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Publish date

2 April 2024

What will be the result of the Government consultation launched on disclosure requirements under Part 11 of the Levelling Up and Regeneration Act 2023?

The Levelling Up and Regeneration Act 2023 came into force on 26 October 2023 and introduced new powers under Part 11 to require disclosure of information about interests and dealings in land. For an overview please see our article here. This part of the Act was introduced with the aim of achieving greater transparency around ownership and control of land in England and Wales.

Regulations to govern the disclosure of the above mentioned information are expected to commence in April 2026 and will affect not only new agreements, but also have a retrospective effect on existing agreements entered into from April 2021 (and potentially earlier). Failure to comply will be a criminal offence. The majority of agreements typically used between developers and landowners will fall under the Act. The Government recently launched a consultation on the  scope and method of collecting this information. This consultation closed on 20 March 2024 and we await the results.  To see the questions involved in the Government consultation click here.

What agreements will be disclosable?

It is anticipated that the majority of agreements typically used by developers will be “Contractual Control Agreements” (CCAs) and will be disclosable, including:

  • Option agreements
  • Pre-emption agreements
  • Conditional contracts (which bind a party, such as a developer, to purchase land from the landowner once certain conditions have been met)
  • Promotion agreements.

This is provided that they are:

  1. In writing and bind an owner to transfer their land or grant a lease (of seven years or more) to non-individuals (i.e. companies, charities etc.) in some way with the intention to facilitate the future development of land; and
  2. Relate to registered land; and
  3. Subsist for 12 months or more of qualifying as a disclosable agreement under the Act or, if it does terminate within 12 months, includes a right to extend the agreement; and
  4. Is not excluded from the scope of the regulations (see below).

Excluded documents and controls

It is currently envisaged that the following will be excluded from scope of the regulations:

  • Agreements made for the purposes of national security or defence
  • Agreements made to facilitate finance and loan agreements
  • Restrictive covenants
  • Overage and clawback agreements.

Does it apply to existing agreements?

Yes – Some. The disclosure requirements will catch CCAs entered into after 6 April 2021 as well as new CCAs entered into after the commencement of the regulations (expected April 2026).

CCAs entered into prior to 6 April 2021 may also be caught if they are varied in such a way that alters any of the information required under the Act; or assigned after the date of commencement of the regulations.

What information will be required?

If a CCA is within the scope of the regulations, provision of the following details will be mandatory:

  1. The type of agreement
  2. The contracting parties, including company/overseas entity registration numbers where applicable
  3. The date the agreement was entered into and any fixed start dates where this differs
  4. The end date
  5. The territorial extent of the agreement
  6. The relevant HM Land Registry title numbers
  7. Solicitor Regulation Authority (SRA) number or similar of the professionals involved in preparing the agreement
  8. Details of any rights to extend the agreement.

Only the mandatory information will be published and publicly available, not the underlying original agreement.

How and when should the mandatory information be disclosed?

This will depend on when the CCA was entered into:

  • For any new CCAs, the grantee will need to provide the mandatory information within  60 days of the CCA being entered into. This applies regardless of whether the grantee is applying for a notice or restriction to protect their interests under the CCA, but restrictions or notices will not be registered at HM Land Registry until the mandatory information is provided
  • Existing CCAs will have the benefit of a 12 month transition period to provide the mandatory information starting from the commencement date (expected to be 6 April 2026).

The consultation envisages that mandatory information will be provided by a lawyer which implies that it will be a requirement for landowners and developers to instruct lawyers to act on their behalf in relation to any CCAs, increasing costs for parties.

Do I have to update the information?

Yes – Parties will be under a continuing obligation to update HM Land Registry within 60 days of any changes to a relevant CCA. This means that CCAs will need to be kept under constant review so that any new disclosures are made promptly which will increase the burden on developers, landowners and their conveyancers.

What happens if I don’t comply?

If the mandatory information regarding CCAs is not provided, HM Land Registry may refuse to register a notice or restriction against the relevant title.

It is also an offence to fail to comply with a requirement to provide information, or to provide false or misleading information. Both offences are punishable by a fine or imprisonment, or both. In cases of legal entities (non-individuals), the relevant officer could be liable for the offence. Developers, landowners and their conveyancers will therefore need to review existing and proposed agreements and ensure ongoing compliance if they are disclosable CCAs under the Act.

Our Comment

A number of issues can be foreseen in the proposals for developers, landowners and their conveyancers:

  • Record keeping – As the obligation to register will have retrospective effect, requiring CCAs from at least April 2021 to be registered, landowners and developers will need to maintain adequate records so that they can manage their obligations when the time comes
  • Delays – It is anticipated that HM Land Registry will be involved in facilitating the disclosure of the information required under Part 11. It is already experiencing serious backlogs and the additional burden of processing mandatory information may exacerbate this further
  • Professional costs – It is likely that parties to CCAs will need to instruct lawyers to advise on their duties under the Act and to lodge any mandatory information, incurring additional costs
  • Liability – The retrospective and ongoing application of the Act will mean that developers, landowners and their lawyers will need to keep the status of all CCAs under constant review to ensure that they do not fall foul of the regulations, particularly given the severe penalties for non-compliance. There is also potential for unintentional breaches where parties to existing CCAs are not aware of the new proposals.

If you have any questions about the topics raised in this article, please get in touch.

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