Chapter 5: Buyer's Pre-Contract Searches and Enquiries

Question 1

When will the buyer’s solicitor ask the buyer to pay a sum of money on account for searches and other disbursements?

Answer 1

Once the buyer’s solicitor has sent the client care letter to their client, obtained client identification, and carried out due diligence regarding the buyer’s funds

Question 2

Why will the buyer’s solicitor ask the buyer to pay a sum of money on account for searches and other disbursements?

Answer 2

Because the cost of the pre-contract searches is incurred upfront.

The buyer’s solicitor will submit the searches early in the transaction

Question 3

What is the purpose of the searches?

Answer 3

For the buyer’s solicitor to gather practical information about the property.

This information, as well as information on matters of title, will be included in a report to the buyer.

The buyer can then make an informed decision as to whether they wish to purchase the property .

Question 4

How are searches applied for?

Answer 4

Often, the buyer’s solicitor can apply directly to the entity involved (e.g., the local authority) for these searches.

However, there are now a large no. of online search providers, and many solicitors use these services to apply for all required searches at the same time.

This generally saves both time + money for the client.

Question 5

What searches are so important that the buyer’s solicitor will carry them out on every transaction?

Answer 5

1. Local Search
2. Drainage and Water Search
3. Environmental Search

Question 6

What is the local search?

Answer 6

A search that gathers information held by the local authority in which the property is situated.

The Law Society publishes forms that may be used to make these enquiries.

Question 7

What is the first part of the local search?

Answer 7

Local land charges.

Seeks to reveal whether there are any local registrations made against the property by the local authority which would in some way burden the property.

There are 12 types of charges that may appear on the local land charges register.

Question 8

What types of charge most commonly appear on the local land charges register?

Answer 8

1. General and specific financial charges
2. Planning charges
3. Listed building charges

Question 9

What are general and specific financial charges that might appear in a local search?

Answer 9

The local land charges register includes general and specific financial charges owed to the local authority in relation to the property.

E.g., an improvement grant or a situation in which the local authority has paid fees for a homeowner to go into local authority care pending the sale of the property.

Question 10

Why might general and specific financial charges not be on the property’s Charges Register?

Answer 10

Would not necessarily appear on the Charges Register of the title to the property if a relatively modest sum is involved

Question 11

What is the cure if a local search reveals general or specific financial charges?

Answer 11

If a buyer’s solicitor notes entries of general and specific financial charges in the results of the local land charges search, they should raise this as an enquiry and ask the seller’s solicitor to undertake to repay the charges from the sale proceeds and procure the removal of the charges from the local land charges register.

Question 12

What will the planning charges part of the register on a local search reveal?

Answer 12

Any planning agreements and entries against the property relating to development of the property, such as extensions.

This part of the register also reveals any Tree Preservation Orders (TPOs) affecting the property.

Question 13

Why are Tree Preservation Orders (TPOs) important?

Answer 13

Such orders protect the lopping or falling of a protected tree without local authority consent.

Contravention can lead to a fine and is a criminal offence .

Question 14

What is the difference between the search of the local land charges register and the search of the land charges register?

Answer 14

Search of the local land charges register - conducted by the buyer’s solicitor as a pre-contract search to gather practical information about the property.

Search of the land charges register - conducted by the buyer’s solicitor during the pre-contract stage as a means of investigating title and determining whether there are any third-party rights to the land

Question 15

What is the second part of the local search?

Answer 15

A set of standard enquiries of the local authority regarding issues such as:

1. Roads,
2. Public Rights of Way
3. Planning

The enquiries will also reveal additional information which may be relevant to a buyer, such as whether:

i. there are any proposed road, rail, or traffic schemes which might impact on the property,

ii. there are any outstanding planning or enforcement notices,

iii. the property falls in a conservation area, or

iv. the property is subject to compulsory purchase (subject to being acquired by a local authority without consent of the owner).

Question 16

Why would the local authority provide information about roads upon a local search?

Answer 16

Whether the road fronting a property is adopted by the local authority, in which case the user has an automatic right of way over it, and the road will be maintained by the local authority

Question 17

What will the local search reveal re public rights of way upon enquiry of the local authority?

Answer 17

Whether any public rights of way cross the property are enjoyed by members of the public (in which case the owner cannot refuse access to the public)

Question 18

What information will the local authority provide re planning upon a local search?

Answer 18

Detailed planning information, including planning entries and buildings regulations consents.

Question 19

What should be done if a buyer’s solicitor’s local search reveals that a road fronting the property is not adopted by the local authority?

Answer 19

The buyer’s solicitor should raise an enquiry to establish how the roadway is maintained.

The buyer’s solicitor should also make a careful investigation of title to check that the property enjoys a legal right of way over the road in question.

If not, this would be a serious title defect + indemnity insurance and statutory declaration by the seller may be required.

Question 20

What are options enquiries of the local authority within a local search?

Answer 20

Optional enquiries are questions which the local authority will answer if requested by the solicitor and an additional fee is paid.

Question 21

What are the most common optional enquiries asked of a local authority?

