Pre-contract searches and enquiries

Question 1

What is a report on title?

Answer 1

A report on title is the report in which a solicitor reports to its client on its investigation of title, search results and replies to enquiries.

Can take the form of a letter or standalone document.

Question 2

Why do a report on title?

Answer 2

Buyer’s solicitor needs to find out as much as possible about a property before exchange of contracts. Caveat emptor means that once contracts are exchanged, in general the buyer has no means of objecting to any issues that arise.

Question 3

How is a report on title done?

Answer 3

Buyer’s solicitor investigates title, raises searches and standard enquiries. If they identify any issues that require further information they may raise additional enquiries with the seller’s solicitor.

Question 4

What will be identified in a report on title?

Answer 4

• Material facts in respect of the property
• Issues and their implications
• Solutions available

Will summarise and put into plain English for the client, the solicitor’s findings.

Question 5

Typical contents page of a report on title

Answer 5

1. interpretation
2. Scope of the review and limitation of liability
3. executive summary
4. purchase price and other contract terms
5. the property
6. matters benefitting the property
7. matters burdening the property
8. search results
9. relies to enquiries
10. planning and building regulations
11. insurance
12. SDLT
13. Conclusion

Question 6

Scope of the report on title

Answer 6

• Addressed to client and generally confidential to that client: should not be relied upon by anyone else
• Report should state that it is based on reviewing the title documents, search results, planning documents and replies to enquiries
  Not solicitor’s fault if the report does not identify an issue that should have been revealed in a search by wasn’t
• Report should set out limitations to the solicitor’s liability

Question 7

Who carries out searches?

Answer 7

• usually carried out by the buyer’s solicitor
• seller’s solicitor might carry out searches, eg, if dividing land in plots to different buyers
• Lender’s solicitor might carry out searches, particularly for a remortgage with no associated purchase
• Searches usually submitted as early as possible, as some searches can take several weeks
• Standard searches will always be necessary; optional searches will depend on the particular circumstances

Question 8

Standard searches

Answer 8

• Local search: CON29 (enquiries of the local authority) and LLC1 (local land charges)
• Drainage and water enquiries
• Desktop environmental search
• Chancel repair search

Depending on title/seller
- land charges search (unregistered land)
- search of the index map (unregistered or registered land subject to mineral rights)
- companies search

Question 9

Optional searches

Answer 9

• CON29O (including 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

Question 10

National Land Information Search (NLIS)

Answer 10

Online portal to order searches. Different channel providers (Searchflow etc)

Acts as an intermediary between solicitors and various institutions.

Solicitor inputs address of property and sketch boundaries on an Ordnance Survey map.

Some searches are immediate but some take several weeks.

Question 11

What is the local search?

Answer 11

Covers all matters relating to the property within the knowledge/records of the local authority. Comprises three parts:

• Local Land Charges Search (LLC1): register of local land charges e.g. payment of money to bring road up to adoptable standard, listed building status etc.
• Standard enquiries of the local authority (Form CON29): matters such as planning and building regulations, roads and public rights of way
• Optional enquiries (Form CON29O: usually on ticked in specific circumstances - e.g. commons search

Question 12

Local search - CON29

Answer 12

Replies to the standard enquiries of the local authority:
- planning permissions, refusals and completion notices
- building regulations
- roads and public rights of way (footpaths)
- Environmental notices (contaminated land notices)

Optional enquiries CON29O
- common land and town or village green
- Road proposals by private bodies
- Areas of outstanding natural beauty and national parks
- Pipelines
- Noise abatement zones

Question 13

Local search - LLC1

Answer 13

12 parts which reveal:
- planning permissions that have been granted
- planning enforcement or stop notices
- article 4 directions (restricting GPDO)
- tree preservation orders
- smoke control orders
- financial charges such as road-making charges
- conservation areas
- listed building status

Question 14

Drainage and water search

Answer 14

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.

Questions are submitted to the relevant water service company for the area e.g. Yorkshire water in York.

Question 15

Desktop environmental search

Answer 15

Desktop search of environmental records and will look at if the property has been used for potentially contaminative land uses.

Contains information about the likelihood of flooding and susceptibility to natural subsidence and industrial uses within 250 metres.

