The Levelling-up and Regeneration Act 2023 (“LURA”) is an act with a broad scope. One of the facets of LURA is the new ability for the government to create additional ways of requiring anyone to provide information about interests and dealings in land.
This follows hot on the heels of the register of overseas entitles under the Economic Crime (Transparency and Enforcement) Act 2022 (“ECTEA”), the increased corporate disclosures under the Economic Crime and Corporate Transparency Act 2023 (for further information on these acts, please see our articles here and here) and the requirements of the Trust Registration Service. Together these tools are intended to allow UK authorities to proactively target organised criminals and others seeking to abuse the UK’s open economy.
… But not yet
LURA gives the government the ability to create new regulations requiring the provision of certain classes of information in relation to land ownership or control and transactional information in the interests of three permitted purposes in England and Wales. These are:
- the beneficial ownership purpose – identifying the persons who are the beneficial owners of land in England or Wales and/or understanding the relationship of those persons with the land that they beneficially own;
- the contractual control purpose – contractual rights arising under contracts of land for development, use, leasing, disposal or acquisition. Information is within scope if the information would be useful for the purpose of understanding relevant contractual rights; and
- the national security purpose – land that appears to the Secretary of State to be in an area, or which has anything situated on or carried out on it that gives rise to, a threat to national security.
It is interesting that these powers are given to The Secretary of State for Communities, Housing and Local Government and not, more logically the Cabinet Office (which is responsible for the national security screening of corporate transactions) or the Secretary of State for Business and Trade (which is responsible for HM Land Registry and Companies House).
In Scotland and Northern Ireland, the only permitted purpose is national security. No such regulations have yet been made under LURA but the government is increasing its toolkit to find out more about who truly owns what in the UK. As and when any regulations are made, they will specify the trigger of the disclosure, the period for compliance, the person to whom the obligations apply and to whom the disclosures are to be made. However, LURA does specify that this person must be the Chief Land Registrar or another person exercising public functions on behalf of the Crown.
What might need to be disclosed about my transaction?
It is a criminal offence not to disclose the transactional information. The obligations are wide and apply to instruments, contracts or other arrangements creating, altering, extinguishing, evidencing, or transferring relevant interests in land, or conferring, amending, assigning, terminating, or otherwise modifying relevant rights concerning land. The details of the following may need to be disclosed for a given transaction:
- the parties;
- the persons on whose behalf or for whose benefit the parties are / were acting;
- the terms;
- the professional advisors;
- the source of any money paid or other consideration given; and
- copies of documents giving effect to or evidencing a transaction.
The Land Registry as the gate keeper of compliance
As was the case with the register of overseas entities, LURA envisages that any regulations made may need to “prevent a relevant registration act from being carried out in relation to a relevant interest in land or relevant right concerning land” to ensure compliance. This means that new Land Registry restrictions may be placed on affected titles at the Land Registry which prevent dealings with the land if compliance cannot be proven. This could mean that a landowner will not be able to sell, buy, charge or lease if it has not disclosed something it should have.
What should I be doing?
There are not any regulations made yet which require these far-reaching disclosures and we are not yet aware of any coming. However, the government has strengthened its ability to probe further into deals involving land and look beyond information which is usually made public at the Land Registry. When the government grants itself new powers, it has a tendency to use those powers.