Unit 1 Key element and structure of a freehold property transaction

1. Introduction to Property Transactions

• Properties vary significantly (flats, houses, offices, factories, shops, nuclear plants).

• Clients' purposes differ:

  • Owner-occupiers buy for residential or business use.

  • Investors buy for rental income or capital appreciation.

  • Some clients prefer freehold ownership (buying outright), while others opt for leasehold arrangements (pay-as-you-go rental).

• Despite variations, standard legal procedures apply to buying, selling, and leasing properties in England & Wales.

• Process of transferring ownership: Conveyancing.

2. Key Elements of Freehold Property Transactions

2.1 Two Major Milestones

1. Exchange of contracts (Legal commitment to the transaction)

2. Completion (Legal title transfers; final payment is made)

2.2 Three Transactional Stages

1. Pre-contract stage

   • Due diligence, contract drafting, title investigations.

2. Pre-completion stage

   • Final legal checks, fund transfers, mortgage arrangements.

3. Post-completion stage

   • Land registration, tax payments, final legal procedures.

2.3 Caveat Emptor ("Let the Buyer Beware")

• The buyer is responsible for ensuring the property is suitable.

• Seller is not obliged to disclose defects unless asked.

• Buyer must conduct searches, surveys, and due diligence before exchange of contracts.

• Exceptions:

  • Fraud/misrepresentation by the seller.

  • Failure to answer pre-contract enquiries honestly.

3. Pre-Contract Stage (Due Diligence & Preparations)

3.1 Seller’s Solicitor's Duties

• Prepare pre-contract package, including:

  • Draft contract (legal agreement of sale).

  • Evidence of title (Land Registry entries, deeds).

  • Property Information Form (TA6) (discloses disputes, planning permissions).

  • Fixtures & Fittings Form (TA10) (lists included items).

3.2 Buyer’s Solicitor's Duties

• Investigate seller’s title:

  • Confirm ownership.

  • Identify restrictions (e.g., covenants, easements).

• Conduct essential property searches:

  • Local Authority Search – Planning permissions, road schemes.

  • Drainage & Water Search – Checks sewage and drainage access.

  • Environmental Search – Flood risks, contamination.

  • Land Registry Search (OS1/OS2) – Checks ownership & restrictions.

  • Bankruptcy Search (K16) – Ensures seller is not bankrupt.

• Raise pre-contract enquiries with the seller.

• Negotiate contract terms based on findings.

4. Exchange of Contracts (Making the Deal Binding)

4.1 Key Features of Exchange

• Legal commitment begins – Buyer and seller are bound by contract.

• Buyer pays deposit (usually 10%).

• Completion date is fixed (usually 2–4 weeks after exchange).

• Contracts must be identical and signed by both parties.

4.2 Typical Contract Terms

• Property details (address, tenure, legal title).

• Purchase price & payment method.

• Deposit amount (typically 10%).

• Completion date.

• Special conditions (e.g., subject to mortgage approval).

5. Pre-Completion Stage (Finalizing the Sale)

5.1 Buyer’s Solicitor Responsibilities

• Conduct pre-completion searches to check:

  • No new encumbrances.

  • No bankruptcy orders.

• Ensure mortgage lender is ready to release funds.

• Draft & execute the Transfer Deed (TR1).

• Request completion funds from buyer.

5.2 Seller’s Solicitor Responsibilities

• Ensure seller’s mortgage is settled.

• Provide signed Transfer Deed to buyer's solicitor.

• Reply to final buyer’s solicitor enquiries.

6. Completion Stage (Ownership Transfer)

6.1 Key Steps

• Buyer’s solicitor transfers remaining funds to seller's solicitor.

• Seller's solicitor confirms receipt and releases title deeds.

• Keys are handed over to the buyer.

• Buyer takes possession of the property.

7. Post-Completion Stage (Final Legal & Tax Formalities)

7.1 Buyer’s Solicitor Duties

• Pay Stamp Duty Land Tax (SDLT) or Land Transaction Tax (LTT) (within 14 days).

