Land agreements - Competition Act 1998

As forewarned in this month’s CPI Update, the Government has now made final The Competition Act 1998 (Land Agreements Exclusion Revocation) Order 2010 which revokes The Competition Act 1998 (Land Agreements Exclusion and Revocation) Order 2004 (SI 2004/1260) with effect from April 6, 2011.

The original 2004 Order excluded land agreements from the prohibitions on anti-competitive agreements imposed by section 2 of the Competition Act 1998 – known as the “Chapter I Prohibition”. By revoking the exclusion, land agreements will soon come within the Chapter I Prohibition in the Competition Act 1998. If an agreement falls foul of the Chapter I Prohibition, it will be unenforceable. Land agreements such as covenants restricting use after a sale, or developer-landlord agreements to restrict use of certain parts of new developments, or lease restrictions protecting a landlord tenant-mix policy may need to be looked at in the light of the Chapter I Prohibition.

The OFT says that it will publish guidelines this autumn on the application of the Competition Act to land agreements to assist businesses in the self-assessment of their agreements.