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Property Law > 3. Pre-contract searches and enquiries undertaken when acquiring a freehold/leasehold property > Flashcards

3. Pre-contract searches and enquiries undertaken when acquiring a freehold/leasehold property Flashcards

1
Q

Who carries out Pre-Contract Searches and Enquiries?

A

They are usually carried out by the BS under the principle of caveat emptor, to ascertain as much information from the seller and 3P.

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2
Q

Are sellers under a duty to disclose?

A

They may be liable in misrepresentation if they give misleading replies to enquries.

They are under no duty to disclose adverse matters, save for specified incumbrances affecting the title.

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3
Q

When would you consider Enquiries before Contract?

A

Always Search

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4
Q

When would you consider Personal Inspection/Survey?

A

Always Search

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5
Q

When would you consider a Local Search?

A

Always Search

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6
Q

When would you consider a water/drainage search?

A

Always Search

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7
Q

When would you consider a Environmental Search?

A

Always Search

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8
Q

When would you consider a Flood Search?

A

Always Search

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9
Q

When would you consider a Chancel Repair Liability Search?

A

Often Always Search.

Especially where no prior disposal for value since 13 October 2013.

Insurance may be more cost effective.

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10
Q

When would you consider a Mining Search?

A

In mining areas or where mines and minerals are expected and reserved from the title.

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11
Q

When would you consider a Canal and River Trust/Environment Agency/Natural Resources Wales Search?

A

Where the property is near/adjacent to a river or a canal.

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12
Q

When would you consider a Commons Registration Search?

A

Where open land is nearby, or property is constructed on a greenfield site.

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13
Q

When would you consider a Highways Search?

A

Where there is a potential gap between the property and the highway.

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14
Q

When would you consider a Railways Search?

A

Where the property is near/adjacent to a railway line and development works are proposed.

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15
Q

When would you consider a Index Map Search?

A

Where the title is apparently unregistered or where mines and minerals are excepted and reserved from the title.

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16
Q

When would you consider a Company Search?

A

Where the seller is a company, or title unregistered and the epitome of title reveals company estate owners.

Also, where the buyer is a company and a lender is involved.

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17
Q

When would you consider a Land Charges Search?

A

Where the title is unregistered.

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18
Q

When would you consider a Bankruptcy/Insolvency search?

A

Where a lender is involved.

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19
Q

What are the Always Searches?

A

F - Flood Search
E - Enquiries Before Contract
E - Environmental Search
L - Local Search

D - Drainage/Water Search
I - Inspection/Survey
C - Chancel Repair Liability

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20
Q

What are Enquiries Before Contract?

A

Enquiries raised by BS to SS that concern information that should be known by the seller.

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21
Q

What Enquiries Before Contract are made for Residential Property?

A

Standard protocol forms will be used for solicitors under the LSCP:

  • TA6: Property Information Form
    Boundaries, fences, complaints, notices, proposals, warranties, flooding, parking etc….
  • TA10: Fitting and Contents Form
    Details fixtures that are to be removed and fittings that are to be included in the sale.
  • TA7: Leasehold information form (also include LPE1 and LPE2)
  • TA8: New Home information form.
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22
Q

What Enquiries Before Contract are made for Commercial Property?

A

More detailed enquires inline with the Commercial Property Standard Enquiries (CPSE):

CPSE 1: General enquiries from all commercial property transactions.

CPSE 2: Additional enquiries form property subject to commercial tenancies.

CPSE 3: Additional enquiries on the grant of a new lease.

CPSE 4: Additional enquiries on the assignment of a lease.

CPSE 7: A shorter more straightforward form in comparison to CPSE 1.

These are more detailed that standard residential enquiries and include questions on VAT.

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23
Q

What is Personal Inspection and Survey?

A

A personal inspection of the property should be done by the BUYER to ascertain the physical boundary and condition of the property as checking the boundaries, and checking for 3P rights.

