Delivering improved transparency in land ownership in Scotland: consultation analysis

Executive Summary

Introduction

i. This report presents an analysis of responses to the Scottish Government's public consultation entitled Delivering Improved Transparency of Land Ownership in Scotland: Consultation on Draft Regulations. The Land Reform (Scotland) Act 2016 is a key part of the Scottish Government's commitment to achieving transparency. Part 3, Section 39 of The Act, states that a new Register will be introduced to identify and make information accessible about those who own and control land in Scotland.

ii. Earlier this year the Scottish Government developed draft regulations for the proposed Register and put these out to consultation. The consultation achieved nineteen responses from eighteen organisations and one individual. Participating organisations varied in nature and included: ten membership organisations representing a range of stakeholders, six law firms; a Non-Departmental Public Body; and the Scottish Charity Regulator (OSCR).

iii. This executive summary presents themes within consultation responses; individual views are set out in the main body of the report.

The Functioning of the Register

The form of the Register

iv. The Scottish Government asked for comments on the proposals for the form of the Register. Many participants shared their overall views on the new Register in their response to this question. Three described their satisfaction with the level of detail proposed; another suggested it amounted to an infringement of the right to privacy. Four participants suggested more detail about associates would assist anyone searching the Register to identify records that refer to the same individual.

v. Three participants called for more detail within the Register about the status of information about associates. Two suggested it was unclear if historical searches of the Register would be possible; three participants reflected on ways to search the new Register.

vi. One participant expressed concern about the widespread nature of the changes. Conversely, another three participants highlighted as positive that the new Register covers all types of legal entities and non-natural persons; that it will apply to land owners and long-term leaseholders and cover all land in Scotland.

vii. Aspects of the draft proposals that would benefit from further clarification were identified by participants. Two highlighted that, given the sanctions associated with non-compliance, precise language is of paramount importance. There were comments about the details provided in relation to exclusions. Two participants suggested that the decision to exclude entities from the Register which are already subject to other transparency regimes would make it difficult for the general public to identify who controls Scotland's land. Two participants suggested the list of exclusions might be extensive. Potential confusion was also identified in relation to the terms 'control' and 'significant influence'.

viii. The most common point made in relation to the role of the Keeper concerned the need for sufficient resources to be provided to the Registers of Scotland to accommodate the new activity associated with the regulations. Three participants referenced Scotland Land Information Service (ScotLIS) in their responses, asking whether the intention was for the RCI to be accessed in the same way; one of these explicitly suggested that it should be accessed in the same way. Two highlighted that access to the Register is described in the draft regulations as 'at the discretion of the Keeper' and called for more clarification about this.

ix. Four participants identified a need for specific timescales for any entries or amendments to the Register by the Keeper. Three participants emphasised the importance of robust security measures to protect the information held in the new Register. Two participants called for strengthening the regulations in relation to establishing a process of systematic checks to support data validation and verification. Four participants suggested that the Regulations should provide that anyone who suffers loss or damage as a result of a security breach must be compensated.

Duties to provide information

x. Participants' views about information to be provided in the Register were mixed. Just under half of those who responded to this question expressed agreement that the information is sufficient. Six participants voiced concern about the level of data gathered and a variety of views were evident concerning duties to provide information. Three agreed with the proposed duties. Three expressed concerns there will be inadvertent breaches and noted this will require significant efforts to raise awareness and understanding among the public. Other responses included calls for greater simplicity in guidance and forms; two participants suggested that the duties are onerous.

xi. Responses to the proposed process for security declarations were mixed. Roughly half expressed agreement with the proposed duties, some called for small amendments. Three participants commented on the role and experience of the Keeper in relation to security declarations, calling for comprehensive training and guidance to be given to those involved in any decision-making. Two participants made detailed comments on the process for making a security declaration. They made suggestions about the form, guidance and appeals. A small number expressed concern about the level of disclosure required.

xii. Opinions varied among those who responded to the question on any barriers to applying for information not to be disclosed. Half indicated they were satisfied that the current proposals did not exclude any people who may wish to apply for their information not to be disclosed; however, one of these suggested the Scottish Government undertake some specific consultation with those who may wish for their information not to be disclosed.

