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Many readers will be aware of the Government’s commitment to improving transparency about who owns and controls land in England & Wales. The Government believes that a lack of transparency could inhibit competition by encouraging land-banking and lead to local communities lacking visibility on who stands to benefit from land in their area being developed.
A Register of Overseas Entities was introduced in 2023 requiring overseas entities who own or lease land or property in the UK to register with Companies House and disclose information concerning their beneficial ownership and managing officers. Strict penalties are imposed for those in breach.
The next stage of the drive for transparency is the introduction of a public register of contractual controls over land in England & Wales, which will affect all those with the benefit of contracts for the purchase or promotion of development land. The scope of the proposal is not limited to large scale development and will apply to all contracts relating to land regardless of size and value.
The consultation on the proposal expires on 20 March 2024. Access to the consultation can be found here, and the draft regulations can be found here.
The results of the consultation are expected to be published later in 2024 with the provisions brought into force within the next 12 months.
The impact of the draft regulations can be summarised as follows:
Parties with the benefit of a contractual control over land must register details of that contract within 60 days of the date of the contract, any assignment and/or any variation of that contract.
The draft regulations indicate that the requirements will also apply retrospectively to all contracts entered after 1 April 2021.
The regulations require details of any of the following contracts “which are intended to facilitate the future development” of land to be registered:
The regulations do not apply to unconditional contracts or contracts which are due to expire (without ability to extend) within 12 months of the contract being created.
The regulations require the following details to be registered in respect of each qualifying contract:
The regulations exclude contracts made for the purposes of national security or defence, and agreements made to facilitate and finance agreements will be exempt from the disclosure requirements. The meaning of “agreements made to facilitate and finance agreements” has not yet been published.
The draft regulations provide that the Land Registry will not permit registration of the Buyer’s usual protective entry against the title to the target land until the required contractual information is supplied.
The consultation also indicates that failing to provide the required information or knowingly or recklessly providing information that is false or misleading will amount to a criminal offence. Sanctions will include fines or imprisonment.
The regulations envisage that the required information will be supplied by conveyancers via the Land Registry’s existing online portal. There is no indication that an additional registration fee may will be imposed.
The regulations envisage the Land Registry keeping a central database of the disclosed, which will be publicly available. We anticipate that the nature of the access is likely to mean that property tech companies will principally access and disseminate the information via new or existing (paid for) platforms, although there may be scope for the data to be made directly available in formats which might be more user-friendly to individuals.
Whilst the drive for transparency is to be encouraged, we are concerned that the regulations may also have the following unwelcome consequences:
The Government is requesting consultation responses from those with an interest in the sector.
We intend to supply further updates in due course.
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If you have any questions relating to this article or have any legal matters you would like to discuss, please contact the development and house building team.
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