Buyer should be advised whether to comission a survey of the property before exchange.

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24
Q

What is a Local Search?

A

Submitted to the local authority together with a plan of the property and the fee.

2 Parts:

LLC1: LOCAL LAND CHARGES SEARCH

CON29: ENQUIRIES OF LOCAL AUTHORITY

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25
Q

What does LLC1 Contain?

A

12 parts to land charges register which will reveal matters like:

  • Planning permissions that have been granted
  • Planning enforcement or stop notices
  • Article 4 directions (restricting the General Permitted Development Order)
  • Tree preservation orders
  • Smoke control orders
  • Financial charges such as road-making charges
  • Conservation areas
  • Listed building status
  • Smoke control orders.
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26
Q

What does the CON29 Contain?

A

Will reveal information about the property and its immediate surroundings:
- Planning consents, refusals and completion notices (not just granted, but also applications pending)
- Building regulations (informs whether approvals or completion certificates obtained for works carried out)
- Roads and public rights of way (footpaths) (any adoption plans)
- Environmental notices.

Can be followed up by the CON29O (optional).

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27
Q

What does the CON29O Contain?

A

These are usually only ticked in specific circumstances (relevant to property), such as:
- The commons search (enquiry 22)
- Common land and town or village green (land designated for communal use is very restricted)
- Road proposals by private bodies
- Areas of outstanding natural beauty and national parks
- Pipelines
- Noise abatement zones

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28
Q

What is a Drainage/Water Search? CON29DW

A

Questions about drainage and water specific to the property are dealt with by the relevant water service company for the area.

The search checks matters such as whether foul and surface water from the property drain to a public sewer, and whether the property is connected to a mains water supply.

Form CON29DW enquiries (residential property) or CommercialDW enquiries (commercial property) are submitted to the relevant water company.

If the drains and sewers are not adopted, the buyer will be responsible for their maintenance.

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29
Q

What is an Environmental (Desktop) Search?

A

An environmental search should always be considered; an owner may be liable for the costs of cleaning up contaminated land, even if not responsible for the contamination.

Some information is given in the local search, but only whether notices have been served; desktop search is based on historical records and will indicate if the property has been used for potentially contaminative land uses (for example, industrial).

Likelihood of flooding and susceptibility to natural subsidence, and industrial land uses within 250 metres of the property.

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30
Q

What are the provisions of the Environmental Protection Act 1990?

A

A buyer needs to informed that under the act, the local authority has the power to carry out investigations and designate land as contaminated, requiring it to be remediated.

Principle is that the ‘polluter pays’ for the remediation of the contamination they case.

If they cannot be found, liability may fall on the owner/occupier.

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31
Q

What is a Flood Search?

A

Made routine is most transations and reveals whether the property is, or is likely to be affected by river/coast/surface water or ground water flooding.

A government scheme (Flood Re) provides assurance that insurance will be available for owners of residential properties, but it does not cover:
- Properties built after 01 January 2009.
- Buy-to-let.
- Commercial Properties.
- Most Leasehold Blocks.

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32
Q

What is a Chancel Repair Search?

A

Chancel repair liability affects properties in parishes where there is a pre-Reformation church.
- Responsibility for repair of the church roof was shared between the church and the parishioners; very expensive if the parish church claims this.
- This search is therefore usually carried out as standard; indemnity insurance is readily available to cover the risk.

33
Q

What are the Depends Searches?

A

C - Company
H - Highway
I - Index
L - Land Charges
M - Mining
E - Environmental Phase 1/2
R - Railwys
I - Insolvency/Bankruptcy
C - Commons

34
Q

What is a Mining Search? CON29M

A

Reveals past and present mining activity within the proximity of the property, including underground work and mining shafts.

