Pre-contract searches and enquiries Flashcards
What is the report on title? What does it identify?
Report in which solicitor reports to its clients on investigation of title, search results and replies to enquiries - will identify:
- Material facts in respect of property
- Issues and their implications
- Solutions available
Must a report on title be in writing?
Not necessarily - can be verbal (ideally face to face)
What limitations to the solicitor’s liability should the report set out?
- No opinion on commerciality of the transaction
- Unable to advise on value of property
- Not advising on physical condition of property (encourage survey)
Can the report be relied on by anyone else?
No - is addressed to and confidential to client
Will solicitor be at fault if report does not identify an issue that should have been revealed in a search but wasn’t?
No - the report is only based on reviewing title documents, planning documents and replies to enquiries
What CCS requirements does a report on title fulfil?
- Disclosure of all information material to matter of which they have knowledge
- Giving clients information in a way they can understand
Will searches only be carried out by buyer’s solicitor?
Usually, but…
- Seller’s might carry out searches if dividing land in plots to different buyers
- Lender’s might carry out searches if remortgaging with no associated purchase
What are standard and optional searches? When should either be submitted?
- Standard - always necessary
- Optional - depend on circumstances
Both submitted ASAP as they can take several weeks
Some firms will require money on account before raising searches
What are the standard searches?
Always necessary
- Local search (CON29) - enquiries of local authority
- Search of local land charges (LLC1)
- Drainage and water enquiries
- Desktop environmental search
Depending on type of title/seller:
- Land charges search (unreg land)
- Search of index map (unreg or reg land subject to mineral rights)
- Companies search
Lets
Learn
Details
Diligently
What are the optional searches?
Depend on circumstances
- CON29O (inc commons registration search)
- Highways search
- Coal mining search
- Cheshire Salt
- Tin, clay and limestone
- Phase I/Phase II survey
- Flood search
- Utility providers
- Railways – overground, underground, crossrail or HS2
- Waterways
Will searches be raised by sending letters to all appropriate institutions?
Historically this was done, but today most solicitors use National Land Information Service (NLIS); intermediary between solicitors and institutions
What does the ‘local search’ comprise?
- Optional enquiries (CON29O)
- Standard enquiries of local authority (CON29)
- Local Land Charges Search (LLC1)
First is optional remember!
What will the optional enquiries (CON29O) be relevant for?
Part of local search but optional parts
- 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
What will the standard enquiries of local authority (CON29) reveal?
Part of local search and necessary
- 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
What will the Local Land Charges Search (LLC1) reveal?
Necessary
- 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
What matters will the drainage and water search check and who is the search submitted to?
Necessary
- Will check: whether foul/surface water drains to public sewer, whether property connected to mains water supply
- Sent to: relevant water company for specific area
What information is revealed by a deskptop environmental search?
Necessary
- Whether property has been historically used for potentially contaminative land uses (e.g. industrial)
- Likelihood of flooding, susceptibility to natural subsidence and industrial land uses within 250m of property
Cf local search which gives some information but only whether notices have been served(?)
Desktop = damaged by contamination
Environmental = events of flooding
Why is it important to detect contamination in a desktop environmental search?
Because an owner may be responsible for costs of cleaning up contaminated land even if not responsible for it
Not automatic
When should a chancel repair search be done and what is available to cover risk?
- For properties in parishes where there is a pre-Reformation church (susceptible to chancel repair liability)
- Indemnity insurance available to cover risk
Responsibility for repair of the church roof was shared between the church and the parishioners; very expensive if the parish church claims this.
NB the rest are depends searches
Not necessary
:)
When is a highways search needed and why not just rely on CON29?
- CON29 shows whether roads included in search are adopted highway (maintained by local authority) - usually sufficient for most residential properties
- Where there is doubt/for commercial properties - highways search is needed
What will a highways search reveal?
- Exact boundary between private land and public highway with reference to a plan
- If property abuts highway or any right of way the land has benefit of
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
What are the 3 mining searches and when are they used?
- Coal mining - where property in area that could be subject to coal mining (whether compensation already been paid)
- Cheshire Salt search - where property falls within area that could be subject to brine subsidence (parts of Cheshire)
- Tin, clay and limestone - specifically for minerals; dependent on area
What is the difference between a deskptop environmental search and an environmental phase 1 survey? What will phase 1 survey indicate that requires an environmental phase 2 survey?
- ENV P1 = more detailed than standard deskptiop and includes site inspection
- ENV P2 = where P1 indicates risk of contamination - soil/water samples tested to indicate contamination
When should a flood search be carried out?
Where property is known to have flooded in past
More detail than deskptop environmental search
Where is a utility providers search carried out and what does it check?
Where property is a (site for) new development - checks property has benefit of utility connections (elec, gas, telecom)
When is a railways search carried out and what is the specific search?
