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Analysing the Levelling-up and Regeneration Act 2023: new register of land contracts

Posted on 22 November 2023

This article was last edited on 12 February 2024.

Part 11 of the Levelling-up and Regeneration Act 2023 gives the UK Government power to require disclosure on a new public register of certain information related to land ownership and control. 

To be caught by Part 11, information must fall within one of three "permitted purposes":

  1. contractual control,
  2. beneficial ownership or
  3. national security. 

Of these, it is the proposed "contractual control" register which will be of most interest to the property industry.   This is part of the Government's attempt to increase transparency around the control of land secured for development purposes.

Registration of "Contractual Control" agreements

It will become compulsory to register any agreement which secures land for development in England or Wales.  The types of agreements caught include option agreements, pre-emption agreements, conditional contracts and promotion agreements.

The agreement must relate to registered land and the contractual right will (i) need to subsist for 12 months or more (or include a right for the grantee to extend the right beyond this period) and (ii) be held for the benefit of a business, charity or the exercise of functions of a public nature.

Rights held by an individual will not be caught.  Agreements made for the purposes of national security or to facilitate finance and loan agreements are also not in scope.

Timeline

It is proposed that when in force the regulations will apply to:

  • Agreements entered into after 6 April 2026, which is the proposed commencement date;
  • Existing agreements entered into after 6 April 2021; and
  • Existing agreements entered into at any time, which are varied in a way that alters any of the required information or which are assigned after the commencement date.

There will be a transitional period of one year starting from 6 April 2026, during which holders of existing relevant contractual rights must disclose information including details of the contracting parties, key terms of the agreement and details of the parties' advisers.  The backdated requirement to register agreements between 2021 and 2026 may be seen as particularly onerous.

We already have the Trust Registration Service and the Register of Overseas Entities and appetite for another requirement to supply information to the Government is low among lawyers and clients alike.  Regardless, both will need to delve into memories (and document management systems) sooner rather than later in order to register agreements going back to April 2021.  

Reporting requirements and data access

A qualified solicitor must send the required information to the Land Registry on behalf of the contracting parties within 60 days of the date of a contractual control agreement.  Where a party wishes to protect an agreement at the Land Registry in the traditional way, they must first provide the required information for the new contractual control register.  Therefore two duplicate layers of registration will be required.

The Land Registry plans to publish the data in a downloadable format and for it to be publicly and freely available.  The Land Registry does not plan to collect or publish the underlying original agreement.

Impact

Investors and developers already have to register most of these types of agreement at the Land Registry, if they want them to be binding on the land.  However, (a) existing registration is voluntary (though still recommended) and (b) the amount of information currently disclosed is less than it would be under the new register.  

The stated purpose of the data being readily available is to enable local authorities and communities to understand the likely path of development in their area. However, local land agents, with their expertise and knowledge, already perform this task effectively. We will wait to see if concerned parties feel better informed once they have access to data sets.

The other permitted purposes under Part 11

Part 11 of the Act also gives the Government power to set up two further new registers:

The "Beneficial Ownership" Purpose

Information will be within this purpose if the Secretary of State deems it useful for identifying beneficial owners of land and understanding the relationship between them and the land they beneficially own.

For overseas entities this may be particularly burdensome as it will duplicate the requirement to file information on the Overseas Entities Register.  If an entity also comes within the remit of the Trust Registration Service, then disclosure may be required under three separate regimes.

The "National Security" Purpose

Information can fall within this purpose if the Secretary of State considers that a threat to national security arises in connection with the location of the land or anything situated or done on it; and the information would be useful to identify persons who own, control or have interests or rights in the land.  

Consequences of failing to comply

Failure to provide the required information under any of the permitted purposes without a reasonable excuse, or knowingly or recklessly providing false or misleading information, will be a criminal offence punishable by imprisonment or a fine.  In addition, a contracting party who has not complied with Part 11 may be prevented from protecting their rights at the Land Registry.

There is a Government consultation on the details of the proposed contractual control register, with responses due by 20th March 2024.

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