Question 16

Chancel repair

Answer 16

Should be run where there is a pre-Reformation church in the area.

If has one should get insurance.

After end of 2013 became registrable.

Question 17

Highways search

Answer 17

Local search will show whether roads included in the search are adopted highways (maintained by the local authority).

For most residential properties, usually sufficient.

Will show boundary of the highway on a map. If the results show that the property does not immediately abut the highway then it will be necessary to ensure that there are appropriate rights of access.

Question 18

Mineral searches

Answer 18

Coal mining: if in an area affected by coal mining - check. Will id risks of subsidence and if compensation has been paid.

Cheshire salt search: brine subsidence and if comp has been paid.

Tin, clay and limestone: similar coal and salt - areas of Cornwall and Somerset

Question 19

Environmental searches

Answer 19

Run if desktop shows risks:

Phase 1: more detailed and includes site inspection

Phase 2: taken where phase 1 indicates risk. Soil/water sampled are tested to indicate whether there is contamination or not

Flood: where property is known to have flooded in the past. Foes into more detail than the environmental desktop search

Question 20

Miscellaneous searches - utility, railway, waterways

Answer 20

Utility: used for a new development or site, check property has benefit of utility connections

Railways: where railway passes near a property or property may be within proximity. No standard search but check with each rail

Waterways: If property has a river or canal near it - shows liability for maintaining river bank or canal, rights of way for banks or two paths, drainage and fishing rights and liability for flooding.

Question 21

Pre-contract enquiries

Answer 21

Standard Commercial: CPSE1
Commercial property standard enquiries

Residential:
- Property info form TA6: info about boundaries, alterations, work done, neighbour disputes, occupiers, utility providers, location of utility metres

• Fittings and contents form (TA10): items that are included or not in the such as curtains, light fittings, carpets etc.

Question 22

Additional enquiries

Answer 22

Buyer’s solicitor will typically raise additional enquiries on specific issues from the investigation of title, search results or standard replies.

May bounce back and forth a number of times until satisfied.

Note: seller cannot deliberately mislead the buyer by concealing defects or answering enquiries dishonestly. Misleading statement may give rise to an action in misrepresentation.

Question 23

Searches relating to title/seller

Answer 23

Index Map search (SIM): where property is unregistered or comprises more than one title or title refers to mineral rights. Shows extent of registered titles and unregistered land within the area searched.

MapSearch: Land Registry portal contains a free searchable map of registered titles. Useful reference tool but no guarantee.

Central Land Charges Search (K15): if unregistered carried out against full names of seller and previous owners.

Bankruptcy Search (K16): only carried out if sale is not a full market value.

Companies search: If seller is a company then a company search should be made to check that the company is in existence and has not gone into liquidation or been dissolved. Also shows any security interests which have been given.

Question 24

12 parts of the LLC1

Answer 24

1 - General financial charges

2 - specific financial charges

3- planning charges
+ planning permissions granted
+ conservation area
+ tree preservation order

4- miscellaneous charges
+ smoke control order

5- Fenland ways maintenance charges

6 - Land compensation charges

7 - New towns charges

8 - Civil aviation charges

9 - Opencast coal charges

10 - Listed buildings charges

11 - Light obstruction notices

12 - Drainage scheme charges

Question 25

Planning permission CON29 and LLC1

Answer 25

LLC1: what planning permissions there have been CON29: what planning permission requested, granted, refused and any pending applications - building regs approvals and certificates

Question 26

CON29

Answer 26

CON29: what planning permission requested, granted, refused and any pending applications - building regs approvals and certificates - roadways: adjacent roads and adoption plans (not highway search shows exact boundary) - notices served regarding contaminated land - public footpaths

Question 27

CON29O

Answer 27

Additional enquiries cost more money Only raise if relevant to property - road proposals by private bodies - advertisements - completion notices - parks and countryside - pipelines - houses in multiple occupation - noise abatement - urban development areas - enterprise zones, local development orders - inner urban improvement areas - simplified planning zones - land maintenance notices - mineral consultation and safeguarding areas - hazardous substance consents - environmental and pollution notices - food safety notices - hedgerow notices - flood defence and land drainage - common land and town or village green

Question 28

Where would you expect to find out whether a public footpath crosses a property?

