The Long Leases (Scotland) Act 2012 received Royal Assent on 7 August 2012 and will bring an end ultra-long leases (those for more than 175 years) by converting them into ownership.

The intention is that on the Appointed Day (understood to be 28th November 2015) all eligible leases will be converted into ownership on that day unless the tenant opts out.

An eligible ultra-long lease is one that was: 

• Let for more than 175 years and, at the Appointed Day has more than 175 years left to run (for non-residential leases) or has more than 100 years left to run (for residential leases); and
• The annual rent does not exceed £100.

The Act will on the Appointed Day 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.

The Act will not apply to leases which are: 

• Of a harbour for which there is a harbour authority;
• Only of minerals; or
• For the sole purpose of allowing the tenant to install and maintain pipes or cables.

Upon conversion of the lease, any fixed security over the tenant's interest in the lease will remain in place. Any security over the landlord's title will be extinguished.

The landlord will be entitled to claim payment of compensation from the tenant in accordance with a set formula. This will include a claim for loss of rental.

If you would like to know more about the end of the long lease and the potential compensation please contact our experienced property team.