- Where railway passes near property/is within proximity of proposed railway
- No standard search; enquiries made to Network Rail/relevant company e.g. London Underground
When is a waterways search carried out? What liability does it show?
- Where property has a waterway (river/canal) passing through or next to it
- Shows liability for maintenance of river bank/canal, rights of way for banks and tow paths, drainage and fishing rights, and owner’s liability for flooding
What searches are relevant for the title/seller? When is each used?
- Index map search (SIM)
- MapSearch
- Central Land Charge Search (K15)
- Bankruptcy search (K16)
- Companies search
When is an Index map search (SIM) required and what does it show?
- Where property unregistered or comprises more than one title (reg or unreg)
- Shows extent of registered titles and unregistered land within area search
What is a MapSearch?
Free searchable map of registered titles on LR portal
Useful reference tool - but will not guarantee result unlike SIM
When is a Central Land Charge Search (K15) carried out and against whom?
Different to local land charges register (from necessary searches)
- Carried out where property unregistered
- Carried out against full names of seller and all previous owners referred to in epitome of title
When is a bankruptcy search (K16) carried out?
Against seller if transaction not at full market value and against buyer taking out mortgage
16 - age 16 you might consider taking out a mortgage / receive a transaction not at full value (e.g. house) from parents
When is a company search used and what will it show?
- If seller is a company
- Shows company in existence and security interests it has given
When is planning permission needed?
Whenever there is development on land
What is development?
Development =
1. Carrying out of certain building works on land; or
2. Material change of use of the land
Planning permission required for either
What are the 3 exceptions to the requirement of planning permission?
- Building works that only affect interior of building (unless listed!); or
- Building works that do not maerially affect the external appearance of the building; or
- Changes of use that are within the same use class
When will a change of use class require and not require permission?
- Change of use in same use class (e.g. hairdressers [A1] to pet shop [A1] = permission not required
- Change of use in different use class (e.g. non-eat-in sandwich shop [A1] to sit-in cafe [A3]) = permission required
What is a sui generis use and when is planning permission required for them?
- Sui generis use = does not belong to a use class; miscellaneous (pubs, theatres, fuel stations, concert halls, laundrettes)
- Change to or from suie generis use requires planning permission
What does the GDPO do re planning permission?
GDPO = Town and Country Planning (General Permitted Development) Order 2015
Allows certain developemnt (within conditions!) without planning permission
I.e. general planning permission
E.g. decking is permitted in a residential garden providing it is no more than 30 cm above the ground, covers no more than half of the garden area, and is to the back of the house
G - get
D - da
P - power drill
O - out
Because you don’t need planning permission!
Will GDPO always apply?
Can it always be used to carry out development?
Unless it has been excluded/amended by Article 4 Direction; make proposed development require planning permission
Hence why search enquiry made whether GDPO has been excluded (part of local search)
What can be done where it is uncertain whether development falls within GDPO?
Can apply for certificate of lawfulness; not planning permission but confirms work done does not constitute development/fall within GDPO
What is needed to demolish, alter or extend a listed building?
Listed building = buildings are of special architectural or historic interest.
Grade I listed buildings - buildings of exceptional interest (eg, Tower Bridge)
Grade II *** listed buildings - particularly important buildings of more than special interest (eg, Battersea Power Station)
Grade II listed buildings - of special interest (eg, Adelphi Hotel, Liverpool)
Listed building consent - separate requirement from planning permission and may be required even where planning permission isn’t e.g. internal alterations
What effect will a conservation area have on the GDPO?
Conservation areas are areas of special historic or architectural interest, the character or appearance of which is desirable to preserve or enhance.
GDPO restricted; changes to external appearance may require planning permission
What is the difference between England and Wales in terms of what is needed to demolish an unlisted building within a conservation area?
- England = planning permission
- Wales = conservation area consent
Summary of whether planning permission needed
- Is it development? Yes…
- Is it action excluded from need for PP (interior, changes within same use class)? No…
- Does it fall within GDPO? Yes…
- Is it disapplied by Article 4? Yes = PP needed
How are building regulations different from planning permission?
Building regulations regulate issues of health and safety e.g. strucutral integrity, fire escape, water supply
What building work do the building regulations apply to? Will it be needed as well as planning permission?
- Erection/extension of building
- Installation/extension of a service or fitting that is controlled under Building Regulations (windows, boilers)
- Work required when there is a material change of use of whole building
So may be needed at same time as planning permission, but sometimes require one without the other
What is needed for work covered by regulations before and after it is completed?
- Before = building regulations consent
- After = (potentially) inspection by building control inspector who issues a building regulations certificate of compliance
Self-certification schemes exist for certain types of work.
For example, a window installer registered with the Fensa (Fenestration self assessment) scheme will certify to Fensa that windows comply with building regulations. Fensa will then lodge the certificate with the local authority.
