City lawyers have warned the government that proposals to transfer most of the functions of Land Registry to a private contractor could damage the ‘fundamental foundation stone’ of the UK’s property market.

The Department for Business, Innovation & Skills is consulting on its second proposal in two years to sell parts of the registry to a private investor.  

In its response, the City of London Law Society says the ‘likelihood’ of a lack of impartiality and conflicts of interest arising from private sector involvement could make it difficult for Land Registry to fulfil its adjudicatory functions.

The society’s land law committee also says the consultation underestimates the technical nature of land registration. For instance, many applications to register complex transactions take several months, requiring the availability of expert staff to deal with technical registration issues as they arise.

Meanwhile, data held by the registry is a ‘great enticement’ to private organisations that would seek to use it for their own purposes. 

‘We are concerned about what protections there will be to safeguard the interests of our citizens from a data protection perspective,' the response says. ‘Although the government refers to safeguards, very little information is provided in the consultation on this critical issue.’

The society also notes that Land Registry has an 'exempt information document' scheme under which documents containing commercially sensitive information can be redacted to protect such information from public disclosure. 

However, ‘if part of the value of the Land Registry to a private organisation is being able to take commercial advantage of the information or data available in registered documents, then clearly there will be a conflict of interests when it comes to treating documents as [exempt information],’ the CLLS says.

The society also raises concern about the current programme under which Land Registry is taking over local land charge data from local authorities. This would not achieve the promised efficiency savings as conveyancers would still need to deal with local authorities over CON29 enquiries, it said.

And it questions whether a private company running Land Registry operations would be obliged to adopt any legislative changes arising from the Law Commission’s consultation to changes on the Land Registration Act ‘if they do not fit in with the company’s commercial imperatives’.