The Register of Persons Holding a Controlled Interest in Land (RCI) is a significant development in Scotland’s land ownership transparency. Launched on the 1st of April 2022, this register aims to shed light on who controls the decisions related to land and property ownership in Scotland.

Purpose: The RCI was established as part of the Land Reform (Scotland) Act 2016 to enhance transparency in land ownership. It seeks to complement existing registers by revealing individuals or entities that significantly influence or control decisions regarding land and property.

Scope: The RCI covers both tenants (with a land or property interest of more than 20 years) and owners. Generally, if you make decisions regarding land you own or lease, there is usually no need for RCI submission. However, if there is an influential figure behind the scenes, not listed on official documents, exerting significant control over the owner/tenant, then an entry is necessary. Examples of circumstances which would fall within the scope of the RCI include:

• where land ownership or leasing is undertaken by an unincorporated association and an individual, not specified on the registered title or lease, assumes responsibility for the overall control and management of the administrative affairs of the unincorporated association, such as an office bearer;
• when a partnership assumes ownership or leasing rights to a property, and a general partner, unlisted on the official title or lease documentation, holds authority to enact governance decisions or possesses the privilege to appoint or dismiss any partners within the partnership;
• where an individual owns or leases a property and another individual wields significant influence or control over decisions pertaining to how that property is to be used;
• where land is owned or leased on behalf of a trust, and an individual, not formally listed on the registered title or lease, holds the authority to oversee the allocation of assets or funds, appoint or dismiss trustees, or exert substantial influence or control over the decision-making processes of the trust, despite lacking a formal governance position; and
• when an overseas entity owns or leases property, and an individual, either directly or indirectly, commands more than 25% of the voting rights within the overseas entity or possesses the authority to appoint or remove a majority of the board of directors within said entity. Note this overlaps with the Register of Overseas Entities (RoE) which is a UK wide register.

Exemptions: Entities already governed by other transparency frameworks, such as Scottish Charitable Incorporated Organisations (SCIOs), UK companies, Limited Liability Partnerships, cooperative or community benefit societies, and public authorities, are exempt from RCI obligations.

Deadlines and Penalties: Originally set for the 1st of April 2023, the submission deadline has been extended to the 1st of April 2024. From April 2024, failure to comply with the registration requirements may result in penalties, these include:

Fines: individuals who do not register their controlling interests within the specified timeframe may face fines imposed by the authorities. The amount varies dependant on the severity of non-compliance, with the maximum being £5,000.

Prosecution: Persistent non-compliance or deliberate avoidance of registration requirements may lead to criminal prosecution. Legal proceedings can result in convictions and penalties.

Disqualification: Disqualification from certain land-related activities or roles is possible where individuals repeatedly fail to comply with the RCI regulations.

It is worth noting that compliance with the RCI to date has been relatively limited, although that is anticipated to change as April 2024 fast approaches. Quite who or how the RCI will be policed in practice remains to be seen.

Now What? If you fall under the RCI's scope and are not exempt, registration is mandatory by April 1, 2024. Additionally, any owner or long-term tenant acquiring a controlled interest must update the RCI within 60 days. Similarly, any changes to existing entries must be reported within the same timeframe.

Conclusion: The purpose of the RCI is to allow greater transparency in Scotland’s land ownership. By identifying decision-makers and their controlling interests, it is designed to empower individuals seeking information about land and property.