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Legal Briefing

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A new competitive landscape for real estate

Overview

Until now, competition law has had little or no impact on UK land agreements. The Competition Act 1998 (Land Agreements Exclusion and Revocation) Order 2004 (the Order) enabled a wide range of restrictions in land agreements to benefit from an exclusion from the prohibition of anticompetitive agreements under Chapter 1 of the Competition Act 1998 (the Act).

In January 2010 the Department for Business, Innovation & Skills (BIS) announced that the Order will no longer apply from 6 April 2011. From that date restrictions in both existing and new land agreements which infringe the prohibition in the Act are automatically void. If these restrictions cannot be severed from the remainder of the agreement, then the entire agreement may be unenforceable. In addition any infringement will expose the parties to the agreement to a raft of possible sanctions under the Act.

In view of the potentially significant commercial consequences it is important for land owners, occupiers, developers and their lenders to assess the key terms of any land agreements to ensure their compliance with competition law before the 6 April 2011 deadline. The aim of this briefing is to provide practical guidance on carrying out such an assessment.

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