• Register the buyer as the new owner at the Land Registry.

• Register any new mortgage on the title.

8. Professional Conduct Issues

8.1 Acting for Seller & Buyer

• Solicitors cannot act for both buyer & seller (conflict of interest under SRA Code).

• Exception: Joint buyers (e.g., spouses) can be represented together.

8.2 Acting for Borrower & Lender

• A solicitor may act for both a buyer and their lender in standard mortgage transactions.

• If a conflict arises (e.g., mortgage fraud risk), separate representation is required.

8.3 Undertakings in Property Transactions

• Solicitor undertakings are legally binding.

• Example: A solicitor cannot promise to send deposit funds unless they already have the money in their account.

9. Property Finance & Mortgages

9.1 Common Mortgage Types

1. Repayment Mortgage – Monthly payments cover principal & interest.

2. Interest-Only Mortgage – Monthly payments cover only interest.

3. Sharia-Compliant Mortgage – No interest; bank owns property & resells over time.

9.2 Stamp Duty Land Tax (SDLT) & Land Transaction Tax (LTT)

(England - SDLT Rates)

• 0% – Up to £250,000.

• 5% – £250,001 to £925,000.

• 10% – £925,001 to £1.5m.

• 12% – Over £1.5m.

(Wales - LTT Rates)

• 0% – Up to £225,000.

• 6% – £225,001 to £400,000.

• 7.5% – £400,001 to £750,000.

10. Planning & Building Regulations

10.1 Planning Permission

• Required for new buildings, major alterations, change of use.

• General Permitted Development Order (GPDO) allows some minor developments automatically.

10.2 Listed Buildings & Conservation Areas

• Listed buildings require special consent for alterations.

• Conservation areas have additional planning restrictions.

10.3 Enforcement & Penalties

• Unauthorised development can be enforced within 4 or 10 years, depending on the breach.

• Failure to comply can result in demolition orders, fines, or legal action.

11. Summary & Checklist for Property Solicitors

Key Responsibilities

✅ Investigate title & conduct searches.
✅ Draft & review contracts.
✅ Ensure financing & mortgage compliance.
✅ Advise clients on legal and professional conduct.
✅ Handle tax obligations (SDLT/LTT).
✅ Ensure compliance with planning laws.

Professional Conduct Issues in Property Transactions

1. Introduction to Professional Conduct in Property Transactions

• Solicitors must obtain clear client instructions at the outset.

• Failure to clarify instructions may result in:

  • Delays

  • Increased costs

  • Client dissatisfaction

  • Possible negligence claims

• Key Questions Solicitors Must Ask:

  1. Can we act for this client?

  2. Can we carry out the client’s instructions?

• The Solicitors Regulation Authority (SRA) Code of Conduct governs legal practice.

  • Breaches can lead to disciplinary actions and negligence claims.

  • The SRA Principles require solicitors to:

    • Act with integrity.

    • Act in the client’s best interests.

    • Avoid conflicts of interest.

    • Maintain client confidentiality.

2. Conflict of Interest in Property Transactions

• Governed by Paragraph 6 of the SRA Code of Conduct.

• Solicitors must not act for more than one party if there is a conflict of interest or a significant risk of one.

• Exceptions apply, but strict conditions must be met.

2.1 Acting for Both Seller and Buyer

• Often requested to save costs and time.

• Risk: Disputes may arise over:

  • Searches & Enquiries (e.g., hidden property issues).

  • Negotiation on price (e.g., buyer wants price reduction due to defects).

• General Rule: Acting for both seller and buyer is not permitted.

• Exception (Paragraph 6.2(a)): Solicitor may act if:

  • Clients have a substantially common interest.

  • Proper safeguards are in place (e.g., informed written consent).

• Law Society Clarification:

  • This exception does NOT apply to property purchases.

  • Buyers and sellers always have different interests (one is selling, the other is buying).

