The Department for Levelling Up, Housing & Communities (DHLUC) has recently completed a public consultation on improving transparency on "contractual controls" over land to identify matters affecting land which can act as a drag on development.
HM Land Registry will be responsible for collecting and publishing information on these "contractual controls" and information will be required not only on the contracting parties and the length of the agreement but also the title numbers of all relevant land; any ability to extend the lifespan of the agreement and the Solicitor Regulation Authority numbers of the solicitors acting. Many of the "contractual controls" referred to are matters we frequently see within Development Agreements of industrial & logistics land.
What is meant by ''contractual control''?
(a) Options in respect of land transfers and leases for terms of more than seven years.
(b) Pre-emption agreements containing a "right of first refusal",
(c) Conditional contracts.
(d) Promotion and landowner agreements.
What are not proposed to be classified as "contractual controls"?
(a) Overage and claw back agreements on the basis they secure further payments rather than controlling land.
(b) Restrictive covenants on the basis there is already public information held at HM Land Registry (HMLR) regarding their effect on development.
(c) Agreements with a contractual life of less than 12 months and no ability to extend their lifespan.
(d) Agreements in respect of unregistered land.
When is it proposed the new requirements come into force?
6 April 2026, but with retrospective effect from 6 April 2021. The proposal is for information to be provided to HMLR within 60 days of completion of a contractual control agreement.
What are the proposed penalties for non-compliance?
At present, options; pre-emption agreements; conditional contracts; promotion and landowner agreements are commonly protected at HMLR by way of title notices or restrictions. Under the proposals, these protections will only be available where the necessary information has been provided to HMLR within the 60 day time period.
What is our view on the DHLUC proposals?
We have been interviewed by HMLR on the proposals and raised the following issues:
(a) Many of the agreements proposed to be covered by their very nature contain confidential provisions that potentially last for many years. Requiring disclosure could dissuade the parties from entering into them.
(b) The potentially onerous retrospective nature of the proposals.
(c) The inconsistent approach to unregistered land.
(d) The potential for other landowners to use the publicly available information to object to or delay developments.
We shall provide further updates in future bulletins.
