The proposals
The Ministry of Housing, Communities and Local Government (MHCLG) is calling for evidence on proposals to increase transparency of contractual mechanisms used to exercise control over land.
HM Land Registry says it’s committed to registering all publicly owned land by 2025 and aims to achieve comprehensive registration by 2030. However, it finds data on the control of land limited.
MHCLG’s proposals would require additional data from the beneficiaries of certain types of interests in land:
- rights of pre-emption
- land options
- estate contracts
Our view
Transparency
Landowners and developers may regard the proposals for additional transparency on potentially developable land as:
- too intrusive in commercially sensitive situations
- giving rise to loss of confidentiality and competitive advantage
- requiring too much bureaucratic enquiry
Our view is that the government’s case for improving sources of information in the public interest is made out for publishing additional data on contractual control interests in land that could be used for development.
However, we believe that the proposals should be subject to more extensive proposals for exemption from disclosure where contractual controls over land do not materially affect land as it is, or is to be, used that has no reasonably foreseeable development likelihood.
Any interference with the market should be limited to the minimum necessary to deal with situations where it has demonstrably led to matters inconsistent with the public interest.
Unilateral and agreed notices
We understand the government’s motivation in ruling out the use of unilateral notices and resorting to agreed notices in order to elicit the disclosure of relevant information.
However, we hope that unilateral notices are permitted to continue in use where exemptions from disclosure requirements apply.
Estate contracts
Estate contracts are of such comprehensive scope in land transactions that a clear definition of what’s to be included, and what’s to be exempted, from disclosure should be set at government level.
Inclusion in data sets
We take the view that information for inclusion in data sets should be moderate and, at least initially, should not delve too ambitiously.
How deeply the drive for granular details should go should, for example, be limited to relevant planning information and contractual documentation that imposes controls over land in that regard.
Beneficiaries
We agree that beneficiaries should be required to provide updating information on variation, termination or assignment or novation.
Information that has been provided should be updated on the occurrence of a material event. Each such change referred to is a material event (except variations unless they altered key information already given).
Failure to provide information about the changes effected by relevant transactions would mar the usefulness or applicability of the information originally provided and be misleading.
Requirement to supply additional data
We believe that the requirement to supply additional data should be limited to new contractual interests only.
Digital registration
A digital registration process limiting digital intervention could assist in reducing delay, but not all applicants have digital capacity.
Limiting human intervention might contribute to the potential for fraud and undermine confidence in the integrity of the register.
Enforcement
Enforcement of mandatory measures would involve changes of the law additional to the changes in procedure.
In our opinion, enforcement measures should be avoided and only be introduced as a last resort at a later stage if avoidance practice has become markedly widespread.
What this means for solicitors
If the regime is implemented, solicitors will need to advise clients at the outset about how much of their data will be made publicly accessible, as this can have commercial implications.
We anticipate that the changes will likely affect City firms the most.
The government believes that the benefits outweigh the negatives because making more data transparent should allow more competition in the housing market.
Next steps
This consultation closes on 6 November.