2.2 Acting for Joint Buyers

• Allowed if:

  • No conflict of interest exists or is likely to arise.

  • The solicitor advises on co-ownership options:

    • Joint Tenants (equal ownership, automatic inheritance).

    • Tenants in Common (distinct shares, no automatic inheritance).

2.3 Acting for Borrower and Lender

• Common in property transactions.

• Permitted unless a conflict exists or is likely to arise (Paragraph 6.2).

• High Risk of Conflict in Certain Situations:

  • Non-standard mortgages (e.g., complex lending terms).

  • Failure to use the approved certificate of title.

Lender Requirements:

• Borrower’s solicitor must investigate the property title.

• Lender’s solicitor may ask the borrower’s solicitor to handle the title check to save time/costs.

2.4 Acting for Joint Borrowers

• Permitted if no conflict exists.

• Risks arise in cases of undue influence (e.g., one party coerced into securing a loan).

Example: Husband & Wife Mortgage

• A married couple jointly owns a property.

• The husband takes out a business loan secured on the home.

• If the business fails, the wife could challenge the mortgage on grounds of undue influence.

Etridge Guidelines (House of Lords, 2001)

• Solicitors must take extra steps to protect potentially coerced clients.

• Lenders must provide full loan details before legal advice is given.

• Solicitor’s Duties:

  1. Explain why they are involved.

  2. Confirm the lender will rely on the solicitor's advice.

  3. Meet with the client alone (without their partner).

  4. Explain the transaction risks clearly.

  5. Confirm if the client still wishes to proceed.

  6. Not provide confirmation to the lender unless expressly instructed.

If undue influence is obvious, the solicitor must refuse to act.

3. Contract Races in Property Transactions

• Definition: Seller sends contracts to multiple buyers, with the first to exchange securing the deal.

• Allowed if buyers are informed.

• Key Rule: Solicitors must not mislead buyers.

• If a seller refuses to disclose the race, the solicitor must withdraw from acting.

4. Undertakings in Property Transactions

• Undertaking: A binding promise made by a solicitor to perform an action.

• Governed by Paragraph 1.3 of the SRA Code.

• Failure to comply is professional misconduct.

Example: Buyer’s Deposit Delay

Scenario:

• A solicitor acts for a buyer.

• The seller insists on immediate exchange of contracts.

• Buyer’s deposit is delayed due to a bank issue.

• Buyer instructs solicitor to undertake that funds will be transferred tomorrow.

Key Legal Considerations:

• Solicitor must not give an unconditional undertaking (since payment is outside their control).

• If the buyer’s funds do not arrive, the solicitor would be personally liable.

• Solution: The solicitor should only undertake to transfer funds IF received from the buyer.

5. Money Laundering, Fraud & Confidentiality Risks

5.1 Mortgage & Property Fraud

• Common Risks:

  • Mortgage fraud (false financial information to secure loans).

  • Property fraud (fake seller attempts to transfer title illegally).

• Solicitors must conduct identity checks and due diligence.

5.2 Confidentiality and Disclosure (Paragraph 6.3)

• Solicitors must maintain client confidentiality.

• Exception: If a duty of disclosure arises (e.g., fraud risks).

• Ethical Dilemma: If acting for both lender & borrower:

  • Borrower reveals undisclosed debts.

  • Lender expects full disclosure.

  • Solicitor must either disclose or withdraw from acting.

6. Key Takeaways & Practical Considerations

7. Summary: Professional Conduct Best Practices for Property Solicitors

1. Clarify client instructions early.

2. Ensure compliance with the SRA Code of Conduct.

3. Avoid conflicts of interest unless exceptions apply.

4. Follow the Etridge guidelines in undue influence cases.

5. Disclose contract races to all buyers.

6. Never give undertakings beyond your control.

7. Conduct thorough money laundering checks.

8. Maintain client confidentiality unless legally obligated to disclose.

By following these professional conduct principles, solicitors can ensure compliance, ethical integrity, and client protection in property transactions. 🚀

Sources of Finance for a Property Transaction

1. Importance of Finance in Property Transactions

• The availability of finance is a crucial factor in a property transaction.