May be specific searches dependant on the area:

  • Tin
    Cornwall, Devon and Somerset.
  • Cornwall Mining Consultants.
  • Clay
    Cornwall, Devon and Dorset.
  • Kaolin and Ball Clay Association.
  • Limestone
    Dudley, Sandwell, Walsall, Wolverhamption, Telford.
  • Relevant local authority.
  • Brine/Sale
    Cheshire and Greater Manchester.
  • Cheshire Salt Search.
35
Q

What is an Environmental Phase Survey?

A

Environmental Phase 1 Survey:
More detailed than the standard desktop environmental search and includes a site inspection

Environmental Phase 2 Survey:
Taken where Phase 1 study indicates risk of contamination. Soil/water samples are tested to indicate whether there is contamination or not

36
Q

What is a Commons Search? CON29O

A

If the property has been constructed recently on a greenfield site, on the edge of an ubran area of has open space adjacent or within the vicinity of it a commons registration search is essential.

Reveals whether the property is designated as village green which the public have access to use and rights of use.

37
Q

What is a Highways Search?

A

Where there is any doubt from CON29, or for most commercial properties, a highways search is needed.

Shows the exact boundary between private land and public highway with reference to a plan (map).

For buyer to ensure that property abuts public highway or any right of way that land has benefit of; so land can be accessed.

If the results show that the property does not immediately abut the highway - will be necessary to ensure that there are appropriate rights of access.

38
Q

What is a Railways Search?

A

Where railway passes near property/is within proximity of proposed railway - no standard railway search; specific enquiries may be made to Network Rail or relevant company (London Underground, HS2) about issues like access rights across property.

39
Q

What is an Index Map Search (SIM)?

A

Search to ascertain details of any registered title(s) affecting the property, any pending applications for registration and cautions against registration.

40
Q

What are Land Charges Searches?

A

Used if the title to property is unregistered.

Land Charges Searches must be made against all relevent estate owners.

Using a K15 form to identify the charges that could be binding on a buyer.

41
Q

What is a company search?

A

Checks whether the company is in existence, subject to any insolvency procedures, or granted any fixed or floating charges.

If the seller is a company, a company search must be made at Companies House.

If URL the search should also be made against corporate owners referred to in the epitome of title.

If acting for a lender, a company search should be made against the buyer.

42
Q

What is a bankruptcy/insolvency search?

A

Usually a pre-completion search, but may also be taken at the pre-exchange stage and then repeated.

Needed when the buyer is borrowing to fund the acquisition.

43
Q

How does Chancel Repair Liability work on a purhcase for valueable consideration?

A

If there is a notice in the charges register or a caution against first registration in the deeds:
- Chancel repair will be binding, but can be contested if notice/caution was entered after a disposition for value since 13 Oct 2013.

If not,
If there has been a disposition of value on or after 13 Oct 2013 then possibility of notice/caution which needs to be contested.

If no disposition or caution/notice then there’s a possibility of of being entered before reigstration which needs to be contested.

44
Q

What enquiries should be made for Planning Permission and Building Regulation approvals?

A

Buyer’s Solicitor should seek copies of the permissions and the associated certificates of compliance/completion.

Additional enquiries should be made as to whether permission have been implemented, works completed and planning conditions complied with.

Enquire as to any notices served or any action is anticipated.

Buyer’s solicitor should consider planning permission for proposed works and change of use.

45
Q

What is the risk with Adoption of Roads?

A

If the property does not abut a highway maintainable at public expense, it should be ascertaiend whether the property has suitable ancilliary rights in the documents.

The risk is that the local authority may need to the adopt the road in the future, and the owners may be liable for these costs.

46
Q

Where is Adoption of Roads a common issue?

A

New build properties.

Developer should agree in. the contract to make roads up to adoption without expense from the buyer.

If the roads are not to remain private, then ther should be an agreement under s38 Highways Act between developer and local authority, supported by a bond in case of insolvency.

In absence, a mortgage lender may seek to make a retention from the mortgage advance to cover the potential cost.

47
Q

What does the UK Finance Mortgage Lenders Handbook ch4 provide?

