Pre-Contract Searches and Inquiries

What is the principle of caveat emptor?

‘Buyer beware’.

Seller cannot offer misleading answers to enquiries.

BUT - Not obliged disclose physical defects, lack of planning permission etc.

Who is principally responsible for performing the pre-contract searches and enquiries?

Buyer’s solicitor.

Does it before contract because can then resile if issues present.

What is the list of searches and enquiries applicable to every property?

• Survey and personal inspection

• Local search

• Water and drainage search

• Pre-contract enquiries of seller

• Environmental searches

• Flood search

What is a survey? Are there different types?

Valuation survey = Lender requires it to ensure house is good security.

Structural survey = State of structure; potential alterations.

What searches are compiled under the ‘local search’?

• Local Land Charges Search (LLC1)

• Standard enquiries (CON29)

• Optional enquiries (CON29O)

What does the buyer’s solicitor look for under a ‘Local Land Charges Search (LLC1)’?

• Financial charges / restrictions imposed by local authority.

• Planning consents, tree preservations, conservation areas.

What does the buyer’s solicitor look for under a ‘Standard Enquiries (CON29)’ search?

• Liability for road repair.

• Planning permissions.

• Restricted development (i.e. Article 4 Direction).

• Contaminated land.

What does the buyer’s solicitor look for under an ‘Optional Enquiries Search (CON29O)’?

• Specific to surrounding locale.

• Include: environmental, pollution notices, common land rights.

What does a ‘CON29DW’ and ‘CommercialDW’ search for?

CON29DW = Residential properties

CommercialDW = Commercial properties

Establish if drains / sewers ‘adopted’ (i.e. responsibility of statutory undertaker not owner).

If does not drain into public sewer then owner liable for maintenance and upgrades.

What are some of the typical questions raised by the buyer’s solicitor to the seller?

• Disputes regarding property

• 3rd parties in occupation

• Compliance with covenants

• Planning permissions

• Boundary maintenance

• VAT status of transaction (commercial)

What does a ‘desktop search’ do?

Standard and universal environmental search.

Search plans of the area, local authorities / Environment Agency data.

If indicates contamination; commission survey of land.

Consider remedial works or insurance.

True or False: A flood search is only recommended if the property is next to a river or coast.

False.

Ground-water flooding can occur anywhere.

Can use ‘Flood Re’ government insurance for residential builds.

Does not apply to commercial property.

What are the searches recommended only for particular properties?

• Chancel repairs search

• Mining search (CON29M to Coal Authority)

• Canal & River Trust search

• Commons search

• Railways

• Highways

• Unregistered land searches

• Company search

What might trigger a ‘chancel repairs search’?

Property located near Church of England structure.

Liable for maintenance costs.

When will you be bound by chancel repairs (registered / unregistered land)?

Registered land…

• Lost overriding status from 13 October 2013.

• Still binds buyer if last transfer for value occurred prior to that date.

Unregistered land…

• Chancel repair liability in title deeds;

• Caution against 1st registration.

NOTE - Best advice? Obtain insurance. Searches / investigation cost too much.

What does a search at the Canal & River Trust reveal?

• Liability for repairs to waterways, banks and tow paths.

• Previous flooding incidents.

What does a ‘commons search’ reveal? When should I perform one?

Common rights (i.e. right to pasture).

Search if on green-field site or open spaces.

Use CON29O form in local search under ‘enquiry 22’.

What searches must you perform if it’s beside a railway track?

Pre-contract inquiries with seller.

May reveal obligation to maintain boundary, restrictions on building works.

Network Rail will not respond.

CON29 form in local search reveal proposed rail scheme.

What will a company search reveal?

• Whether Seller has capacity to enter contract.

• Confirm ID of officers of company.

• Fixed / floating charges secured on property.

• Repeat search before completion for insolvency.

Whose solicitor would conduct a bankruptcy search? How would they do this?

Lender’s personal solicitor or buyer’s solicitor acting on their behalf (i.e. residential property).

Searches made just before completion or prior exchange of contracts.

Person = K16 Form at Land Charges Department.

Company = Company search

What does an Index Map Search reveal? What is the form used and where is it sent?

Form SIM to Land Registry

Reveals:

• Property registered or not.

• Caution against 1st registration.

• Mines and minerals title reservation.

What is a Land Charges search used for? How do you perform this search?

Form K15 to Land Charges Department.

Reveals registered incumbrances against unregistered land.

What is a TPO? Where will it be revealed? What happens if you breach a TPO?

Tree Preservation Order.

Revealed under LLC1 - Protect local trees.

Criminal offence to lop / fell tree.

Under what search can you discover that a property is in a conservation area?

Revealed under LLC1 / CON29 results.