• Clients may not be aware of all the costs involved, including:

  • Legal fees

  • Stamp Duty Land Tax (SDLT) / Land Transaction Tax (LTT)

  • Land Registry fees

  • Search fees

• Solicitor’s Role:

  • Provide clients with clear cost estimates at the start and throughout the transaction.

  • Send a letter of engagement outlining all costings.

  • Explain potential changes to fees.

  • Inform clients of additional payments they may be responsible for.

2. Common Sources of Finance for Property Transactions

Clients may finance property purchases through:

1. Personal funds – Paying the full price upfront.

2. Mortgages and loans – Most common for both residential and commercial purchases.

3. Trust funds or family loans – Private financing, often requiring separate legal advice.

4. Government-backed schemes – Available for first-time buyers or affordable housing.

3. Residential vs. Commercial Property Finance

4. Solicitor's Role in Advising on Finance

• Solicitors must be careful when advising on finance.

• Restrictions under the Financial Services and Markets Act 2000 (FSMA 2000):

  • Solicitors cannot advise on regulated financial products unless authorised by the FCA.

  • Solicitors can give generic financial advice (e.g., explaining mortgage types).

  • If specific mortgage advice is required, the client must be referred to an FCA-authorised advisor.

Solicitor's Obligations in Financial Advice

• S.327 FSMA Exemption: Solicitors can advise on mortgages if:

  • The advice is incidental to legal work.

  • The firm complies with SRA Financial Services Rules.

5. Types of Mortgage Loans

5.1 Repayment Mortgage

• Monthly payments consist of:

  1. Principal repayment – Reducing the loan amount.

  2. Interest payments – Charged on the outstanding balance.

• Advantages:

  • Guaranteed full repayment at the end of the loan term.

  • Lower overall interest paid compared to interest-only loans.

• Disadvantages:

  • Higher monthly payments.

  • Less flexibility in cash flow management.

Example Calculation:

• Loan: £200,000

• Term: 25 years

• Interest rate: 5%

• Monthly Payment: £1,170 (approx.)

• Total Repayment Over Term: £351,500

5.2 Interest-Only Mortgage

• Monthly payments only cover interest.

• At the end of the loan term, the borrower must repay the capital using:

  • Savings or investments.

  • Selling the property.

  • Refinancing.

• Advantages:

  • Lower monthly payments.

  • More flexibility for investors or landlords.

• Disadvantages:

  • Entire capital amount remains due at the end.

  • Higher risk if property value falls.

Example Calculation:

• Loan: £200,000

• Term: 25 years

• Interest rate: 5%

• Monthly Payment: £830 (approx.)

• Total Repayment Over Term: £250,000 (interest only, capital still owed)

5.3 Mixed (Part-Interest, Part-Repayment) Mortgages

• Combines repayment and interest-only components.

• Allows borrowers to lower monthly payments while gradually repaying capital.

Example:

• £100,000 on interest-only (lowers monthly cost).

• £100,000 on repayment mortgage (ensures some capital is paid).

5.4 Sharia-Compliant Mortgages

For Muslim clients who follow Islamic finance principles (no interest payments).

• Murabaha (Cost-plus financing):

  • The bank buys the property and sells it to the client at a profit.

  • The client pays the purchase price in installments.

• Ijara (Lease-to-own):

  • The bank buys the property and leases it to the client.

  • At the end of the lease, ownership transfers to the client.

Advantages:

• Complies with Islamic finance rules.

• Fixed costs with no interest fluctuations.

Disadvantages:

• Higher overall costs than conventional mortgages.

• Limited availability in the UK.

6. Commercial Property Finance

More complex than residential finance.

