An important part of a solicitor’s role prior to exchange is to undertake searches with respect to the property to understand whether there is anything that the buyer needs to know before committing to purchase. As you will remember there are no legal obligations on the seller to proceed or the buyer to proceed until contracts have been exchanged. There can be any number of possible issues arising out of the searches so it is important to know the common searches that will be undertaken by a solicitor and the role that those searches play in the process of the transaction.
Some searches and enquiries will be relevant to every property. These are as follows:-
A Survey
A survey is an essential part of purchasing a property. It will ascertain whether there is any structural damage to the property. Mortgage lenders will instruct their own surveyor given the importance of structural integrity to the value of a property. Obviously a solicitor is not going to carry out a survey themselves but they may be able to advise on the most appropriate kind of survey. If there is significant remedial work that needs to be done to the property arising out of the survey then this can affect the overall view of the value of the property.
A Local Search
A local land charges search and standard enquiries of a local authority should be raised on every sale and purchase of a property. The local land charges search in a Form LLC1 provides details of any financial charges or restrictions on the land that have been imposed by public authorities under statute. An example of an LLC1 form can be found here.
This could include planning consents, orders related to the preservation of trees or conservation areas where planning permission might be restricted.
There is a standard enquiries form called a CON29 which will also reveal a lot of information such as outstanding planning permissions any restrictions on permitted development whether the land has been designated as contaminated etc. There could be a number of optional enquiries that could be raised depending on the locality of the property. This needs to be raised in a separate form called a CON290 and covers and diverse range of matters.
Water & Drainage Search
Purchasers of a new property could be liable for the costs of draining and sewage related to a property. The question of drain and sewer maintenance is not one for the local authority. Instead, a separate set of enquiries known as a standard drainage and water enquiry should be raised with a statutory undertaker, usually a water company. These are raised in a form COM29DW. The ordinary purpose of these enquiries is to establish whether the drains and sewers serving the property are adopted and therefore the responsibility of the statutory undertaker rather than the owner.
Pre-Contract Enquiries of the Seller
Normally, a solicitor for the buyer will send a list of questions to the seller’s solicitor. These are known as pre-contract enquiries. They are standard questions that most solicitors acting for a buyer would raise as a pre-contract stage of the transaction.
Environmental Searches
The Environmental Protection Act of 1990 brought a heightened awareness of the potential cost of cleaning up sites that are contaminated particularly since the costs can rest with the owner or occupier of a property and not just the original polluter. Environmental search and enquiries can be carried out to establish the risk and liability where the property is found on contaminated land for the purposes of the EPA 1990. These enquiries are very important and a solicitor could be found to be negligent if they failed to carry out the enquiries properly. As with building surveys there are different kinds of environmental searches that you could undertake, each one differing in scope and the detail given. The most common type of environmental search is known as a desktop search. This will be carried out by an environmental search company and will look at the plans of the area, information published by local authorities and the Environment Agency in order to get a picture of any potential contamination and liability arising therefrom.
Chancel Repairs Search
Come properties can be liable to pay the costs of repairing a church if they are within a Church of England Parish where there has been a medieval church and a vicar. In registered land the chancel repair liability lost its overriding status on 13 October 2013 but continues to bind a buyer if the previous transfer for value occurred prior to that date.
Mining Searches
The Coal Authority website states that one in four properties in Britain sits on a coalfield. There also might be areas which have been affected by mining activity in the past. This is a very specific enquiry but can be undertaken via the Coal Authority on a CON29M form. This will confirm if the property is in an area where mining has taken place in the past or is likely to take place in the future.
Canal & River Trusts Search
If the property is adjacent to a river or canal the buyer will need to be made aware of any liability for repairs to the maintenance of waterways, banks and towpaths. This can be undertaken from the Canal and River Trust.
Railways
It is possible to do searches on specific and existing proposed railway undertakings like Cross Rail HS2 or the Newcastle Metro. This enquiry would be in the CON29 form with the local authority and will reveal if the property might be affected by a proposed railway scheme.
There might be other searches required depending on who you are acting for. In the event that you are acting for a company in the purchase of a property you may need to check that the directors have the right to deal on behalf of the company. It is also important to undertake a bankruptcy or insolvency search against the borrower to ensure that there are no bankrupt or insolvency proceedings affecting them these searches must be made just before completion but some firms will also make them prior to the exchange of contract so that any problem can be sorted out in good time. It is important to note that it is not always in the buyer’s interest to undertake every single search necessary so part of your role as a solicitor will be choosing the relevant searches and applying them to the facts in your particular case.
Matters Commonly Revealed in Search Results & Replies to Enquiries
Following the outcome of your obtaining of searches and enquiries you will prepare a report to the buyer detailing the outcome. It is important that the report draws the buyer’s attention to any relevant matters arising. There could be any number of issues that you will need to further investigate. For example a road search might reveal that a road is not a public highway maintainable at public expense. This could give rise to potential further investigations being required as to who is paying for the maintenance and who will be entitled to use the road. We will discuss possible approaches to searches and their outcome in the course of our seminars.