A list of frequently asked questions about the Ownerless Property Transfer Scheme (OPTS)


A list of frequently asked questions about the Ownerless Property Transfer Scheme (OPTS)

A. The KLTR and the OPTS

  1. Who, or what, is the KLTR?

The KLTR is the King’s & Lord Treasurer’s Remembrancer. Information on the KLTR is available at About us | King's and Lord Treasurer's Remembrancer (KLTR.gov.uk). The KLTR is the Crown’s representative in Scotland with authority to deal with ownerless land and buildings. The KLTR is the same person as the Crown Agent, currently John Logue. He is supported by a small team of civil servants.

  1.  What is the OPTS?

The Ownerless Property Transfer Scheme (OPTS) was launched on 1 March 2024.  It is a new initiative from the KLTR designed to encourage collaborative working between public bodies, local authorities and community groups to acquire ownerless property, known as “bona vacantia”, where it is in the public interest.

The scheme will create opportunities for communities across Scotland to bring ownerless property back into productive use and to address the long-term negative impact that ownerless land and buildings can have on local residents.

The scheme is open to communities across Scotland and, once a property has been confirmed as ownerless, the OPTS team will work with public bodies, local authorities and community groups to transfer the property at nominal value where applications meet the OPTS criteria.

  1.  Why is the KLTR involved in transferring ownerless property?

The KLTR plays a pivotal role in bringing land and buildings back into productive use. The Scottish Land Commission made recommendations on dealing with Vacant and Derelict properties which have been declared ownerless/bona vacantiaThe report can be found here.

Para 5.3.3 of the SLC Recommendations also suggested that the “KLTR’s role, powers and functions should be reviewed to see how they might allow better alignment with wider regeneration and land reform objectives”.  This Scheme directly addresses this recommendation and the KLTR continues to consider other potential opportunities.

The KLTR encourages any collaborative working between public agencies and other bodies that delivers public benefits across Scotland, including community interests.

  1.   What powers allow the KLTR to deliver OPTS?

The KLTR has a statutory power under section 1012 of the Companies Act 2006 to deal with ownerless property and is supported by a small department with limited income streams.  Funds from these schemes will be reinvested into supporting OPTS where, previously, the KLTR’s surplus funds were passed to the Scottish Government as an annual contribution to the Scottish Consolidated Fund.

The KLTR will continue to pass any surplus funds to the Scottish Consolidated Fund.

  1. How can I find out more about OPTS?

Key Scheme documents, including the OPTS Summary and Guidance, can be viewed on the KLTR’s website at OPTS - Information for prospective applicants | KLTR

B. Ownerless property

  1. How does property become ownerless?

From the point of view of Scottish common law, property becomes ownerless in two main ways:

  • A company is dissolved (voluntarily dissolved by its directors, or struck off) whilst owning property. This property becomes “bona vacantia” and falls to the Crown.
  • A person dies without a will and without heirs. This is known as “ultimus haeres” (the Crown is the ultimate heir).
  1. Does the KLTR deal with moveable and immoveable property?

The KLTR may deal with moveable or immoveable (known as heritable) property. The OPTS is for heritable property only, that is, land and buildings.

  1.   What is “bona vacantia” property?

Bona vacantia is a Royal Prerogative right to deal with ownerless property, which may include exercising control or possession over the property. This commonly relates to property that is intestate, from a dissolved company or otherwise ownerless.

“Bona vacantia” is a right peculiar to the Crown and is a right to choose to claim “ownership” in the more normal sense. Until that happens, the Crown is not in possession of the property, or liable for it.

  1. Is ownerless property the personal property of the King?

No. Ownerless property can be dealt with by the Crown, not the current monarch. Neither His Majesty the King, nor any member of the Royal Family, derive any financial benefit from ownerless property in Scotland or have any executive involvement in the running of the KLTR department.

  1. How does the KLTR become aware of ownerless property?

There are a variety of ways in which this can happen. For example:

  • A local authority alerts the KLTR of property owned by a dissolved company;
  • An individual or body connected with the former company seeks to re-acquire property;
  • A bank notifies the KLTR of dissolved company funds in an account;
  • Another individual or body alerts the KLTR to ownerless property, e.g., a local community group.
  1. What can the KLTR do with ownerless property?

If the KLTR is satisfied that the property is ownerless, options include:

  • transferring property to another public body;
  • transferring property to local authorities;
  • transferring property direct to community bodies;
  • disclaiming the property; and
  • selling the property at auction.   

The KLTR is not, however, obliged to do anything at all when notified of potentially ownerless property and may choose not to act at all.             

  1. What does "disclaiming" mean?

Property referred to the Crown may disclaim under section 1013 of the Companies Act 2006. The effect of a disclaimer is to remove the Crown (KLTR) interest. A notice will appear in the Gazette and, in the case of dissolved companies, the original disclaimer notice will be sent to Companies House. Disclaiming Crown interest does not prevent any other party from acquiring the property.

Once disclaimed, property becomes truly ownerless and is the responsibility of the local authority.

  1.  Can the KLTR reclaim the property after disclaiming if new community benefits arise?

No. A disclaimer cannot be reversed. “Bona vacantia” is a right peculiar to the Crown and is a right to choose to claim “ownership” in the more normal sense. Until that happens, the Crown is not in possession of the property, or liable for it. Disclaiming property means that the Crown has decided to forfeit its right to claim ownership and there is no power to reverse that decision.

  1. Will OPTS cover properties that have been made bona vacantiaas someone has died with no will or heirs?

No. When property is left by someone with no will or heir, it is known as ultimus haeres. The KLTR will attempt to contact possible heirs over a longer period of time than the timescale for restoring a company and a relative could appear at any time. This increases the risk associated with these properties and, therefore, they are excluded from OPTS.

C        What are the aims of the OPTS?

  1.  Why is the KLTR introducing this scheme?

To create additional opportunities for ownerless land notified to the KLTR to be brought back into use for the benefit of local communities where it is in the public interest to do so.

This contributes to delivering the Scottish Government’s Land Reform Vacant and Derelict Land objectives and ensure that ownerless land is addressed timeously.

  1.  What is novel about the scheme?

OPTS fundamentally changes the way in which the KLTR engages with ownerless property. It creates new options for transferring ownerless assets for community benefit.  Previously, the KLTR could only sell at market value or disclaim.  From 1 March 2024, we will offer ownerless property at below market value where it will benefit the local community.

  1. What are the KLTR’s hopes for the OPTS?

The OPTS will provide opportunities for communities to achieve their aspirations and make sustainable improvements to life in their local areas. Community bodies, local authorities and public bodies will be able to maximise these opportunities by working collaboratively to agree the best use for ownerless properties and ensure maximum local benefit. 

D. Applying for OPTS property

  1.  How does OPTS work?

Section 2.2 of the OPTS Guidance provides an overview of the OPTS process.  A flowchart of the OPTS process is available at Annex A of the Guidance.

  1.  How can I find out what properties are available through OPTS?

A list of all available OPTS properties will be published on the KLTR’s website.  These will be listed by geographical (Local Authority) area. We are not able to send out a portfolio of properties to interested parties. If you might be interested in gaining property through the OPTS, you will need to keep an eye on our website.

  1. How many properties will become available?

As ownerless property can only be made available once it has been notified to the KLTR, it is difficult to predict how many properties will become available.  However, we normally receive around 150 referrals a year.

Not all properties received by the KLTR will be suitable for OPTS as some are too high risk, but most are expected to have the potential to be suitable for community benefit. 

  1. If I think property is ownerless, what is the first thing I should do if I want to use the OPTS scheme?

Firstly, check the OPTS Summary and Guidance on the KLTR’s website to see if OPTS is for you and your community. 

Secondly, check that the property is ownerless – see section 2 of the OPTS Guidance for information that’s required and how to obtain this. If you are unsure, seek advice from an independent legal adviser or contact the OPTS Casework Team.

  1.  How will a public body, local authority and community be notified of OPTS property?

Each OPTS property will be notified to public bodies, the relevant local authority and the community sector simultaneously, together with a copy of the valuation report undertaken by the KLTR. 

In supporting communities, the KLTR will work with Highlands & Islands Enterprise, the Development Trust Association Scotland and South of Scotland Enterprise to ensure communities are informed of OPTS properties promptly. 

  1. What is the public body trawl?

The term “public body” describes the range of public bodies which have a direct relationship with the Scottish Government or Scottish Parliament. The “trawl” is a mechanism used to distribute surplus property information to all public bodies in Scotland. Public bodies in Scotland: guide - gov.scot (www.gov.scot).

Trawl notices are issued by the Scottish Government’s Estates Team and public bodies have 1 month from the date of issue to inform the selling department of their interest in taking ownership of a property. The KLTR encourages public bodies who wish to take ownership of OPTS property to discuss their proposals with the local authority and any known community representatives.

  1. Can I apply if I am not a properly constituted Community Body?

Yes. A public body, a local authority or a member of the community who intends to create a community body may apply for OPTS property.  If you are a member of the community, the community must be properly constituted and approved by the KLTR before you receive the property.  Section 4.2 of the OPTS Guidance provides information on the types of community bodies able to apply.

An individual wishing to acquire ownerless property for their own benefit may notify the property to the KLTR and note their interest by contacting the OPTS Team but the property will be considered for OPTS purposes before any private interest.

  1. Can the KLTR give legal advice?

No. The KLTR cannot provide legal advice to any party involved in the OPTS process. It is recommended that those involved seek independent legal advice where required.

  1. What is a Legal Report?

A Legal Report provides detailed information relating to a property that appears in the Land Register or the Register of Sasines.  This includes ownership and other title details, such as title plans, conditions and restrictions on the property, any recorded advance notices, court inhibitions, insolvency issues and any data anomalies.

Registers of Scotland (RoS) no longer provides Legal Reports and information on private providers is available on the internet or through a solicitor.

  1. Are there any restrictions on use for the properties under this Scheme?

As with any community purchase, proposals for the property will expect to have the needs and aspirations of the local community at heart, taking into account sustainable development and the wider public interest. Recipients of OPTS property will be expected to continue to meet the aims of the Scheme for the duration of ownership.

Any proposed use for the property may require planning consent and it is for the applicant in each case to seek such consent. The KLTR does not seek planning consent before transferring property.

This Scheme is not intended to be used to prevent development or frustrate the planning system. Its purpose is to provide opportunities to bring land back into productive use. Any development issues should be addressed through the planning system, which already considers and determines local development in the public interest and in conjunction with the local development plan.

  1. What happens if there is more than one interested party?

Section 2.1 of the OPTS Guidance indicates that the KLTR will not engage in local debates and would expect any competing proposals to be resolved locally wherever possible,  The KLTR recognises that, at times, competing interests may not be easily resolved but applications supported by both the local authority and the community stand a better chance of success.  Where necessary, the OPTS Advisory Panel may be asked to assess which proposal is most beneficial to the community and in the public interest but the KLTR is not obliged to choose either if, in his view, the result would be to create division within the community.

  1. How will I find out if my application has been successful?

We will contact all interested parties direct when the KLTR’s decision letter issues and the decision will be published on our website.

  1. What happens if the property is not used as intended?

The KLTR is likely to place conditions of transfer on the property, including clawback provisions, that is, an agreed payment to the KLTR if the land is sold on for profit rather than being used as intended.  You should contact the OPTS Casework Team if you think any change of use will not meet the aims of the Scheme.

  1. How can I contact the OPTS Casework Team?

The OPTS Casework Team can be contacted by e-mailing opts@kltr.gov.uk.

E. OPTS transfer value and process

  1. Will the KLTR sell property for nominal value or market value?

The KLTR expects to transfer property for nominal value, which will be composed of the KLTR’s external costs, such as legal and valuation fees, etc., (but not administrative costs) plus £1. The Crown will not seek to profit from any disposal under the Scheme.

  1. What is “market value”?

Market value is defined as “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.  It is the amount the property would be expected to sell for if we sold it conventionally.

  1. What is “nominal value”?

Nominal value is normally achieved on a cost-recovery basis, with us recovering professional costs only, such as legal and valuation fees plus any additional expenses relating to environmental surveys, etc. (but not administrative costs).

  1. Why does the KLTR need to know market value when the property will be transferred for less?

The KLTR is required to pass information on OPTS transfers to the Scottish Government Finance Directorate and the market value will be used to determine the amount of reduction in price the recipient receives.  Where an asset is being disposed of at less than Market Value, a market valuation is required as part of the process for considering the wider public benefits alongside any financial implications. A market valuation will enable accurate accounting and reporting (SPFM para 21 of Disposal of Property guidance). Scottish Public Finance Manual - gov.scot (www.gov.scot) . This is required to ensure that the scheme is delivering good value for money for the Scottish people. 

The market value should be used when registering the property transfer in the Land Register as this will determine the registration fees to be paid to the Registers of Scotland (RoS).  The RoS website indicates “Where the deed being registered transfers the ownership of a property, or is evidential to the transfer, then the fee that is payable is based on the consideration narrated in the deed or the value of the property (whichever is greater)”. The fee is calculated using the rates at Registration fees - RoS Knowledge Base

  1.  What if the community is unable to raise the necessary funds or create a community body within the timescale?

Failure to conclude the transfer within the 8 months provided will result in the opportunity to purchase being removed, unless a “holding agent” or an extension to that period has been agreed during the OPTS process.  Any extension to the 8-month period will be in exceptional circumstances only and at the discretion of the KLTR.

If the OPTS purchase is not concluded, the KLTR may assist the applicant in identifying other ownership options, such as a vesting order, prescriptive claim or purchasing at auction.

F. Technical questions – company restoration and KLTR liabilities

  1. What happens to the property if a company is restored?

The KLTR will consider each case on its merits, including if the 6-year restoration time limit applies. No KLTR liability will fall to the body receiving the property.

As part of the OPTS process, where a company has been dissolved for less than 6 years, the KLTR will seek to establish the intentions of company officers before proceeding.

  1.  Will the KLTR still transfer property if restoration of a company is likely?

This depends on a number of factors and each case will be considered on its merits. You should inform the KLTR if you are aware of any attempt to restore a company that previously owned OPTS property you wish to purchase.

  1.  Will the KLTR take on any liabilities for properties before transferring?

No. As with any property transfer, liabilities will need to be considered in the wider interests and aspirations for the property. Some liabilities may not be too burdensome to prevent transfer: some will.  It is for the applicant to consider any liabilities as part of their due diligence prior to submitting an application.