• Common Types:

  1. Commercial Mortgages – Used to buy offices, shops, warehouses.

  2. Bridging Loans – Short-term finance for quick purchases.

  3. Development Finance – Used for property construction or renovation.

  4. Buy-to-Let Mortgages – For landlords investing in rental properties.

Key Features of Commercial Mortgages:

7. Government Schemes for Residential Buyers

• Help to Buy Equity Loan:

  • Available for new-build properties.

  • Government lends up to 20% of the purchase price (40% in London).

  • Buyer needs at least a 5% deposit.

  • Interest-free for the first 5 years.

• Shared Ownership:

  • Buyer purchases a share (25-75%) of the property.

  • Pays rent on the remaining share.

  • Allows gradual "staircasing" (buying more shares over time).

• First Homes Scheme:

  • 30%+ discount on new-build homes for first-time buyers.

  • Must be a key worker, local resident, or essential worker.

8. Summary: Key Considerations for Property Finance

Final Thought: Solicitor's Role

• Ensure the client understands their financial obligations.

• Refer the client to FCA-authorised advisors for financial product recommendations.

• Protect the client's interests by conducting thorough due diligence on lending agreements.

1. Introduction to Property Taxation

• Property taxation depends on whether the client is the buyer or seller and whether the property is residential or commercial.

• Taxes involved include:

  • Stamp Duty Land Tax (SDLT) or Land Transaction Tax (LTT) (for buyers)

  • Capital Gains Tax (CGT) (for sellers, if applicable)

  • Value Added Tax (VAT) (mainly for commercial property transactions)

2. Stamp Duty Land Tax (SDLT) in England & Land Transaction Tax (LTT) in Wales

2.1 What is SDLT/LTT?

• SDLT and LTT are transaction taxes charged on the purchase of land and buildings.

• SDLT applies in England (since 1 Dec 2003).

• LTT applies in Wales (since 1 Apr 2018) and differs slightly from SDLT.

2.2 SDLT for Residential Property (England)

• First-time buyers:

  • 0% on the first £425,000 (if property ≤ £625,000).

  • 5% on £425,001 – £625,000.

  • No relief above £625,000.

• Example: SDLT on a £275,000 property (Second-time buyer):

  • 0% on £250,000.

  • 5% on £25,000 = £1,250.

• SDLT Surcharge:

  • 3% additional charge on second homes/buy-to-let properties.

  • 2% additional charge for non-UK residents.

• SDLT Exemption for Chattels:

  • SDLT applies to land and fixtures, not chattels (e.g., carpets, curtains).

  • Buyers may apportion purchase price to chattels (if fair market value) to reduce SDLT.

• Example: SDLT Apportionment for Priya:

  • House Price: £575,000.

  • Chattels: £10,250.

  • Reducing purchase price to £564,750 saves £513 SDLT.

  • Must ensure chattels valuation is fair to avoid HMRC fraud risk.

2.3 SDLT for Non-Residential & Mixed-Use Property (England)

• Example: SDLT on a £275,000 commercial property:

  • 0% on £150,000.

  • 2% on £100,000 = £2,000.

  • 5% on £25,000 = £1,250.

  • Total SDLT: £3,250.

• If VAT is applied (e.g., on an opted-to-tax property), SDLT is calculated on the VAT-inclusive price.

2.4 LTT for Residential Property (Wales)

• No first-time buyer relief in Wales.

• Example: LTT on a £275,000 home:

  • 0% on £225,000.

  • 6% on £50,000 = £3,000.

2.5 LTT for Non-Residential & Mixed-Use Property (Wales)

• Example: LTT on a £275,000 commercial property:

  • 0% on £225,000.

  • 1% on £25,000 = £250.

  • 5% on £25,000 = £1,250.

  • Total LTT: £1,500.

2.6 Payment of SDLT/LTT

• SDLT: Paid within 14 days of completion to HMRC.

• LTT: Paid within 30 days of completion to Welsh Revenue Authority.

• Late payments incur penalties and interest.

