Land Agreements: Can You Control What Someone Does On Their Own Land?

It has been established land law that in a transfer of land it is possible to restrict what someone does on the land.

Tulk v Moxhay is one of the few cases that all law students remember (even if I did have to look up how to spell the names for this article!).

However the Competition and Markets Authority has recently published updated guidance (https://www.gov.uk/government/publications/land-agreements-and-competition-law-dos-and-donts/land-agreements-and-competition-dos-and-donts)  following its finding that Heathrow Airport had breached competition law in attempting to set out what prices a landowner should charge for car parking.  In 2011 the law changed and from that point, land agreements became subject to competition law.

If a land owner is found to have breached competition law, the land owner faces the potential of large fines, claims for damages and obviously that the restriction is unenforceable.

Land agreements frequently contain restrictions on both parties as to what can and can’t be done so what restrictions are likely to be acceptable and what aren’t?

• land agreements which restricts the prices at which goods or services can be supplied (for instance, the Heathrow case mentioned above)
• restrictions with the aim of sharing or dividing up territories or customers (so for example, one supermarket chain agreeing with another not to set up within a certain locality)
• restrictions making it harder for other businesses to compete (for example, in a sale of land to a supermarket, the seller being obliged not to sell any other land to a competing supermarket chain)

The above are all likely to fall foul of competition law.  Do not assume existing land agreements are legal because they have been checked by lawyers in the past. The law changed in 2011.

It is fairly common to see restrictions in leases whereby either a landlord or a tenant attempts to control what can happen elsewhere on an estate.  Given the competition law implications, it is not clear how many of those restrictions are enforceable and careful, specific advice should be taken if someone intends to ignore the restrictions or attempt to enforce them.

If you require any advice on commercial land agreements, contact our Specialist Team.