 1 April 2022, with an initial transitional period of twelve months to allow “recorded persons” to register their interest over the land or property.

The RCI is managed by Registers of Scotland (RoS). It is designed to show who has significant influence or control over the owners or tenants (of leases longer than 20 years) of property in Scotland where such information is not publicly available elsewhere. Such owners or tenants are known as “recorded persons”; persons and entities who have significant influence or control over recorded persons are “associates”. There is no cost to record an entry, nor to search on the RCI.

The transitional or “grace period” was due to end on 1st April 2023 and after that date it would be an offence not to have registered in RCI when in scope.

However, the Scottish Government has announced that they have passed a Statutory Instrument to extend the transitional period by a further 12 months to 1 April 2024.

This then allows recorded persons who fall into scope of the Register a further year to ensure that their interests are recorded without facing criminal penalties. Further information can be found on the Scottish Government’s website.

It is worth noting that the requirements and processes for submitting an application to the register have not changed. We have previously published an article in the Journal on RCI. This contains an overview of the RCI and also links to the legislation as well as the article prepared by the Property Professional Support Lawyers Group which provides more detail, and examples, about the application of the regulations.

Further Considerations

The RCI is a register of persons rather than a property register.

Obligations to register in the RCI can arise without any underlying conveyancing transaction: for example the assumption of a new partner or new trustee could trigger a requirement to register.

In our previous article we noted that all practitioners, not just those involved in conveyancing, should consider the application of the RCI and their clients may be affected. In particular, practitioners should be clear whether or not their engagement includes advising on the application of these regulations.

For reference, the five categories of recorded persons set out in the five Parts of Schedule 1 to regulations are (very broadly):
Part 1: Individuals subject to contractual or other arrangements (e.g. option agreements);
Part 2: Partnerships (e.g. where not all partners are registered as owners);
Part 3: Trusts (e.g. where not all trustees are registered as owners);
Part 4: Unincorporated bodies (e.g. clubs, residents associations);
Part 5: Overseas entities (the RCI registration is separate from and additional to any requirements to register in the Register of Overseas Entities).

Solicitors should also consider whether they may fall into scope of RCI. Solicitors who own their own premises under, for example, a partnership may themselves require to register.

Registers of Scotland has dedicated pages which include up to date information on the Register and updates to the legislation on its website

The regulations setting up the RCI, and containing the detailed obligations, are the Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) Regulations 2021 (and amendments). The Statutory Instrument amending the transitional period can also be read.