Advertising hoarding case casts light on the land transaction OJEU tendering exemption

A recent case[1] throws light on the scope of the exemption for “land transactions” from the need for an OJEU tender process.

The case considered whether a lease of an advertising hoarding was a service concession contract. The Court of Appeal decided that, even if the lease for the hoarding had been a service concession, it would have fallen within the “land transaction exemption”.

Between the 2006 and 2015 Regulations, the wording of this exemption had changed:

• The 2006 Regulations exempted, “contracts for the acquisition of land, including existing buildings and other structures…”[2];
• The 2015 Regulations exempt “public service contracts for the acquisition or rental by whatever financial means, of land, existing buildings or other immovable property…”[3]

We had wondered what the significance was of this change of wording and particularly the reference to “service contracts”. The answer is “none”. The court said that, although the wording of the different versions of the Regulations differed slightly, there was no change of substance.

The test as to whether a transaction falls within the “land acquisition” exemption, therefore, remains the same. It is whether the substance of the transaction is the transfer of land or whether it is something else, such as the construction of buildings on land or, as was alleged in the case, the provision of advertising services.

In the case, the substance of the transaction was the rental of land and not the provisions of “advertising services”. The payment was of rent and not a payment for a “right to exploit a service” that the lessee was required to provide.

[1] Ocean Outdoor UK Ltd v Hammersmith and Fulham LBC [2019] EWCA Civ 1642
[2] Public Contracts Regulations 2006 Regulation 6(2)(e)
[3] Public Contracts Regulations 2015 Regulation10(1)(a)

For more information

If you need advice on land transactions and procurement, please contact Andrew Millross.