UK government seeks to increase transparency on land control

The government recently published a consultation on public provision of information relating to the contractual control of land in England and Wales, as provided for by section 11 of the Levelling Up and Regeneration Act.

The provisions require a party, who is not the owner, with a contractual controlling interest in a piece of land to provide information about any arrangements to the Land Registry. Jonathan Brocklehurst, commercial property, and development expert of Pinsent Masons said: “This will clearly affect developers who use such agreements when assembling complex sites, which may include land from a number of unrelated land owners, allowing them to spend the considerable amounts of money needed to obtain planning permission confident that they can call for the land if they are successful”.

The contractual control agreements covered by the consultation are options, conditional contracts, pre-exemption agreements and promotion agreements. Restrictive covenants – restrictions on the use of land to preserve the value and enjoyment of adjoining land - and overage and clawback agreements - entitling the seller of land to extra payment from the buyer if certain conditions are met in the future – are not deemed to be contractual control agreements by the paper.

Information required by the Land Registry includes the full name of each party to the agreement, the type of contractual agreement, as well as the title number(s) of the land affected, according to the consultation. The Land Registry will collate the information into a database and publish at regular intervals.

According to the consultation, contractual control agreements that should be disclosed are those which are in writing and intended to facilitate future development of an estate in land. The agreement must be held for purposes of an undertaking. This is defined in LURA as a business, a charity or similar endeavour, and the exercise of functions in a public nature. Additionally, the agreement must not be related to an issue of national security. Currently, the required information will need to be provided within 60 days of the agreement being made, but the consultation includes a question about whether 60 days is the right period with suggestions from one week to six months.

Lucy Edwards, property law expert at Pinsent Masons, said: “Being on the database does not give the agreement any protection. A notice to protect priority and a restriction to ensure any positive obligations bind the grantor’s successors will be needed.” The Land Registry may refuse to register a notice or restriction that appears to relate to a contractual control agreement until the required information has been provided. In addition, it is a criminal offence to fail to provide the required information or to knowingly or provide information which is false or misleading. 

Although driven by a desire for increased transparency in the house building sector, the consultation will impact other sectors. For example, Jonathan Brocklehurst of Pinsent Masons said: “What is less clear is whether the regime is intended to cover options to take cable easements. The definition seems wide enough to cover infrastructure projects although this is not mentioned either way in the consultation.”

The new regime specifically excludes contractual control agreements which are for less than 12 months unless the grantee has a contractual right to renew.