Answer 21

Include whether:

1. Any road proposals have been made by private bodies, that is, whether a private company rather than the local authority is proposing to alter or improve an existing road in the locality,
2. Any major gas pipelines affect the property,
3. The property is a house in multiple occupation,
4. Any environmental pollution notices have been served, or
5. The property abuts common land and town or village green

Question 22

When should a common land and town or village green enquiry be made?

Answer 22

If the land abuts or is adjacent to land that has been designated common land or a town or village green.

This is important for a buyer to know because there may be restrictions on access over common land in addition to restrictions on developing or enclosing common land.

The designation may also give people in the locality the right to use the land for recreational purposes.

Question 23

When is it essential that the buyer’s solicitor mark an optional enquiry regarding commons registration?

Answer 23

If a property abuts or is adjacent to a village green, or
Is a new build - property being built on formerly undeveloped land.

Question 24

What is a drainage and water search?

Answer 24

The buyer’s solicitor sends a drainage and water search to the local water company which enables the buyer’s solicitor to establish details about:
- water supply,
- metering, and
- the proximity of a public sewer.

If the property is not connected to these services, the buyer’s solicitor should raise this issue as an enquiry of the seller’s solicitor

Question 25

Why will an environmental search be done?

Answer 25

Landowners are responsible for paying the clean-up costs for any contaminated land they own.

This is the case even if the current landowner didn’t cause the contamination.

Question 26

How is the environmental search carried out?

Answer 26

It is a desktop search that can be conducted by the buyer’s solicitor + will reveal such issues as current and former use of the land

Question 27

What are transaction- specific searches?

Answer 27

1. Search of the Index Map
2. Bankruptcy Search
3. Company Search

Question 28

When will the buyer’s solicitor carry out a search of the index map?

Answer 28

If the title is unregistered

Question 29

How is a search of the index map made?

Answer 29

Made by sending the property’s address or plan identifying the property via the HMLR’s online portal for a fee.

The search result reveals whether the property is fully or partially registered

Question 30

When will the buyer’s solicitor carry out a bankruptcy search?

Answer 30

If the buyer is getting a mortgage.

The buyer’s solicitor will carry out an online bankruptcy search against the full name of the buyer/s as part of the solicitor’s pre-contract searches usually via the HMLR’s online portal.

Question 31

What will a bankruptcy search reveal?

Answer 31

Will reveal any pending or actual bankruptcy orders against the buyer.

Such a result must be reported to the lender + the transaction will probably fail as the lender will not lend to someone who is facing bankruptcy

Question 32

When is a company search necessary?

Answer 32

If the seller is a company.

Question 33

What does a company search reveal?

Answer 33

Reveals whether the company is subject to any winding up or liquidation proceedings + whether the company is authorised to deal in the sale and purchase of land.

The company search will also reveal attachment of any fixed or floating charges with respect to the company

Question 34

What are examples of location-specific searches?

Answer 34

1. Coal mining search
2. Chancel liability search

Question 35

When will a coal mining search be done?

Answer 35

If the property is in an area where coal mining is or has been carried out.

Question 36

What does a coal mining search reveal?

Answer 36

Reveals whether there is (or has been) any such work within the locality.

This is important because coal mining shafts could seriously affect the stability of the property + might cause a buyer to withdraw from the purchase.

Similar considerations apply in relation to brine extraction + other forms of mining, such as tin or silver.

Question 37

What is chancel liability?

Answer 37

When a property is subject to an ancient obligation to contribute to the upkeep of the chancel of a church in the locality.

Question 38

What is a chancel search?

Answer 38

Desktop search which will identify whether the property is at risk of the charge.

Question 39

What happens if a property is subject to chancel liability?

Answer 39

If a property is found to be at risk of this liability, indemnity insurance is usually the solution.

Question 40

When will the buyer’s solicitor raise enquiries?

Answer 40

If the buyer’s solicitor identifies any questions, requires a title defect to be remedies, or if the buyer wishes to clarify issues contained in the title, PIF, and search results.

Question 41

What should be done after the buyer’s solicitor has ‘raised enquiries’?

Answer 41

A copy of the enquiries and the responses provided by the seller should be sent to the buyer for their perusal + comment prior to exchange of contracts.

The buyer’s solicitor should not proceed to exchange of contracts until all enquiries have been answered to their satisfaction

Question 42

What is the Commercial Property Standard Enquiries form?

Answer 42

CPSE

Commercial equivalent of the PIF.

Can be used for commercial freehold or leasehold transactions.

The CPSE enquiries are a range of pre-printed enquiries that a tenant’s or buyer’s solicitor will send to the solicitor on the other side for completion and return.

This will be done at the beginning of the transaction.

Question 43

When will additional forms be used in addition to the CPSE?

Answer 43

There are additional supplemental forms intended to be used with the main enquiries depending on the nature of the transaction.

E.g., if a property is sold subject to existing tenancies or if a lease is being granted or assigned, extra forms will be used.

Question 44

What are the key issues covered in the CPSE?

Answer 44

1. Boundaries,
2. Rights benefitting and burdening the property,
3. Physical condition of the property,
4. Utilities and services,
5. Fire safety and means of escape,
6. Planning and buildings regulations,
7. Environmental issues,
8. Occupiers and employees,
9. Insurance,
10. Any disputes regarding the property