The government transparency drive around property ownership will soon be backed up by criminal penalties as the “grace period” ends on 1 April 2024. Owners of land and tenants with long leases should make sure they are “RCI-ready” to avoid hefty fines for not disclosing decision-makers who aren’t on the title deeds.
On 1 April 2022 a new public register opened: the Register of Persons Holding a Controlled Interest in Land. This mouthful is usually abbreviated to “RCI”. It is managed by Registers of Scotland, who also run the Land Register.
The RCI is relevant where the Scottish property registers – either the modern Land Register or the older Sasine Register – don’t tell the whole story about who makes decisions about a property. Owners, and tenants with long leases (with a term exceeding 20 years) registered in one of the property registers, must submit an entry to the RCI if there is an “associate” who exercises “significant influence or control” over the owner or tenant whose name appears on the title (“recorded person”), but who is not themselves named on the title.
There is a two-year grace period, so entries are required by 31 March 2024 (watch out for the Easter holiday – in practice that means Thursday 28 March!) From then, recorded persons who don’t register may face fines of up to £5,000.
The regulations are complex, difficult to follow and full of exceptions (and exceptions to the exceptions!) but the key points are:
We already have other regimes for:
If the recorded person is any of these, RCI doesn’t apply. Otherwise, RCI applies in specified scenarios which are set out in legislation. The rules are complex but here are some common examples:
There is an exemption covering companies whose shares are publicly traded in the EEA and a small number of other countries.
There is also a Register of Overseas Entities (ROE) maintained by Companies House. This is separate and both regimes could apply to the same entity in respect of the same land, or an entity could be exempt from ROE but not from RCI.
The duty to register applies to recorded persons, not associates. Recorded persons need to check that an associate’s details are correct before submitting them, and must tell associates that their details have been sent to the RCI. The associate must then advise the recorded person of any changes to their details.
If the recorded person doesn’t register, the associate must tell the recorded person that they are an associate and provide their details. Not doing so is punishable by a fine of up to £5,000. But it is still the recorded person’s job to make the RCI entry, not the associate’s.
Transparency has public benefits but can be dangerous for some. If the associate is at risk of violence, abuse or intimidation, they can apply to have their details on the RCI hidden from public view. An example is if a court has made a non-harassment order, or a police officer confirms the person could be in danger from having their details publicised. Evidence of the danger is needed.
This article is a broad summary of a very complex, and often confusing, set of rules. It can be difficult to work out if RCI applies to you. If you think it might but aren’t sure, or if you would like guidance with making your entry, please get in touch with Tim Macdonald or your regular Anderson Strathern contact for advice.
You may also be interested in the following resources: