The Long Leases (Scotland) Act received Royal Assent on 7 August 2012. The Act will on the “Appointed Day” (the first Martinmas (28th November) falling 2 years after the relevant sections of the Act come into force) convert the tenant’s interest in long leases into outright ownership and extinguish the existing rights of land owners in exchange for payment of compensation.

Leases which are affected by this Act are those:

1. whose original duration or term was for more than 175 years;
2. which still have more than 100 years left to run where the subjects comprise wholly or mainly a private dwellinghouse, or more than 175 years left to run in any other case; and
3. which have an annual rent of £100 or less.

The Act will not apply to leases:

1. which are only of minerals;
2. which are granted for the sole purpose of allowing the tenant to install and maintain pipes or cables; or
3. of a harbour in respect of which there is a harbour authority.

Only the tenant has the ability under the Act to opt out of conversion. They also have the ability to cancel their opting out, but for any of these to be effective, the tenant’s notice must be signed and registered at lease 2 months before the Appointed Day.

The Landlord will be entitled to claim payment of compensation from the tenant in accordance with the formula set out in the Act for the loss of his ownership right. In each case, the Landlord will be entitled to claim for loss of rental income, which also takes into account any premiums which may have been payable for a lease renewal or extension. In some cases the Landlord will also be able to claim for compensation for (i) loss of right to get the property back if there was more than 200 years of the term left to run after the Appointed Day, and (ii) loss of right to enforce non-monetary obligations.

Upon conversion of the lease, any standard securities over the tenant’s interest in the lease will remain in place, however standard securities over the landlord’s title will be extinguished.

For further information please contact Caren McNeil on 01224 581581 or by email at This email address is being protected from spambots. You need JavaScript enabled to view it.