Conveyancing, Transparency, and the New Registers

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Speakers

Alan Barr, partner Brodies LLP and an Honorary Fellow of the Law School at the University of Edinburgh and Kenneth Reid, Professor Emeritus of Scots Law at the University of Edinburgh.

Joined for the Q&A session by George Gretton, Lord President Reid Professor of Law Emeritus, at the University of Edinburgh.

Are you RCI-fluent? Are you on familiar terms with the ROE?

Since the Register of Persons Holding a Controlled Interest in Land (RCI) opened its electronic doors, on 1 April of this year, conveyancers have had to engage with the RCI Regulations and advise clients whether registration is or is not needed in particular cases. In the process a number of difficult and perplexing issues have come to light. For now, getting things wrong does not matter too much because there is no sanction for failure to register. But that will soon change. From 1 April 2023 a failure to register when registration is needed will attract a fine of up to £5,000. This applies, not just in respect of new acquisitions of land, but also to land already owned regardless of when it was acquired – and in a perhaps surprising number of common situations.

Meanwhile it turns out that new registers, like buses, come in pairs. And so on 1 August the RCI was joined by a second transparency register, the Register of Overseas Entities (ROE). The relevant legislation, the Economic Crime Transparency and Enforcement) Act 2022, was rushed into and through Parliament, following the Russian invasion of Ukraine in February, and then rushed into force. The legislation, complex in itself, is supported by two intricate statutory instruments promulgated over the summer. A lengthy and important new schedule – schedule 1A – is inserted into the Land Registration etc (Scotland) Act 2012. 

The basic idea is that overseas entities (essentially non-UK bodies corporate) owning land in Scotland or leasing it under a registered lease must register in the ROE. Registration involves the disclosure of anyone holding significant interest in or control over the entity (such as holding 25% of the shares or voting rights). The rules apply not only prospectively but also retrospectively to land acquired on or after 8 December 2014, with ROE registration to take place by not later than 31 January 2023. Penalties for non-compliance are draconian with a fine or a prison sentence of up to 2 years.

But the ROE does not just affect those solicitors who act for overseas companies. It also has a significant impact on day-to-day conveyancing. From 5 September 2022 onwards the Keeper must usually refuse to register dispositions, leases, and assignations of leases granted in favour of overseas entities unless the entity is registered in the ROE. And from 1 February 2023 the Keeper must refuse to register deeds granted by unregistered overseas entities. New questions have been added to the application form for registration, and a new clause or clauses will be needed in missives. 

The seminar will be given by Alan Barr and Kenneth Reid and they will be joined by George Gretton for the Q&A. In respect of the RCI the seminar will present a brief overview before focusing on some of the issues that are causing difficulty in practice. For the ROE a summary of the new regime will be followed by a close look at the implications for ordinary conveyancing practice.

Learning Outcomes and Objectives

The learning outcomes and objectives are that by the end of the seminar delegates will have (i) a sound knowledge and understanding of this new legislation; (ii) an appreciation of how this could or should influence their practice; and (iii) an indispensable set of source materials for easy reference following the seminar.