Draft Guidance on Land Agreements Published by OFT

On 15 October 2010 the OFT issued draft guidance on the application of competition law to land agreements. This follows the revocation of the Competition Act 1998 (Land Agreements Exclusion and Revocation) Order 2004 (the 'Order') which takes effect from 6 April 2011.

Under the Order, specified land agreements are excluded from the UK prohibition of anticompetitive agreements. From 6 April 2011, however, the special exclusion will be revoked and companies will have to self-assess land agreements for compatibility with the full range of competition law, as is necessary for other types of agreement.

Only those agreements that appreciably prevent, restrict or distort competition will be caught (and will consequently be void and unenforceable). The OFT states that there is no presumption that a restriction in a land agreement constitutes an infringement of competition law, and that it expects only a minority of restrictions to be anti-competitive. Further, competition law will only bite against those land agreements that are between businesses, and not transactions with individuals.

The draft guidance focuses on the self-assessment process and is intended to assist in applying the general principles of competition law. It provides a framework for assessing relevant features such as restrictions that may limit the way that land is used or the way in which rights over the land are exercised. The OFT notes that the types of restriction most likely to impact on...

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