Land Agreements

The application of the public procurement rules to contracts concerning land has given rise to complex issues, generated uncertainty for public authorities and resulted in a sometimes confusing body of case law.

It is clear that the procurement rules are not applicable to the sale or lease of land. However, in some cases, it is unclear whether the contract at issue is truly a sale or lease or whether it in fact amounts to a public works contract or concession, which the public body must put out to tender.

The UK Procurement Act 2023 continues the exemption, in the UK, for contracts for the sale or lease of land and buildings.

Questions will continue about whether transactions which involve the development of land could amount to works contracts subject to procurement. In reviewing the key legislation and case law below, a number of issues emerge for consideration, including:

• How is the main purpose of the contract determined?
• What if the contract is mixed between land acquisition and performance of works?
• What is the impact of the legal categorisation of the contract?
• If buildings are yet to be constructed, how does this affect the analysis?
• What if, at the time of signing the contract, the developer does not have a legal obligation to build?
• What are the effect of contingent clauses, such as options?
• What level of involvement must a public body for the works to be to its specification?