This guidance covers the Long Leases (Scotland) Act 2012 , the provisions of which converted certain ultra-long leases into ownership on 28 November 2015.
Generally, qualifying leases must have:
- been registered in the land register or sasine register
- had an initial term of more than 175 years
- had more than 100 years to run on 28 November 2015 if the property is primarily a residential dwelling house, or 175 years in other cases
- had an annual rent of less than £100
Leases with an initial term of less than 100 years qualified if they included a condition requiring the landlord to renew the lease.
Where conversion has occurred, this guidance contains information on how to make a request to for the land register to be updated and, among other things, contains guidance on applications for registration relating to a converted lease.
View the full terms of the Long Leases Act
Updating the land register
Where conversion has occurred for a lease with a lease title sheet, that title sheet will be rendered inaccurate in disclosing that the right is that of a tenant and not an owner and it may also be inaccurate in disclosing certain lease conditions as subsisting. Similarly, a plot title sheet affected by a converted lease will be rendered inaccurate as the land is no longer owned by the registered proprietor.
A request for the land register to be updated to give effect to conversion can be made either:
- by submitting a request for rectification; or
- by certifying that conversion has occurred in an application for registration of a deed, for example in the Additional Information field on the application form.
The request or application should also make clear which leasehold conditions disclosed in the lease title sheet have been rendered extinct, though the Keeper would seek to give effect to the extinction of the obligation to pay rent when updating a lease title sheet. Where an update is made to the lease title sheet to show that it is now a plot title sheet and the right of the former owner was registered, a corresponding amendment will be made to the former owner's plot title sheet or it will be closed if necessary.
There is no fee for rectification. By virtue of section 85(1) of the 2012 Act, no entitlement to compensation arises on rectification of such inaccuracies since they arise otherwise than as a result of an entry or change in an entry in the Land Register made by the keeper.
Applications for registration relating to a converted lease
Applications for first registration
After conversion has occurred, the ownership right of a former tenant necessarily will be transmitted by disposition.
The provisions of the Long Leases Act also operate to convert certain qualifying conditions set out in the lease, or other deeds pertaining to the lease, into real burdens such as facility and service burdens. Certain lease conditions which affected or benefited the tenant's right prior to conversion will also become servitudes burdening or benefiting the land. Further, notices or agreements may have been recorded to convert certain leasehold conditions into real burdens or reservations of sporting rights in the lease into separate tenements.
Heritable securities and proper liferents that affected the land prior to conversion will be extinguished on the appointed day. However, other encumbrances affecting the land such as existing real burdens or servitudes, or those which affected the lease (for example a heritable security over the lease or a non-qualifying long sub-lease) are unaffected.
The applicant will need to consider how the conversion affects the particular lease and then provide the Keeper with details of any encumbrances and rights that require to be entered in the title sheet, as part of their application for registration of a disposition or application for voluntary registration. Where a servitude right or encumbrance requires to be delineated on the cadastral map, the application must include a plan or sufficient description of the extent.
Applications affecting a lease title sheet
After conversion has occurred, the ownership right of a former tenant necessarily will be transmitted by disposition. Where parties submit an application for registration of a deed after the appointed day without the lease title sheet having previously been rectified, their application for registration affecting that title sheet should confirm that the right of the tenant has converted to ownership. A disposition or other deed affecting the converted lease submitted for registration after the appointed day can properly refer to the title number of the lease title sheet. The application should also specify which, if any, of the leasehold conditions disclosed on the lease title sheet the applicant considers were extinguished on conversion. In general, the Keeper's staff will not proactively consider whether a particular lease has converted when processing an application which otherwise meets the conditions of registration.
Deemed registered leases
There may be rare cases where the right of the landlord in a qualifying lease is registered, but the right of the tenant which will convert was constituted by recording in the General Register of Sasines. The general guidance on Leases and Automatic Plot Registration explains that the lease is 'deemed registered' in this situation and that deeds affecting the lease are now registrable in the Land Register. As a consequence, if rectification of the Land Register has not been sought and obtained prior to the former tenant seeking to transfer ownership or otherwise transact with the land, an application for registration of a deed affecting the converted lease should be submitted as a deed affecting the whole or part of the registered plot. The deed should contain reference to the plot title number in order to meet the appropriate condition of registration. The application should make clear that conversion of the tenant's right into ownership has occurred.
Assignation of qualifying lease delivered prior to the appointed day - application submitted after
Where the tenant in a qualifying lease does not have a completed title their right can convert into ownership under the Long Leases Act. Consequently, where settlement of a transaction involving an assignation of a lease which will convert into ownership takes place prior to the appointed day, the application for registration of the assignation can be submitted after the appointed day. Where neither the lease nor the plot is registered, then the application type is automatic plot registration. The application must confirm that the lease has converted if the Keeper is to take account of conversion in the registration process.
General Register of Sasines
As with the Land Register, no exercise will be undertaken by Registers of Scotland to assess whether a particular lease converted. Consequently, search sheets in the Register of Sasines will not disclose conversion has occurred.
The former tenant can seek voluntary registration of the plot owned by them following conversion, if so desired.
In the rare cases where a converted lease was deemed registered because the plot (the former landlord's title) was registered prior to conversion, the former tenant can seek rectification to ensure the Land Register discloses that the former tenant is now the owner.