Other work covered by self-certification schemes include roof replacement (NAPIT or CompetentRoofer), gas boiler (Gas Safe Register), cavity walls (Blue Flame Certification)
When does a breach of planning control occur?
- Development has taken place without planning permission; or
- Condition/limitation of planning permission has been breached
What are the 4 enforcement options for a local authority for a breach of planning control?
- Enforcement notice
- Stop notice
- Breach of condition notice (similar to enforcement notice but only concerned with conditions/limitations to planning permission)
- Injunction (discretionary and must show good reason)
If an enforcement notice is used, what will the notice instruct and how long does the land-owner have to comply with it?
- Notice that land must be restored to pre-unauthorised development condition or comply with conditions/limitations implied by planning permission
- Land-owner has 28 days to comply with it
What happens after 28 days?
- Landowner can be fined
- Local authority can enter land to carry out work and recover expense from landowner
What is a stop notice and when can it be served?
- Requires specified activity (unauthorised use) to stop immediately
- Can serve a stop notice only after serving enforcement notice
What are the 2 different enforcement time limits and to what do they apply? When do they start to run?
4 years
- Building works (starting on date when work substantially completed)
- Change of use to single dwelling house (starts with date use begun)
10 years
- Other changes of use
- Breach of planning condition
Less (4 years) where it is a home because you would be disturbing family and because builders would have made good progress in 4 years
More (10 years) because if something is used it will be over a long period of time and it will be conditioned
When can a local authority enforce outside of these time limits?
Where a breach of planning control has been deliberately concealed the local authority can apply to magistrates’ for a planning enforcement order
End of concealement can be where time starts to run (see below)
Fidler v Secretary of State for Communities and Local Government [2010] EWHC 143 (Admin),
- Landowner built a house without planning permission, and concealed it behind bales of straw covered with a tarpaulin.
- The landowner waited for the four years to elapse, and then removed the straw to reveal the house.
- Held that the landowner had always intended to remove the straw bales, so considered it part of the building operation, and the four year period ran from the date on which the bales were removed.
What are the enforcement options for a breach of building regulations?
- Prosecution
- Enforcement notice
- Injunction
How long does the local authority have to prosecute and who will they prosecute? What can be imposed as a result?
- 6 months after discovering breach to prosecute person responsible (builder, installer, main contractor) - Unlimited fines may be imposed
- 2 years since completion of building work
Prosecution may take place up to two years after completion of the building work.
How does an enforcement notice work for building regulations and how long does the local authority have to serve one?
- Same as breach of planning: 28 days to alter/remove, if not then LA can undertake work at landowner’s expense
- Has one year after completion of building work to serve enforcement notice
What is the time limit for a local authority to apply to court for an injuntion?
There is no time limit if work is unsafe
What will the buyer’s solicitor use to check for compliance with planning law and building regulations?
- Local search (planning permissions, building regulation consents and approvals, GDPO etc.)
- Seller’s replies to equiries (for work done or change of use etc.)
- Buyer’s survey (may reveal work not mentioned in replies)
What options are available to the buyer on discovering a breach of planning or building regulations?
- Withdraw from transaction
- Invite seller to regularise matters before completion (as term of contract)
- Obtain indemnity insurance (usually at seller’s expense)
- (Some circumstsances) obtain retrospective planning permission or regularisation certificate
What is the limit of indemnity insurance for breach of planning/building regulations?
- Only covers financial loss for enforcement
- For breaches of building regulations - buyer should be advised of health and safety risk; policy does not cover claims for PI and death
Why raise pre-contract enquiries?
- Caveat emptor
- Seller knows information not available in public records/on inspection
- Seller can face liability for incorrect answers
- If seller does not have actual knowledge - buyer knows they are taking risk
Should pre-contract enquiries be treated as sole source of information?
No - quality of replies depends on seller and buyer’s solicitor should treat with caution
In commercial transactions, what is usually used for pre-contract enquiries?
CSPE1 + enquiries specific to transaction
What does CSPE1 cover?
- responsibility for boundaries, and their extent
- rights benefiting and burdening the property
- access to the property
- physical condition
- contents
- utilities and services
- planning and building regulations
- occupiers and employees
- notices and disputes
- Value Added Tax (VAT) treatment
When will CSPE2 or CSPE3 apply?
- CSPE2 = where property is subject to commercial tenancies (e.g. purchase of office block)
- CSPE3 = on grant of new lease
2 = more than one (tenancy)
3 = rhymes with lease
In residential transactions, what is usually used for pre-contract enquiries?
If parties adopt Law Society Conveyancing Protocol (discussed soon), enquiries usually use relevant TransAction form
What 2 TransAction forms are used and what do they cover?
