Mandatory Property Disclosures? Part 11 of the Levelling-up and Regeneration Act 2023

The recent Royal Assent of the Levelling-up and Regeneration Act 2023 marks a pivotal moment in UK property law, introducing a comprehensive set of provisions. Of particular interest to real estate professionals is Part 11, titled "Information about interests and dealings in land," which lays the groundwork for a new era of transparency in land ownership and control.

Overview of Part 11's Framework:

Part 11 establishes a framework that mandates the disclosure of certain land ownership and control information in England and Wales. The specifics of these requirements will be detailed in forthcoming regulations but it is clear that the scope will be broad and encompassing.

The Three "Permitted Purposes":

Part 11's disclosure requirements hinge on three "permitted purposes":

1. The Beneficial Ownership Purpose: This purpose focuses on identifying individuals who are beneficial owners of land, or understanding their relationship with the land. It leverages the definition of a beneficial owner from the 2017 Money Laundering Regulations, potentially imposing significant obligations, especially on overseas entities.
2. The Contractual Control Purpose: Here, the emphasis is on understanding relevant contractual rights related to land development, use or disposal. This wide scope includes typical land dealings like sale agreements, land options and leases.
3. The National Security Purpose: This purpose applies if there is a perceived national security threat connected to the land or activities on it. It aims to identify those with ownership, control, or relevant interests or rights in the land.

Transactional Information and Its Implications:

Part 11 extends to "transactional information," encompassing a wide array of details from party identities to transaction terms and sources of funds. The handling of this sensitive information, whether kept confidential or made public, remains a concern and an area of speculation.

Custody and Consequences of Non-Compliance:

The information collected under Part 11 will be held by either the Chief Land Registrar or another government body, depending on the nature of the information. Non-compliance with these requirements is a criminal offence, leading to potential imprisonment or fines, and can also impact the Land Registry's ability to register relevant rights or interests in land.

Conclusion:

Part 11 of the Levelling-up and Regeneration Act 2023 signifies a significant shift in the landscape of land ownership and control in the UK. As the real estate industry awaits the detailed regulations, it is crucial for professionals to stay informed and prepare for the changes ahead. For further insights or assistance in navigating these new provisions, feel free to reach out.