Whose data is it, anyway?

The government is seeking to increase visibility in relation to land ownership, but will it achieve its intended aims? Jane Dockeray and Ingrid Stables examine the detail of a new consultation. Not satisfied with its ambitious and far-reaching overhaul of the planning system, the government has now set its sights on land ownership. Specifically, data on contracts, options and rights of pre-emption where they relate to the development of land. Why? Because it believes greater transparency over these arrangements will encourage companies to enter the house-building market. In short, the government argues that increased transparency is a prerequisite to achieving a “more democratic, more dynamic and more open” planning system. All players in the market stand to benefit if that vision is achieved, but what do these new proposals mean in practice, and how will they change the current position? What about existing Land Registry data? The Land Registry registers legal ownership of land and that information is already available as the register is public. However, not all interests in land have to be recorded on the register. For example, a landowner may enter into a sale contract with a developer where the ultimate purchase is conditional on the developer obtaining planning permission. The contract will usually be noted on the register, but full information is not provided on the face of the register. The government firmly believes it is in the public interest to increase transparency over contractual arrangements which give the beneficiary a right to some future control and use of the land. As such, it is targeting pre-emption rights, contracts conditional on the grant of planning permission and options. The proposals will “catch” a wide array of commercial agreements, such as agreements for lease and options in leases. Many industry players would be caught – not just developers. What’s in the pipeline? The government proposes to collect additional data for three purposes: the land register; a contractual controls dataset; or for “official use” to be shared across government for national security, law enforcement and financial stability. The official-use data will include the price-sensitive information (deposit, fees payable, price and indexation) and details of the parties’ legal advisers. Information which will be made available to the public, either through the land register or the dataset, will include: the type of agreement; the land; duration; parties; subsequent dealings; conditionality; and lockout periods. To LEI or not to LEI? The government wants beneficiaries of contractual arrangements to provide a legal entity identifier (LEI). This is a 20-digit alpha-numeric code which provides data on the direct and ultimate parent company, to show “who owns whom”. The government argues that this would provide valuable data on how particular groups of companies may be influencing local land markets. Is this in the public interest? The government is keen to stress that these proposals have been developed in the public interest. Yet will such data really encourage more small companies to enter the housing market? In practice, will small housebuilders trawl through Land Registry data sets to decide which land to earmark for their next build? And despite stating that it wishes to limit the burden on businesses, the proposal on LEIs will surely increase the administrative burden rather than lessen it. Industry players will want to know how the data on ultimate ownership structures will be used, and to what extent it really would provide valuable insights into whether particular corporate groups are influencing local markets. In short, do the ends justify the means? Also, wearing its public interest hat, the government has limited itself to potential development sites in registered land and excluded data on an individual’s contractual arrangements, including rights relating to the purchase or lease of a domestic residence. For commercial property, only contracts with a completion date that may be more than six months after exchange of contracts and conditional on the grant of planning permission will be caught. Burdenless for business? We don’t think so. In addition to registering for an LEI, the government is considering extending data collection to existing agreements if they are varied, assigned or novated. If the additional data is not provided, protection at the Land Registry will be lost. As these agreements can last for several years, industry players will find it irksome to have to disclose information which was not previously in the public domain, simply because the arrangement has been varied. To guard against beneficiaries simply deciding not to protect an interest at the Land Registry, the government is considering making notification mandatory in certain cases. Plus a new requirement on companies to certify in their annual accounts that all relevant interests are the subject of an agreed notice. For large corporate entities, those preparing the accounts will not be involved with registering notices at the Land Registry. It will fall to the lawyers and advisers to provide the certification for the accounts. In practical terms, then, another potentially time-consuming and expensive administrative hoop which companies will have to jump through, whether they like it or not. Mechanisms Under the government’s proposals, it will not be possible to protect a relevant contract at the Land Registry with a notice without supplying the additional new data. A beneficiary may be tempted to forgo the protection of a notice and seek to protect its interests by way of a restriction, but the government is looking at removing that avenue altogether. Effect and conclusion The government’s agenda of reforming the planning system is to be welcomed. But these reforms go beyond that. Not only do these current proposals have drawbacks, because they cast a wide net and will catch numerous agreements as well as being potentially onerous to comply with, but the jury is out as to whether they will achieve their stated aims and encourage more players to the housing market. The consultation paper, Transparency and cmpetition: a call for evidence on data on land control can be downloaded from www.gov.uk. Responses are required by 30 October. Jane Dockeray is a knowledge counsel and Ingrid Stables is a senior knowledge lawyer at Hogan Lovells International LLP Photo by Pixabay/Pexels