Pre-contract Searches and Enquiries

Property Practice - Chapter 3

Who makes the searches and raises enquiries?

The buyer’s solicitor - before entering a binding contract - if find out after, may not be able to withdraw without breaching contract

Failure to do right searches can lead to a claim of negligence on the solicitor

Use searches to give clear, coherent advice to the client and allow them to make an informed decision

*info will also be important to a lender making a loan (buyer’s solicitor will often act for lender)

What is the first search that should be done?

i) professional survey (valuation for the lender - if property suitable for security for a loan) - should be carried out on all properties

• structural survey may be recommended if the condition of the property is an issue.

ii) personal inspection - may reveal more about the property

What is a local (land charges) search?

Form LLC1 - provides details of any financial charges or restrictions on land that have been imposed by public authorities under statute, for example planning consents, tree preservation orders and conservation area designation orders.

What are the standard enquiries? (and what form) 

Form CON29 - reveal lots of information such as planning permissions, any restrictions on permitted development (such as an Article 4 Direction), whether the land has been designated as contaminated land, etc. - will also raise questions of liability for road repair

Local searches only relate to the property itself and not adjoining land - different enquiries are needed if the buyer is concerned about connecting land (e.g. a nice view)

What form is used for optional enquiries and what kind of things do they reveal?

• Form CON29O

• cover a range of diverse matters, including environmental and pollution notices and rights over common land - as well as info about roads and public highways adjacent to the property 

What is a water and drainage search?

Establishes whether the drains and sewers serving the property are ‘adopted’ and therefore the responsibility of the statutory undertaker rather than the owner of the property

• will reveal whether the property is connected to a public water supply.

• If the property does not drain into a public sewer, the buyer will be liable for the costs of maintaining the drains and sewers and may be liable for the costs of bringing them up to adoption standard if the water authority decides to adopt them.

What pre-contract enquiries are often made by a lawyer?

• any third party rights?

• has the owner complied with any covenants?

• any planning permission? - important - need to check if PP was needed or would block any future alterations/uses of the property - should obtain a copy of the PP from seller or local authority (check CON29/CON29O results for completion notices/enforcement proceedings)

• issues on boundary maintenance

• (if commercial property) - the VAT status of transactions

What is an environmental search?

Both the CON29 standard and the CON29O optional enquiries of the local authority contain some questions relating to entries and notices made under the Environmental Protection Act 1990 - but can’t rely only on them (not complete enough) 

‘Desktop’ search = looks at plans of the area, information published by local authorities and the Environment Agency

Looks at risk of environmental contamination - may want a physical assessment by an environmental surveyor. 

What is a flood search?

A flood search is indicated where the property is close to a river or the coast.

Property-specific flood risk searches are available from commercial providers and these vary in their cost and coverage - if a flood risk is identified, a specialist report can be obtained to advise the buyer on flood risk and possible flood damage mitigation measures.

Insurance for flooding is available for most residential properties thanks to a Government-backed reinsurance scheme known as ‘Flood Re’, but commercial properties (including buy-to-let properties) are not covered by Flood Re (insurance much more expensive)

What is a chancel repairs search?

The owners of certain properties in a Church of England parish where there has been a medieval church with a vicar could be liable to pay the cost of repairing the chancel of the parish church - chancel search checks liability for payment (even if no obvious Church of England)

What is a mining search?

A mining search of the Mining Remediation Authority, on a CON29M form, 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, whether there are shafts on the property, the existence of underground workings which may cause problems with subsidence and whether any claims for subsidence damage have been paid in the past or are pending.

• Coal mining areas are identified in the Mining Remediation Authority’s interactive map viewer

• since it is not obvious from surface, makes sense to carry out search if in mining area

• Mining searches may also be indicated where there is a mines and minerals reservation revealed in the title investigation.

What is a canal & river trust search?

If the property is adjacent to a river or a canal, the buyer needs to be made aware of any liability for repairs to the maintenance of the waterways, banks and tow paths - as well as whether the property has been affected by flooding in the past

• This information can be obtained from the Canal & River Trust.

When would a commons search be used?

If the property is on green-field sites or adjoining an open space such as a village green may be affected by common rights, such as the right to pasture, that have been protected under the Commons Registration Act 1965

• optional enquiry 22 in the CON290

When would a railways search be used?

A buyer of land adjoining a railway line will want to know whether there are any obligations to maintain the boundary features separating the property from the railway line and whether there are any restrictions on carrying out building work next to the line.

What is a highways search?

Info about roads adjoining the property.

Used where there appears to be land in private ownership separating the property from the highway

To establish whether verges and pavements are publicly maintainable

How would one conduct an unregistered land search?

An Index Map Search (SIM) - to see if the land is registered/ pending registration - and a a Land Charges Department search against the seller and previous estate owners will be necessary in any purchase of unregistered land (to see if any types of incumbrance been protected by registration and would be binding on the buyer)

When would you conduct a company search?

Where the seller is a company - will confirm whether the seller has the capacity to enter into the contract, confirm the identity of the current officers of the company (to check the documents are signed by the right people) and to see if there are any fixed or floating charges secured on the property that will need to be discharged on completion

• will be needed to be repeated just before completion to check for insolvency issues.

*where the property is unregistered land, company searches should also be carried out against any corporate estate owners revealed in the epitome of title. (Form K15)

When would you conduct a bankruptcy/insolvency search?

A solicitor acting for a lender should make a search against the borrower (who may also be their buyer client) to ensure that there are no bankruptcy or insolvency proceedings affecting them.

Where the borrower is an individual, the search is done by sending a K16 form to the Land Charges department in Plymouth.

Where the borrower is a company, a company search will be needed.

What is a Tree Preservation Order?

TPO = revealed in local land charges search (LLC1) - designed to protect trees of amenity value to local communities.

The buyer will need to be told about any TPO as it is a criminal offence to lop or fell a tree subject to a TPO without the consent of the local planning authority

Solicitor should raise pre-contract enquiries and get a copy of the TPO.

What is a smoke control order?

A smoke control order will be revealed as a local land charge in the LLC1 result

Its purpose is to restrict the use of non-smokeless fuels in domestic fireplaces and so might be a problem for the buyer if the property has an open fireplace which they intend to use.

What is the problem if the property is located in a conservation area?

If the property is located within a designated conservation area, this will be revealed in either the LLC1 or CON29 results.

The buyer should be informed as it will be more difficult to make changes to the property than would normally be the case.

What should a solicitor do if there is an adult occupier of the property?

Could potentially claim an interest or tenancy - buyer’s solicitor should ask the seller about occupiers in the pre-contract enquiries of the seller.

If there is an adult occupier, the seller should be required to obtain from the occupier a release of all rights in the property and agreement to vacate on or prior to completion - this is usually dealt with in the contract.