TA6 Property Information form - covers…
- boundaries
- rights benefiting and burdening the property
- disputes, complaints and notices
- alterations
- planning and building regulations
- occupiers
- services and utilities
- energy efficiency
TA10 Fittings and contents form - covers fittings and contents included/excluded in sale (or those which buyer may buy in addition to property)
TA6 = 6 year old probably cries a lot and this might be subject to a complaint
TA10 = you would want to make sure your 10-inch screen TV is not a fixture
Where will TA7 and TA8 be used?
- TA7 where property is a long leasehold (e.g. flat on 99 year lease)
- TA8 where property has been newly built
7 upside down is an L = long leasehold
8 = no one has ate dinner in a new property yet
In commercial transactions, what additional enquiries is a buyer’s solicitor limited to and does seller’s solicitor always have to respond?
- Buyer’s solicitor can raise whatever enquiries they like
- Seller’s solicitor can decline to respond to enquiries they belive are irrelevant or would incur unnecessary time/expense to answer
In residential transactions (which follow conveyancing protocol), what additional enquiries is a buyer’s solicitor limited to?
- Only enquiries arising out of documents provided/relevant to title/existing or planned use/nature or location of property
- Should not raise additional enquiries re state/condition of building unless arising out of search results, standard replies to enquiries, inspection or surveyor’s reports
Where the replies given by seller are wrong, what is the buyer able to do?
- If seller misrepresents a fact, they have made a misrepresentation
- If a buyer relies upon misrepresentation and suffers loss = buyer could have action against seller in misrepresentation
NB cannot misrepresent an opinion
What are the only 2 situations usually in which buyer can rescind contract for misrepresentation (as contained in most commercial and residential property contracts)?
Remedies for misrepresentation = rescission or damages.
Most commercial and residential property contracts include standard conditions which limit the buyer’s ability to rescind the contract - can only rescind where an error/omission:
- Results from fraud or recklessness; or
- Where buyer would be obliged, to his prejudice, to accept a property differing substantially (in quantity, quality or tenure) from that which the error or omission had led it to expect
Greenridge - reply to CSPE said no disputes or service charge arrears - buyer found out tenant had withheld half a year’s service charge - held representation made fraudulently and recklessly and buyer could rescind contract + substantial damages for wasted costs
When will damages be available for misrepresentation?
Where there is ‘a material difference between the represented and the actual description or value of the property’
When acting for a seller, what would an answer of “not so far as the seller is aware” imply? What should be caveated?
- That they have made reasonable investigations and has no actual knowledge of any defect
- Should check records and make reasonable enquiries - and state if they are unable to make investigations
In a residential transaction, can the standard enquiries be sent to client for them to answer alone?
Cf commercial CSPEs which are complex and part-completed drafts will be given to clients
Yes, but should still check replies before sending to buyer’s solicitors
What is the Law Society Conveyancing Protocol and what is its aim? What is it not appropriate for?
- Set of steps to take when acting in the sale/purchase of a home for an owner-occupier
- Aim: make conveyancing process more efficient and transparent to benefit of all parties involved
- Not appropriate for new build homes
Love
Stayed-in homes
Can’t stand
(newly) Propped up homes
Transparency = sharing information to assist progress of transaction (subject to client confidentiality)
‘The use of the Protocol is intended to ensure that all clients are treated fairly and are protected when dealing with high value assets and liabilities. Processes that are open and transparent help make the experience more efficient and reduce wasted time and costs.’
Do all solicitors have to adopt the protocol?
- If members of Law Society’s Conveyancing Quality scheme - yes (+ training)
- If not - any solicitor or licensed conveyancer still able to adopt it!
Appeal is the accreditation = provides a recognised quality standard for residential conveyancers and reduces the risk of fraud
Will adoption of the Law Society Conveyancing Protocol mean compliance takes precedence over the obligatin to act in client’s best interests?
No
What does the Protocol say about enquiries in terms of…
- The only enquiries buyer’s solicitor should make
- When seller’s solicitor should confirm/update enquiries
- Enquiries the seller needn’t deal with
- Buyer’s solicitor should only make enquiries that are essential to act in client’s best interests
- Seller’s solicitor should confirm and update replies to enquiries if needed if completed more than 2 months earlier
- The seller’s solicitor does not have to deal with any enquiries that do not comply with Protocol
What would mean a solicitor breaches the Protocol?
- Using non-protocol ‘standard’ enquiries indiscriminately
- Raising enquiries that seek seller’s opinion rather than fact
What are the consequences of breaching the Protocol?
Law Society may require an explanation, potentially leading to their being monitored and even removed from membership of the Conveyancing Quality Scheme.
Solicitors who choose to adopt the Protocol, who are obliged (as they are part of the Conveyancing Quality Scheme) agree:
* to comply with its terms; and
* act within the spirit of the Protocol.