A

An agreement and a bond should be used to cover the adoption of roads/sewers or other arrangements.

More common for roads on new estates to remain private, and be managed by a company via service charge.

48
Q

What is the risk with Adoption of Sewers?

A

If foul and surface water do not drain to public sewers, then enquiries should be made about alternative arrangments (priv septic tank?)

49
Q

Where is Adoption of Sewers a common issue?

A

Newbuild properties.

Should be agreed by developer in contract to be at an adoptable standard without cost to the buyer.

Agreement between developer and local authority in place under s 104 of Water Industry Act 1991, supported by a bond to cover obligations in insolvency.

In absence, a mortgage lender may seek to make a retention from the mortgage advance to cover the potential cost.

50
Q

What is a TPO?

A

Tree Protection Order.

Details of the orders and the protected trees should be ascertained. Buyer should be made aware that it is a criminal offence to lop or fell protected trees.

51
Q

What is a Smoke Control order?

A

Very common and uncontroversial type of Local Land Charge, which is normally no concern for the buyer.

Menas that only smokeless or other authorised fumes may be combusted on the property.

52
Q

What happens with listed buildings and conservation areas?

A

Means that the development of the property may be limited and it will be more difficult to make changes that usually would be relatively straight forward to make.

53
Q

What happens if there are other non-owning Occupiers?

A

Any non-owning occupiers may have a benefical interest in property, or other statutory rights.

Should be required to sign a waiver/release of their rights and an agreement to vacate on completion.

Usually dealt with as a special condition to the contract.

54
Q

What is the National Land Information Service? (NLS)

A

Collaboration between local authorities of E + W, HM LR, Water Companies, CH, the Environment Agency and Coal Authority etc..

Brings all the information held by them together to make the search process easier and more cost effective.

Information can be accessed through service providers known as licensed channels.

55
Q

Is Planning Permission required for Development?

A

Generally yes.

56
Q

Is Building Regulations approval needed for most building work?

A

Generally yes.

57
Q

What is Development?

A

The carrying out of building, engineering, mining or other operations in, on, over or un der land, or the making of any material change in the yse of any buildings or other land.

s55 Town and Country Planning Act 1990

58
Q

What should the buyer’s solicitor check for with devlopment/building work?

A

Check whether all permissions and approvals are in place, whether any conditions are attached and whether they have been complied with.

Check if listed, or conservation area.

Must be able to advise on the need for permissions and approvals for future works or changes of use.

59
Q

What are the two key areas that development covers?

A
  • The carrying on of building works (operational development), such as demolition, rebuilding, structural alterations or additions, and operations undetaken by a person carrying on business as a builder.
  • Material changes of use.
60
Q

What matters DO NOT constitute development?

i.e are excluded from the defintion.

A

These usually do not require planning permission.

  • Carrying out work for the maintenance, improvment or other alteration which only affect the interior, do not materially affect external appearance. (There is an exception for large mezzanine floors).
  • Use of any buildings/land in the immediate surrounding of a dwelling house incidental to the enjoyment of a dwelling house.
  • Change of primary use within the same class ( a non-material change of use).
61
Q

What are the main Use Classes?

A
  • B - General Industrial, Storage or Distribution.
  • C - Residential (hotels, houses, house in MO).
  • E - Commercial, Business and Service (shops (not hot food), financial, professional, health services etc..
  • F - Schools, places of learning/worship, community facilities.
  • Sui Generis
62
Q

What does Sui Generis Mean?

A

Of its own kind.

Uses such as pubs, bars, night clubs, takeaways, bingo halls, cinemas, concert halls, music venues etc..

Always require express planning permission.

63
Q

What matters DO NOT require express planning permission?

Generally permitted under General Permitted Devlopment Order 2015 (GDPO)

A

Constiute devlopment, but do not need planning permission.

  • Small extentions/improvments within the curtilage of a dwelling house (porch, extension, conservetory etc…)
  • Minor operations (painting exterior, erection of fencing subject to height restrictions).
  • Certain changed between use classes.
64
Q

What is the effect of an Article 4 Direction on a GDPO?