• SDLT/LTT must be paid before Land Registry registration.

3. Capital Gains Tax (CGT)

3.1 What is CGT?

• Tax on profit (gain) from selling property (not on sale price).

• CGT applies to second homes & investment properties.

• Exemptions: Private residence relief (PRR) for main homes.

3.2 CGT Calculation

Priya’s CGT Considerations:

• Did she live there continuously?

• Did she own multiple homes?

• Was her garden >0.5 hectares?

• Did she use part of the house for business?

4. Value Added Tax (VAT) on Property

4.1 Basic VAT Principles

• VAT is an indirect tax on taxable supplies.

• Standard Rate: 20% (e.g., professional services).

• Reduced Rate: 5% (e.g., certain renovations).

• Zero-Rated: 0% (e.g., new residential buildings).

• Exempt: No VAT (e.g., most land sales, old buildings).

4.2 VAT on Commercial Property

4.3 Opting to Tax Commercial Property

• Why opt to tax? To recover VAT on renovation costs.

• Problem: Buyers (e.g., insurance firms) may not reclaim VAT, making purchase more expensive.

Example: Bankridge Estates Ltd

• Purchased old warehouse and renovated it.

• Wants to sell to Fidelity Insurance plc.

• If they opt to tax:

  • Can reclaim VAT on refurbishment.

  • Must charge VAT on sale price.

  • Buyer (insurance company) cannot recover VAT → might lower their offer.

4.4 SDLT/LTT on VAT-inclusive Price

• If a seller opts to tax, VAT is included in SDLT/LTT calculation.

• Buyer pays tax on tax.

5. Key Takeaways

1. SDLT/LTT applies to property transactions.

2. Higher rates for additional properties & non-UK buyers.

3. CGT applies to second homes, but PRR exempts main residences.

4. VAT applies to new commercial properties; old ones can be opted-in.

5. Buyers must be cautious about VAT & SDLT/LTT on VAT-inclusive prices.

Solicitor’s Role: Ensure clients understand tax liabilities, payment deadlines, and tax-saving strategies in property transactions.

Core Principles of Planning Law

1. Overview of Planning Law

• Planning law regulates the construction, alteration, and use of land and buildings.

• Buyers must check:

  • Whether the property has valid planning permission.

  • Whether it complies with planning conditions.

  • If future alterations or use changes will require permission.

• Planning breaches run with the land, so buyers inherit liability.

2. Statutory Definition of Development

• Section 57(1), Town and Country Planning Act 1990 (TCPA 1990): Planning permission is required for any development.

• Section 55, TCPA 1990: Defines development as:

  • Operational development (Building, Engineering, Mining, or Other Operations) – "BEMO".

  • Material change of use of land or buildings.

3. Activities That Do Not Require Planning Permission

3.1 Exclusions from "Development" (Section 55(2), TCPA 1990)

• Internal building work (e.g., decorating, plumbing, reconfiguring rooms).

• Changes of use within the same Use Class (Use Classes Order 1987, as amended).

• Certain minor works (Permitted Development Rights under GPDO 2015 (England) or GPDO 1995 (Wales)).

3.2 Use Classes

• Sui Generis Uses:

  • Uses not classified within a specific use class (e.g., pubs, nightclubs, casinos, fuel stations).

  • All changes to/from sui generis require planning permission.

4. Planning Permission

• Planning permission "runs with the land" (applies to future owners).

• Typical validity:

  • England: 3 years from the grant.

  • Wales: 5 years from the grant.

• Local Planning Authorities (LPAs) can issue a "Completion Notice" if the development is unreasonably delayed.

5. Situations Where Express Planning Permission is Not Required

• General Permitted Development Order (GPDO)

  • GPDO automatically grants planning permission for specific works (e.g., small extensions, loft conversions).

  • England: GPDO 2015 | Wales: GPDO 1995.

• Article 4 Directions:

  • LPAs can remove GPDO rights in sensitive areas (e.g., conservation areas).

