Pre-Contract Property Searches and Enquiries Flashcards
chapter 3
What is the principle of “caveat emptor” in property transactions?
Caveat emptor” means “let the buyer beware.” It places the responsibility on the buyer to uncover issues with the property, as the seller has a limited duty to disclose. This principle necessitates pre-contract searches and enquiries.
Who is primarily responsible for conducting due diligence in a property purchase?
The buyer’s solicitor is primarily responsible for carrying out due diligence, which includes conducting searches and raising enquiries to gather information about the property.
Why is it crucial to conduct searches and enquiries before exchanging contracts?
The buyer can withdraw from the transaction if they discover something they dislike before exchanging contracts, but they may be in breach of contract if they withdraw after the exchange.
Name three types of property surveys.
○ Valuation: Assesses the property’s value for a lender.
○ Homebuyer’s Valuation and Survey: Less detailed than a structural survey, includes advice on repairs.
○ Full Structural Survey: Provides a detailed commentary on the structure of the property.
What is the purpose of a local search?
A local search, including form LLC1 and form CON29, reveals information from the local authority, such as planning permissions, restrictions, and whether the land is contaminated. Optional enquiries are raised in a separate CON29O form and cover a range of matters.
What does a water and drainage search reveal?
A water and drainage search, using forms like CON29DW (residential) and CommercialDW (commercial), determines if the property connects to a public sewer and water supply, and if the drains are “adopted” (maintained by the water company).
What are pre-contract enquiries of the seller?
These are questions the buyer’s solicitor asks the seller about the property, such as disputes, occupiers, planning permissions, and boundary issues.
Why are environmental searches important?
Environmental searches identify potential land contamination and related liabilities under the Environmental Protection Act 1990. A desktop search is a common type of environmental search.
When is a flood search indicated?
A flood search is recommended for properties near rivers or the coast, but also for any property due to the risk of surface water flooding.
What is a chancel repair search, and why is it needed?
A chancel repair search identifies potential liability for repairs to the chancel of a Church of England parish church. It’s particularly relevant for unregistered land or pre-October 13, 2013 registered land transfers.
Why are mining searches important?
Mining searches, like the CON29M for coal, reveal past or future mining activity, which can cause subsidence. These searches are important in areas known for mining.
What is the purpose of a Canal & River Trust search?
This search is for properties near canals or rivers and helps identify who is responsible for maintaining the waterways, banks, and towpaths.
What is the purpose of a Commons search?
A commons search checks if a property is affected by common rights or is registered as a town or village green, using enquiry 22 in the CON29O form.
What is the purpose of a Company search?
When the seller is a company, a company search at Companies House checks the seller’s capacity to contract, confirms who can sign documents and identifies charges secured on the property.
Why is a bankruptcy/insolvency search important?
This search, often using form K16, is conducted before completion to ensure the buyer/borrower is not bankrupt or insolvent, particularly when acting for the lender.