A

Revokes the GDPO in whole or part.

Express planning permission will be required.

65
Q

Where is a Article 4 Direction found?

A

Will be revealed in the Local Search Results?

66
Q

What is a planning contravention notice?

A

Request for information about operations or activities on the property and potential breaches of planning control.

Is an offence to fail to respond with 21 days, or to provide false, misleading information in response.

67
Q

What can the local authority do if they are satisfied there has been a breach of planning control?

A

They can issue a
- Completion notice,
- Enforcement notice,
- Stop notice,
- Breach of condition notice, or
- Request an injuction.

68
Q

What is a completion notice?

A

Planning permission ususally has a date by which it should be implemented.

If LA are concerned that development has stalled, and will not be completed within a reasonable time, it may serve a completion notice.

Requires completion of development in a permitted time, and if not, permission will lapse.

69
Q

What is an enforcement notice?

A

Where LA is satisfied that there has been a breach of planning control.

Notice should specify the breach and what steps are required to remedy/what activities are to cease.

Must be served on the owner/occupier and anyone in with an interest in the property.

Take effect not less than 28 days after issue.

Criminal offence to fail to comply, which a find will be payable - right of appeal may be available.

70
Q

What is a stop notice?

A

May only be issued following service of an enforcement notice.

Requires activities alleged to be in breach to cease, pending the enforcement notice’s effect or appeal.

Criminal offence to not comply, fine may be payable.

No right of appeal.
Proprietary of decision to issue notice may be challenged by JR.

71
Q

What is a breach of condition notice?

A

Issued in event of breach of conditions attached to the planning permission.

Requires compliance with the conditions within a specified period.

Criminal offence to not comply, fine may be payable.

No right of appeal.
Proprietary of decision to issue notice may be challenged by JR.

72
Q

What are the time limits for enforcment in event of breach of planning permission?

A

England:
- 10 Year Rule.
Always ten years, unless deliberate concealment then no limit applies.

Wales:
- Building Works: 4 Years from substantial completion.
- Change of use: 4 Years if Private Home, 10 Years for anything else/
- Condition Breach: 10 Years.

73
Q

What is Building Regulations Approval?

A

Seperate and distinct from Planning Permission.

May be required for works that DO NOT constitute development, such as interior works, or small extensions where PP is not required.

Required for works of construction or significant alterations or extensions to buildings in order to ensure they meet standards are to health and safety, design, permitted materisl, methods of construction.

eg: usually required for garage conversions, although PP not necessary.

74
Q

What works require building regulations approval?

A

Electrical installations, plumbing installations, replacement windows and doors, heating systems and replacement roofs.

75
Q

How does building regultions compliance work?

A

Involves and intial approval being granted to proposed plans, with building control officer inspecting the works and issuing a certificate of compliance when the works complete.

76
Q

What are the time limits for enforcment in event of breach of building regulations?

A

The ten year rule applies again.

Sanction is unlimited fine and/or 2 years inprisonment, AND rectifying the structure to comply.

77
Q

Can a buyer be liable for past breaches of Building Regultions?

A

YES

Buyer’s solicitor needs to conduct searches pre-exchange and ask seller questions.

78
Q

What is required when a building is listed?

A

Listed building consent will be required in addition to planning permission and may also be required for internal works.

GDPO may noy apply, so matters which usually do not require express PP, likely will need it.

Copy of listing shoudl be obtained to uncover extent and nature of restrictions.

The higher the grade, the more restrictions
Grade I, Grade II* and Grade II. (I being the Highest)

79
Q

What is required when a building is in a conservation area?

A

Revealed by Local Search.

Additional planning restrictions in place to curtail GDPO rights.

Consent required to cut trees or any form of demolition.

Further information should be obtained from Planning Authority.

Property Law (11 decks)

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