6. Enforcement of Planning Control

6.1 Enforcement Actions by Local Planning Authorities (LPAs)

• LPAs can enter land or issue a Planning Contravention Notice for investigation.

• Types of enforcement action:

  Enforcement Action	Description
  Enforcement Notice	Requires the owner to correct a breach.
  Stop Notice	Stops unlawful use/development immediately.
  Temporary Stop Notice	Emergency stop notice (28 days).
  Breach of Condition Notice	Used when conditions in planning permission are breached.
  Injunction	Court order to prevent unauthorised works.

6.2 Time Limits for Enforcement

• 4 years:

  • Operational development (e.g., unauthorised buildings).

  • Change of use to a single dwelling.

• 10 years:

  • Other breaches (e.g., change of use from retail to restaurant).

• If time limit expires, the development is immune from enforcement.

7. Building Regulations vs. Planning Permission

7.1 What are Building Regulations?

• Separate from planning permission.

• Ensures health, safety, energy efficiency, and structural integrity.

• Applies to:

  • Construction of new buildings.

  • Extensions or major renovations.

  • Electrical, plumbing, and fire safety installations.

7.2 Approval Process

1. Apply to LPA → Building Control Officer inspects work.

2. Approval issued via compliance certificate.

3. Self-certification schemes exist for minor works.

7.3 Enforcement

• LPA can prosecute within 2 years for non-compliance.

• LPA can issue an enforcement notice within 1 year.

• Mortgage lenders may refuse financing without approval.

8. Special Planning Controls

8.1 Listed Buildings

• Buildings of special architectural/historic interest.

• Grades:

  • Grade I – Buildings of exceptional interest.

  • Grade II* – Particularly important buildings.

  • Grade II – Buildings of special interest.

• Restrictions:

  • Demolition or alteration requires Listed Building Consent.

  • GPDO does not apply to listed buildings.

8.2 Conservation Areas

• Areas designated for architectural/historic preservation.

• Extra restrictions:

  • Minor alterations require permission.

  • Demolition requires LPA consent.

  • Tree work requires 6-week notification.

9. Solicitor’s Role in Planning Law

9.1 Key Due Diligence Questions

1. Does the property have planning permission?

2. Is the current use of the property lawful?

3. Are there any planning conditions affecting use?

4. Are there existing planning breaches?

5. Have all required building regulations approvals been obtained?

6. Is the property listed or in a conservation area?

9.2 Pre-Contract Searches & Enquiries

• Local Authority Search (CON29) – Checks planning permissions & enforcement notices.

• Enquiries to Seller – Confirms building work history.

• Inspection of Property – Identifies potential breaches.

10. Case Study Examples

Case 1: Illegal Development

Scenario:

• Client Sheila built a bungalow in her garden 2.5 years ago without planning permission.

• Now wants to sell.

• Buyer requests planning permission documents.

Analysis:

• Building a bungalow is "development" under s55 TCPA 1990.

• No GPDO exemption applies.

• Enforcement time limit (4 years) has not expired → LPA can issue an Enforcement Notice.

• Potential consequences:

  • Buyer inherits liability for planning breach.

  • LPA may order demolition.

Case 2: Home Extensions & Internal Alterations

Scenario:

• Buyer notices the seller built a conservatory.

• Buyer wants to do internal alterations.

Analysis:

• Conservatory:

  • May fall under GPDO (permitted development).

  • Check if size & position comply.

  • Check for Article 4 Direction (removal of GPDO rights).

• Internal Alterations:

  • Do not require planning permission.

  • Require building regulations approval.

11. Taking Instructions Checklist

12. Key Takeaways

1. Planning permission is required for "development" (s55 TCPA 1990).

2. Some works are permitted under GPDO, but Article 4 Directions can remove this.

3. LPAs enforce planning breaches (4/10-year time limits apply).

4. Building regulations are separate from planning permission.

5. Solicitors must check planning permissions, building regulations, & local authority records.