Register of Persons Holding a Controlled Interest in Land: third sector bodies take note!

Register of Persons Holding a Controlled Interest in Land: third sector bodies take note!

Although the trend has been, in recent years, for third sector bodies to be structured as companies limited by guarantee or as Scottish charitable incorporated organisations (SCIOs), there are still a considerable number of third sector bodies (including charities) which are structured as unincorporated associations or trusts. If this applies to your organisation, read on, as you may be obliged to register with the Register of Persons Holding a Controlled Interest in Land.

Register of Persons Holding a Controlled Interest in Land (RCI)

On 1 April 2022, in accordance with The Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) Regulations 2021, the RCI came into being – a new register intended to create transparency as to who controls or influences what owners and tenants of land and buildings in Scotland do with their properties. The RCI is a public register (maintained by Registers of Scotland) of persons that have a “controlling interest” in respect of or “significantly influence” the use, development, and management of Scottish property.

This is not a register of owners of land

The RCI aims to bridge the gap between those who are the registered owners of property and those who are controlling its use. This increased transparency is to give the public free access to information about who is controlling the land and buildings within their communities, irrespective of who technically-speaking owns it.

Who does the RCI apply to?

The RCI applies to any natural person, not being the registered owner or tenant, who exercises control or has significant influence over property. Within the charity sector, SCIOs, CIOs (the English equivalent of SCIOs) and charitable limited companies are all exempt from having to register with the RCI, as such organisations are covered by separate transparency regimes.

If your charity or third sector organisation is structured as a trust or unincorporated association and there is a “qualifying interest” in Scottish property, you must register with the RCI.

Who has controlling interest or significant influence?

The terms “controlling interest” and “significant influence” aren’t defined and will be assessed on a case-by-case basis. However, a person holding such an interest or having such influence, is likely to be a member (of an unincorporated association) or a trustee (of a trust) who can direct the activities of the property, on behalf of the organisation, despite not being the registered owner of the property (or the legal tenant of the property in respect of leases for a period of 20 years or more).

For instance, where a member or trustee is the ultimate decision-maker in respect of any sale or lease/sublease of the property, the granting of access rights, or deciding on use of the property, then they may be deemed to have the controlling interest etc. And this is true whether the person chooses not to exercise such control or influence –their ability to do so means they need to register with the RCI. For the purposes of RCI, such persons will be known as an “Associate”, and the owner of the property (or tenant of a lease in respect of the property, which is for 20 years or more) will be the “Recorded Person”.

With the upcoming deadline to submit to the RCI, third sector organisations structured as trusts and unincorporated associations should work towards identifying any Associate and Recorded Person. Below are some tips to help identify whether this will affect your charity.

Identifying the Recorded Person and the Associate

A Recorded Person

A Recorded Person must be the named owner or tenant (if the lease is for 20 or more years) in the Land Register or the Register of Sasines. They must be different to the person who controls or influences the management of the property.

The Associate(s)

The Associate is the member or trustee that is not the named owner or tenant but who controls and influences the management of the property. If your third sector organisation is structured as an unincorporated association or trust, you should consider:

Are there any members or trustees that are not on the title or lease that control, direct, or dictate the management of the organisation?

  • For an unincorporated association, this would likely be a Chair, Secretary, Treasurer, or Office Bearer
  • For Trusts, this could be the trustee entitled to oversee the management of the trust, the person in charge of the trust funds or one with powers to remove trustees

If you can identify both a Recorded Person and an Associate or multiple Associates, then you will likely need to make an RCI submission.

What information does my charity need to submit to RCI?

Associates must confirm their details to the Recorded Person, who must then update the RCI with all Associates’ details. Some of the key details include:

  • the title number or a description of the property (whether this is land or a building)
  • the Recorded Person’s name and address and any registered number
  • the capacity in which the Recorded Person holds the property (e.g. in their capacity as a trustee)
  • who the Recorded Person holds the property for (the name of the trust or unincorporated association)
  • the Associate’s name, address, any registered number and date of birth (if the Association is an individual), any unique reference number and the date when their association with the owner/tenant began

Making your submission

The submission is completed online on the Registers of Scotland website. The Recorded Person can submit this directly or it can be submitted by an appointed an agent, such as a solicitor.

Failure to comply

For those obliged, failure to register by 31 March 2023 may result in a criminal offence being committed with fines of up to £5000 payable.

We understand that the requirements associated with the RCI will take some getting used to. Gillian Harkness-McKinlay and the Charity team are available to contact, should you require any assistance with making your RCI submission or if you have any questions about whether you are required to make a submission.

Legal disclaimer

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