Answer 28

The Local Authority Search Result (CON29).

Question 29

Why raise pre-contract enquiries?

Answer 29

- caveat emptor: onus is on the buyer to find out as much information as possible - seller usually knows information about the property that is not available in public records or on inspection - seller can face liability for incorrect answers - if the seller does not actual knowledge of the property then they may decline to give replies.

Question 30

Commercial property standard enquiries

Answer 30

CPSE1: all commercial properties - responsibility for boundaries - rights benefitting and burdening the property - access to the property - physical condition - contents - utilities and services - planning and building regulation - occupiers and employees - notices and disputes - VAT treatment CPSE2: applies where the property is subject to commercial tenancies CPSE3: Applies on the grant of a new lease CPSE4-6: Applies to specific other circumstances

Question 31

Residential property enquiry forms

Answer 31

TA6: always used - boundaries - rights benefiting and burdening the property - disputes, complaints and notices - alterations - planning and building regulations - occupiers - services and utilities - energy efficiency TA10: always used - fittings and contents included in the sale or may buy TA7: used where the property is a long leasehold TA8: used where the property has been newly built

Question 32

Additional enquiries

Answer 32

Commercial: can ask whatever they like Residential: conveyancing protocol - buyer's solicitor may only raise additional enquiries to clarify issues arising out of the documents provided - relevant to title, existing or planned use, nature of location of the property. Should not ask about state and condition unless arising out of the search results, standard replies, inspection or surveyors report.

Question 33

What if replies are wrong

Answer 33

Will have made a misrepresentation. If the buyer relies on this and suffers a loss the buyer could have an action against the seller in misrepresentation. Seller cannot deliberately mislead the buyer by concealing physical defects or answering enquiries dishonestly. Saying 'not so far as the seller is aware' implies reasonable investigation has taken place so care should be taken. If unable to investigate, seller should state this in their reply. Includes making reasonable efforts to check records and speaking to the appropriate people in the organisation.

Question 34

Limiting responsibility for incorrect replies

Answer 34

Remedies for misrepresentation are rescission or damages. Most commercial and residential property contracts include standard conditions which limit the buyer's ability to rescind the contract. An error or omission on entitles the buyer to rescind the contract: (a) where it results from fraud or recklessness (b) where the buyer would be obliged to his prejudice to accept a property differing substantially from that which the error or omission had led it to expect Damages are only available where there is a material difference between the represented and the actual description or value of the property.

Question 35

Replies when acting for seller

Answer 35

Residential: usually passes on enquiries to client as these are more user friendly. But should still check answers and make sure nothing incorrect or incomplete. CPSE: complex and solicitor may need to assist in filling these out. Check CPSE against title. Make sure client approves the answers before selling.

Question 36

Law society conveyancing protocol

Answer 36

- aims to make the conveyancing process more efficient and transparent to the benefit of all parties involved. - a set of steps to take when acting in the sale or purchase of a home for an owner-occupier - Protocol is not appropriate for new build homes - Transparency means sharing information to assist the progress of the transaction - Protocol is voluntary but any solicitor or licensed conveyancer can adopt the protocol (but must do it if part of the Law Society's Conveyancing Quality Scheme)

Question 37

Protocol: enquiries

Answer 37

Buyer's solicitor: - should only make enquiries that are essential to act in their client's best interest Seller's solicitor: - should confirm and update where necessary, replies to enquiries if completed more than two months earlier - seller's solicitor does not have to deal with enquiries that do not comply with protocol

Question 38

Enquiries: breaching protocol

Answer 38

May breach if: - use non standard enquiries - raise enquiries that seek the seller's opinion rather than fact

Question 39

Consequences of breaching protocol

Answer 39

Solicitors who adopt the protocol agree: - to comply with its terms; and - act within the spirit of the protocol If a solicitor breaches protocol then the Law Society may require an explanation, potentially leading to their being monitored or removed from the Conveyancing Quality Scheme

Question 40

What do solicitors using the code agree to adopt?

Answer 40

- Standard Conditions of Sale (incorporated into the contract) - Property Forms - Formulae for exchange - Code for Completion by Post