Regulations to disclose the what, where, who and when relating to contractual control agreements - Boodle Hatfield

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13 Feb 2024

Regulations to disclose the what, where, who and when relating to contractual control agreements

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Andrew Wilmot-Smith View profile
Kate Symons View profile
4 min read

The Government has published a consultation Contractual Controls on Land on new regulations, currently in draft form, that will require the publication of information to provide greater transparency on the existence of 'contractual control agreements', such as option agreements, used to control and secure land for development, but falling short of the transfer of outright ownership.  

Such agreements are commonly protected by a notice or restriction on the Land Registry title to which they relate, but are not currently required to be registered or recorded in any central accessible public register.  Whilst landowners and developers may benefit from the degree of confidentiality afforded by the current regime, for example where assembling a development site, the new regulations to be introduced pursuant to the Levelling Up and Regeneration Act 2023, are intended to promote increased transparency, allowing interested persons to find out more about where land is being brought forward for development and promoting a greater understanding of where and how land is under control in the form of a publicly accessible data set detailing the “what”, “where”, “who” and “when” of each control agreement.

The draft regulations published in January of this year are anticipated to come into force in April 2026 and will affect all new control agreements entered into after that date as well as having retrospective effect, requiring the disclosure of information relating to existing agreements entered into after April 2021.   

Details of the regulations are summarised below.  Responses to the consultation must be made by 20 March 2024.

  • Accessible data: The intention is for the collated information relating to control agreements to be published in a single, user friendly, fully accessible dataset.
  • Control Agreements: The term control agreement includes option agreements, pre-emption agreements, conditional contracts and promotion agreements in each case where the agreement is in writing, relates to registered land and is intended to facilitate the future development of land.  The regulations will apply to control agreements that bind the parties for 12 months or more or (if less than 12 months) include provision for the grantee to extend the agreement.  Overage and clawback agreements, restrictive covenants, agreements to facilitate finance and loan agreements, and agreements entered into for the purpose of national security will not be control agreements.
  • Transparency: Unlike the current position where a developer with the benefit of a control agreement can choose whether or not to note its interest on the Land Registry title to the subject property, the new regulations will apply to all control agreements removing the ability to opt to stay 'off the record'.
  • Timing: Once the regulations are in force, the party with the benefit of the agreement (the grantee) will be required to register details of all new control agreements within 60 days of the date of the agreement.  As noted above, the regulations also require the compulsory registration of any existing control agreements entered into, varied or assigned after 6 April 2021 (subject to a 12 month transition period to allow data to be collated).
  • Information to be provided: The information to be recorded must be provided by the grantee’s solicitor within 60 days of the grant of a new control agreement.  The information to be provided includes the type of control agreement, the names and registration numbers of the contracting parties, the start and end dates of the agreement (and details of any provision to extend), the Land Registry title number of the subject property and the SRA details of the solicitors acting on behalf of the grantee and grantor.  
  • Confidentiality: The regulations do not require the publication of the full control agreement.  Accordingly, commercially sensitive information beyond the mandatory information outlined above will not be disclosable or available on the public record.
  • Compliance: The mandatory information must be provided regardless of whether the grantee chooses to protect the agreement by way of a Land Registry notice or restriction.  The Land Registry will however require the mandatory information to have been provided before and as a condition of the registration of a notice or restriction.  Non-compliance will be a criminal offence, ultimately leading to a fine or imprisonment.
  • Guidance: The consultation promises further guidance, to be published 6 months before commencement, including clear examples of the information to be collected and in what format it is to be provided and further clarity on penalties and defences.
  • Costs: The requirement that a conveyancer provides the mandatory information will mean that legal costs will be incurred, the proposals do not however include a charge to register or access the mandatory information.

The regulations present a number of potential areas for concern.  In the short term there is the potential impact of the retrospective application of the regulations, requiring developers to pay advisors to review and disclose information relating to potentially sensitive control contracts entered into as far back as 2021.  Longer term, the availability of sensitive information that would previously been confidential may result in higher land prices and other hurdles for those looking to develop sites, whilst perhaps strengthening the hand of those that may be looking to sell land or looking to prevent and or object to a development.

The consultation can be viewed here: Contractual controls on land: consultation - GOV.UK (www.gov.uk)

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