Details on land control agreements to be made freely available
© Tim Scrivener The government is planning to collect more detail about contractual agreements relating to land in England and Wales and to make it freely available.
This will include, among others, contracts for option and promotion agreements, also rights of pre-emption, which give a party first refusal if the land in question is to be sold.
The rationale for this is to provide greater transparency and a reliable and accessible source of information for communities, developers, and other stakeholders, says the Department for Levelling Up, Housing and Communities (DLUHC).
How much land is covered by such agreements, in which locations, and for how long will be required information, allowing developers to more easily identify land that is available, says the department.
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It expects the measures to encourage more land to be brought forward by providing greater transparency on which land is currently the subject of such agreements.
It also says that the move will help landowners see what contractual control agreements have been agreed over other land in their area.
Some of this information is available through the payment of a fee to the Land Registry, but the move will increase the amount of detail collected and make it freely accessible, raising concerns about privacy and competition, among other issues.
While the focus of this policy move is on land for development, there may be unforeseen consequences relating to agreements governing the transfer of land within or outside a family, and also for landlord-tenant relationships.
The measures are part of the Levelling Up and Regeneration Act which became law in October last year and the regulations on providing the additional land agreement information are expected to take effect from April 2026.
The process will come under the auspices of the Land Registry, where there is already an obligation to register certain interests against the title to land.
However, it is proposed to also include the names of the contracting parties, the start and end dates of the agreement, whether the agreement is extendable, and the extent of the land covered.
The consultation states that the government believes the data it suggests collecting “strikes the right balance between gathering enough information to improve transparency around who controls land, short of outright ownership, where, and for how long, without the requirement to provide overly commercially sensitive information or information that is not useful or relevant”.
60-day deadline
The information required will have to be provided to HM Land Registry within 60 days of a contractual control agreement being entered into and must be provided by a conveyancer to ensure accuracy.
For existing agreements made since 6 April 2021 there will be a year from 6 April 2026 in which to provide the information.
The government plans to publish the data, in bulk, in a downloadable format, with options in future to access the data in different ways such as searching by individual title.
Compliance and costs
If the required information on contractual control agreements is not provided, the Land Registry will refuse to register a notice or restriction against the relevant title.
It will be a criminal offence to fail to provide the information, or to have knowingly or recklessly provided information that is false or misleading. The sanctions include fines or imprisonment.
The DLUHC estimates an initial one-off familiarisation process will cost £4.8m, with £4.5m of this falling to the private sector, mainly developers, and the remainder to local planning authorities.
Unintended consequences
The government says it has considered potential unintended consequences and will monitor for these.
One is the possible effect on land values, with some commentators saying that the information may have either a positive or negative impact on land values by increasing competition or decreasing the desirability of certain land.
A second is potential pressure on landowners, from communities being able to see that they are entering into agreements related to land in their area and this possibly making landowners hesitant about bringing parcels forward for development.
While greater transparency over the control of land is expected to stimulate earlier engagement between developers and communities, there is a risk that there will be more time to prepare objections during the planning process, potentially slowing some development, says the DLUHC.
The possibility of other types of agreement being devised, to avoid providing information on contractual controls, has also been raised.
Reaction from land advisers
Peter Moore, a partner with land agent Bletsoe’s, advises landowners on land use and development.
Aside from the proposed requirements adding extra cost, he does not see the measures having a big impact overall.
However, he says certain scenarios could make things awkward; for example, where there have been inter-family agreements or arrangements about what is to happen to land, and which the consultation proposes will now have to be declared.
There are also likely to be implications in some landlord and tenant scenarios.
“Landlords should in any case be talking to tenants before entering into any development proposals, so that vacant possession can be achieved,” says Peter.
“Once a promoter has an agreement, as a landowner you would want them to be out there and being proactive in pushing your land, so it would become common knowledge soon enough, but it’s best to lay the ground with tenants first.
“The proposals also highlight the need for good communication within farming families so that people know what is planned for the land.”
CLA senior legal adviser Roger Tetlow says that while some of the information is already available through the Land Registry, you have to know what you’re looking for.
However, he is not convinced the move will achieve the transparency the government says it is aiming for.
It could, he suggests, help a tenant become aware of a landlord’s development intention which may in turn put the tenant off improving a holding.
He also thought it was draconian to impose criminal penalties on those who fail to comply.
At the Leaders Romans Group, Ian Barnett runs the firm’s land department and advises landowners on development.
He is also not convinced that the proposals offer advantages and says that there could be several unintended consequences and that it will make managing the message about development more challenging.
“Competition and market forces mean that developers won’t want this information out there,” he says.
“It could fuel unhelpful public speculation and it’s going to take quite a lot of work and cost, especially the retrospective aspect.”
While the move is labelled a consultation, the provisions for it are already contained in the Levelling Up and Regeneration Act.
Consultation and how to respond
The consultation is being run by the Department for Levelling Up, Housing and Communities (DLUHC).
It opened on 24 January 2024 and closes on 20 March 2024.
Online responses can be made through a survey.
Anyone unable to respond online can request a printed version from the address below. This is also the address for the return of postal responses:
Consultation on contractual controls, FAO Melanie Montanari/Emma Fraser, Department for Levelling Up, Housing and Communities, Housing Markets and Strategy Directorate, 3rd Floor, Fry Building, 2 Marsham Street, London, SW1P 4DF
Enquiries about the consultation can be sent to CCAconsultation@levellingup.gov.uk
What type of land agreements are affected?
Contractual control agreements to secure land or property for residential, commercial or mixed-use development will be affected.
Examples include:
- Option agreements – these grant the beneficiary (usually a developer) the right, but not the obligation, to buy a parcel of land within a specified period. There is usually a lump sum payment to the landowner for this option, which if not exercised simply lapses.
- Pre-emption agreements – these entitle a potential buyer to a right of first refusal if, or when, the owner decides to sell the land.
- Conditional contracts which bind a party, such as a developer, to purchase land from the landowner once certain conditions have been met.
- Promotion agreements – these allow a developer or specialist land promoter to put the land through the planning process for development. The promoter is paid a fee for this, usually a percentage of the net sale proceeds once promotion and planning costs are deducted.
The proposed changes will:
- Apply to agreements made since April 2021 and to certain variations to existing agreements
- Cover registered land only
- Apply only to agreements of 12 months or longer.
What is not included
It is not proposed that restrictive covenants are within the scope of the new requirements.
Overage and clawback agreements are also excluded, as are agreements made to facilitate finance arrangements.