The government is currently seeking views through its consultation document setting out the options on moving Land Registry operations into the private sector.
While Crown ownership of the Land Register will remain unchanged, all of the core functions of Land Registry will be transferred out of the public sector through a contractual arrangement with a private operator.
The government has stated that the sale of Land Registry will allow it to pay down debt, or enable other investment for the benefit of taxpayers.
Should I be worried?
Companies and others holding and/or dealing in commercial real estate should expect to have a Land Registration system which provides:
- Appropriate protections to guarantee the inherent value, integrity and marketability of their registered title interests
- A timely and efficient process for the creation and transfer of their property interests, within sensible commercial timeframes
- Readily accessible registration and title information services at a reasonable cost
- A properly resourced service both in terms of people expertise/staffing and the use of modern IT tools
- Security of data, protection against fraud and adequate indemnity protection or other recourse when things go wrong
- Safeguards to ensure that the interests of its customer base (registered property owners and occupiers) are prioritised ahead of commercial drivers
As explained further below, it is unclear from the current consultation proposals whether, or to what extent, privatisation will be able to deliver these fundamental safeguards.
What are the real issues?
The consultation paper covers some important issues but is as notable for what it doesn't say, as what it does. The most fundamental question is not asked - should Land Registry be privatised at all? To help you decide, the following issues are worth considering:
- The money
Financially, sale of Land Registry will deliver an immediate return. What is less clear is:
- the likely cost to government of the contract which it is said will "govern the scope and service standards that NewCo would deliver in respect of the Register and specify the amount it would receive from government for doing so". It is worth knowing that this is against the fact that Land Registry is currently self-funding
- how and to what degree fees to the end user will be controlled
- how and to what degree data charges will be overseen and controlled
- how and to what degree payments out in relation to the state-backed guarantee will be recovered from NewCo, bearing in mind that NewCo will be responsible for any error/omission etc leading to a payment out by government/the taxpayer
- the actual and associated costs of privatisation
- Quality control
In terms of the monitoring group within government which it is proposed will oversee the workings of NewCo, there is no detail around:
- the levels of expertise and experience of the group and from which businesses should the group be drawn, as well as Land Registry
- clear roles and accountabilities within the group
- what the system of reporting by NewCo will be and the information required and
- who is responsible for taking action where this is necessary
- Maximum Security
- The information Land Registry controls is currently subject to very high levels of security. How this will be replicated in a private organisation is not explored and reassurance on this point would be welcome
- Similarly, it is not clear how much responsibility government will retain for data it no longer has control over
- The People
- Reassurance around the intention of transferring existing staff is given and it is recognised in the consultation that staff are critical to the success of NewCo. Additional reassurance around how existing staff would be incentivised to stay and experienced personnel retained, however, would be welcome
For further discussion around the above issues, see the City of London Law Society Land Law Committee response to the consultation.
For further information, please contact Ryan Davies.