Miscellaneous aspects of the Register

xiii. A range of responses were received about the proposals for referral of questions about the accuracy of the Register. Two participants said they did not wish for the range of people who could apply for exemptions to disclosure to be expanded, one suggested that the complexity of verifying the accuracy of the Register would have resource implications for the Lands Tribunal. One questioned the expertise of the Lands Tribunal to address questions on the accuracy of the Controlled Interests; in contrast, another participant suggested that the proposal was reasonable.

xiv. Many of those who responded to the proposals for criminal offences expressed some form of concern. These views varied and included references to disproportionate measures, calls for greater preparation time and a grace period and responsibility or, conversely that more enforcement and stronger deterrent is needed. Two participants noted that such an enforcement mechanism is already proposed by the UK's new Draft Registration of Overseas Entities Bill.

xv. Responses to the proposed process for notification of the Keeper in the case of a person's death or an entity's winding up or dissolution typically focused on the complexity of these measures.

xvi. Many of those who responded to the proposals for a transitional implementation argued that the transitional period of six months is too short. Others referenced the proposed transitional period under the UK Registration of Overseas Entities Bill as 18 months and saw this as a more realistic timescale. Two participants reiterated the importance for owners and tenants in land, and their associates, to be made aware of the Regulations in order to meet the requirements. Four participants indicated they found the proposals reasonable.

Who will be Registered

xvii. Questions twelve to fourteen covered contractual or other arrangements with an individual. All of those who provided a response suggested that the current description in the explanatory documents is too vague. They provided a range of examples to highlight different aspects of contractual arrangements that they wish the Scottish Government to consider.

xviii. Questions fifteen and sixteen concerned land that is owned or leased by partnerships. Two participants agreed the proposals do sufficiently reflect how land is owned and leased in Scotland. Two gave qualified agreement. Three participants described a range of issues in relation to control within partnerships. Two participants indicated they agree that the proposals sufficiently reflect how control is exercised.

xix. Questions seventeen and eighteen concerned land that is held in trust. In these responses six participants expressed agreement that the proposals reflect how land is typically held in trust. Four participants described complexities about ways in which land is held in trust. Two highlighted potential adverse impacts for trusts resulting from the new regulations. Two participants answered 'yes' indicating agreement that the proposals sufficiently capture how control is exercised over trusts. Two participants voiced concern that disclosure of associates in relation to trusts could hold information about a corporate vehicle rather than a person.

xx. Questions nineteen to twenty-one cover land that is owned or leased by unincorporated associations. In these responses two participants indicated agreement that the proposals reflect how land is owned and leased on behalf of unincorporated associations. Two participants indicated that they were supportive of the regulations as they were sufficiently broad. Two participants expressed concern that members of unincorporated bodies may not be aware of their duty to comply with the regulations.

xxi. Questions twenty-two to twenty-four concerned land that is owned or leased by Overseas Legal Entities. In their comments three participants called for Part 5 of Schedule 1 to be deleted. They suggested that due to the publication of the Overseas Entities Bill by the UK government would create dual reporting requirements for overseas entities. Two participants explicitly agreed that the proposals reflect how land is typically owned or leased by overseas entities.

xxii. Two participants noted that they were not aware of any mechanisms through which control is exercised which would fall out of the scope of these regulations but requested the implementation of the regulations to be monitored. Three participants gave concise replies to suggest that they were satisfied that the relevant scenarios have been identified.

Schedule 2

xxiii. Two participants highlighted the relevance of the PSC regime in terms of a model that the new Register could learn from and the current degree of effectiveness of the PSC regime in revealing control of corporate entities owning land in Scotland.

xxiv. Most participants agreed with the proposals not to require SCIOs, CIOs, mutuals or public authorities to provide information for inclusion in the Register.

xxv. Four participants expressed agreement with the conclusions in the impact assessments. In reflecting on additional impacts that have not been considered five participants agreed that there were no other potential impacts to identify.

xxvi. A common theme in responses to the question on measures to inform and publicise information about land in Scotland were calls for a high-profile approach to advertising the new Regulations. Four participants suggested that the Scottish Government should consider using the model of the ScotLIS system, on the basis of its reliability. Three participants took the opportunity to reiterate concerns they had about the accessibility of a new Register for members of the general public.