HGCR Act 1996 - Limits to the Act    © Daniel Atkinson 1999

Legislative Progress

The Housing Grants, Construction and Regeneration Act 1996 was enacted on 24th July 1996. Part II introduces payment provisions and adjudication procedures for "construction contracts". The Act implies terms stated in secondary legislation, namely the Scheme for Construction Contracts, in the event of no satisfactory specific contract provisions. The Act is effective from 1 May 1998.

Excluded Construction Contracts

By Statutory Instrument "The Construction Contracts Exclusion Order 1998", the Secretary of State has exercised powers under section 106(1)(b) of the Act, and the following are excluded from the operation of Part II:

1  Agreements under Statute

Agreements under Statute listed at sub-paragraphs 3(a) - (d) of the Order are excluded from the Act.

The agreements under paragraph 3(a) are agreements under the Highways Act 1980 under

- Section 38 or

- Section 278.

(Section 38 was amended by and Section 278 substituted by the New Roads and Street Works Act 1991 sections 22 and 23.)

Section 38 Agreements are agreements to take over maintenance of a highway made between the Highway Authority and a person liable to maintain the highway under a special enactment or by reason of tenure, enclosure or prescription.

Section 278 Agreements are agreements for contributions towards the expenses incurred by the highway authority in the execution of works, in exchange for conditions or modifications to the construction of the works.

The agreements under paragraph 3(b) are agreements under the Town and Country Planning Act 1990 as amended by Section 12 of the Planning and Compensation Act 1991, under

- Section 106;

- Section 106A; or

- Section 299A.

Section 106 Agreements are agreements by a local planning authority with a person interested in land, regulating the use or development of the land.

Section 106A Agreements relate to agreements for the modifications and discharge of planning obligations.

Section 299A Agreements relate to Crown Planning Obligations.

The agreements under paragraph 3(c) are agreements under Section 104 of the Water Industry Act 1991 in which the sewerage undertaker agrees with any person constructing any sewer or any sewage disposal works, to declare the works vested in the undertaker after completion.

The agreements under paragraphs 3(d) are agreements under Section 1 of the NHS (Private Finance) Act 1997 for externally financed development agreements.

2  Private Finance Initiative

A construction contract entered into under the Private Finance Initiative is excluded from the Act if:

- the contract contains a statement that it is entered into under the Initiative;

- the consideration is determined by the standard of service or the right to operate the facility;

- one of the parties to the contract is connected or controlled by the Government in the specified manner.

3  Finance Agreements

Finance Agreements are excluded from the Act defined as:

- any contract of insurance;

- any contract for the formation or dissolution of a firm;

- any contract for the lending of money;

- any contract of guarantee.

4  Development Agreements

Development Agreements are excluded from the Act defined as contracts which include for the grant or disposal of freehold, or leasehold which expires more than 12 months after the completion of the construction operation.