The Levelling Up and Regeneration Act (the Act) became law on 26 October 2023 as part of the Government’s agenda to revitalise the country. The Act has been passed by Parliament, but regulations still need to be drafted for the law to come into effect. The process will undoubtedly be somewhat delayed given the General Election now due to take place on 4 July 2024 but, regardless of the outcome of the election, this is a policy that benefits from bi-partisan support and so is likely to progress come what may.
Part 11 of the Act, which deals with the registration of interests in land, has been relatively overlooked. It allows for the gathering of three categories of information, which have not previously been publicly available: beneficial ownership, contractual control, and national security. It is still difficult to predict how Part 11 will work in practice, but it is clear that it will become compulsory to disclose more information relating to land transactions and ownership/control.
One aim of the Act is to gather information about the ownership or control of property where that potentially presents a risk to national security.
Secondly, the Act strips away the privacy formerly afforded to beneficial owners i.e. those who financially benefit from the property but do not currently appear as owners on the registered title.
Another aim is to discourage the process of “land banking” – i.e. when developers do not build on land until its value rises – and to enable identification of repeat offenders. Residential property developers and large supermarkets will mostly be concerned by the requirement to register information in the contractual control category, which, as well as aiming to prevent land banking, is intended to help local planning authorities make better planning decisions and to increase market transparency. The Act grants HM Land Registry powers to make requests for information which could help provide understanding of relevant contractual rights. The aim is to identify who holds the relevant contractual rights and the circumstances in which they were created or acquired. The provision is drafted extremely widely, but the Government recently ran a consultation on the contractual controls element which clarified that the provision is expected to include options, pre-emptions, conditional contracts and promotion agreements which directly impact the development of land. The focus is on the details of the parties, the affected land, and the duration of the agreement. This consultation closed on 20 March 2024 and the results are awaited – although, given the recent announcement of the general election, it is likely that we may be waiting longer than anticipated for these to be published!
Nevertheless, it will be important at the start of new land transactions to consider what steps should be taken to ensure compliance and avoid potential delays or difficulties with registering at HM Land Registry. For example, parties should include mutual contractual obligations to supply information without delay. This is to ensure the party responsible for providing information to HM Land Registry at the end of a transaction has all necessary information. On assignments and underlettings, the parties will need to prove to each other that they have complied with the Act, or be required to do so. A landlord might want to impose this as a condition on a tenant, subtenant or assignee before granting consent.
Part 11 will operate retrospectively for any agreement entered into after 6 April 2021. Information will need to be provided within 60 days of making the relevant agreement, whether or not a registration is made at HM Land Registry. Consideration should therefore be given to what information may or may not become public when negotiating transactions, even at this early stage. For example, confidential information is often included in option agreements or conditional contracts, but there is currently no indication that the usual rules of exemption will apply to Part 11. In other words, sensitive information might not be redactable and could be published on the open registers. Failure to provide information requested under Part 11 is a criminal offence.
Further details of the regulations for Part 11 will continue to be published when they become available, and we strongly advise individuals to keep updated with the latest requirements.
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The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at June 2024.