Searches Flashcards
Why are searches necessary prior to purchase of a property?
CAVEAT EMPTOR - BUYER BEWARE
- Lets the buyer know whether any defects are present in the property which allows them to make decisions on how to act.
- Protection for purchaser e.g. if seller is bankrupt they may not have permission to give a good and marketable title
What are the two categories of due diligence?
- Private: Enquiries made of the seller as to the position of any matter
- Public: public registers are interrogated to disclose the position of the relevant matter
What is the Property Enquiry Certificate PECS?
- Obtained from the local council the PECS is a search which draws together information from various public registers.
What does the PECS cover?
- Planning
- Building Control
- Roads
- Statutory Notices
- Water and Sewage
- Contaminated Land
What will the PECS disclose in respect of PLANNING?
- Any planning applications, consents or refusals.
- Will include building warrants to show alterations done to property
- Whether the property is a listed building.
- Whether it is in a conservationist area.
- Whether the property is subject to any enforcement action.
What should a solicitor ensure when observing planning information?
- If in abstract form ask seller’s solicitor for any drawings.
- Make sure versions seen are certified copies or originals.
- Solicitor should match up alterations the property with building warrants etc.
Why may the listing of a building make a big difference to the purchaser?
- Some purchasers may be historians and welcoming listing
- Most purchasers will not as it will mean more restrictions are placed on what they can do in the property.
What are the three grades of legal protection for listed buildings?
A - Greatest protection for national treasures
B - Of regional importance
C - Of local importance
If a purchasers wishes to make alterations to a listed building what will they require?
- Listed building consent which includes a consultation and approval of Historic Scotland
- Patience
- An influx of money.
What will the PECS disclose in respect of BUILDING CONTROL?
- Will disclose if there are any building warrants that have been applied for in respect of alterations to the property
- More crucially it will show either the corresponding completion certificate confirmation has been issued by the council approving the works.
What should the purchaser’s solicitor do when reviewing the PECS in respect of BUILDING CONTROL?
- Analyse info about building warrants and completion certificates held by the council.
- This is to ensure that the work has been properly documented and that the necessary documentation is in place.
If the purchasing solicitor discovers work carried out on the property has not had the proper authorisation what may he or she do?
- Apply to the council for confirmation that they will not take action against the unauthorised works.
- May take form of a letter of comfort (if council prepared to give one) - for works completed prior to 1 May 2005
- After 1 May the Council may provide some from of confirmation such as a confirmation of completion or a property inspection report.
What will the PECS disclose in respect of ROADS?
- Whether roads are adopted ex adverso (to the boundary) of the property by the Council.
- If the road is adopted then the purchased need make no further enquires as they can assume a public right of passage, they are also not responsible for repairs and maintenance.
- If not adopted purchaser will need to make further investigation
- PECS will also disclose here whether the property is affected by transportation proposals such as proposal for bypass or road widening scheme.
What should the purchasing solicitor check in respect of ROADS within the PECS?
- Whether the purchaser will enjoy adequate rights over adopted road to his property.
- If road is not adopted purchaser will have to discover who has responsibility for maintenance and repair of road as it may be them.
What will the PECS disclose in respect of STATUTORY NOTICES?
- Disclose whether council served any statutory notices for repairs.
If a statutory notice is served on a building who usually has responsibility? And what will the purchaser’s solicitor do as a result?
- The Seller
- Solicitor will retain adequate funds from sale price to cover liability which would arise after settlement.
What will the PECS disclose in respect of WATER & SEWAGE?
- For a separate charge Scottish Water will produce a report stating whether the property is connected to water and sewage mains
- Scottish Water will also provide a helpful OS Plan detailing this.
- Most urban areas are connected to this.
What should the purchaser’s solicitor be sure to check in relation to WATER & SEWAGE?
- That the property enjoys adequate rights to the pipes to and from mains.
- If not then the purchaser’s solicitor will need to consider the adequacy of private arrangements.
What will the PECS disclose in relation to CONTAMINATED LAND?
- Whether the property is actually contaminated by virtue of being on the Contaminated Land Register kept under Part II of the EPA 1990
Why are there few properties actually on the Contaminated Land Register?
- As the Council usually prefer to impose planning conditions to remediate properties.
- This being an alternative to ‘blighting’ the land.
Why is a Coal Mining Report necessary?
- As some properties were unwillingly built on top of old coal mines.
- This makes properties more susceptible to movement, subsidence or collapse.
What does the Coal Mining Report detail and where can one be obtained?
- The CMR will hold details on where mines were constructed
- This can be obtained from the Coal Authority
When is a Coal Mining Report not required?
- The Law Society of Scotland allow solicitors to dispense with a CMR where there is no history coal mines where ever built in an area where the property is being purchased.
- A search can be done on the Coal Authority Website to check areas where coal mines were built.
Why is a Companies Search required?
- When buying from a company it is critical for the purchaser’s solicitor to ensure the company is of good standing.
Who will conduct a Company Search on behalf of the purchaser? And what will their search disclose?
A SPECIALIST COMPANY SEARCHER
- Search of Companies House will disclose whether the company has any proposals to strike of or wind up the company.
In addition to a search of Companies House, what else should the purchasing solicitor ensure the searcher checks?
- Companies Register of Charges to check whether the company has granted any charges over the property as these will have to be dealt with prior to settlement.
- Also should have a search conducted which shows the current directors and secretary so that these can be checked against details of signatories to the disposition.
How will the purchaser’s solicitor ensure that the purchaser is gaining a good and marketable title?
- By checking either that deeds have been registered in the General Register of Sasines or by examining the title sheet in the Land Register.
- The titles examined clearly show a historical position.
- Solicitor should also check there is nothing prejudicial to the granter’s title e.g. a lease when they expect vacant possession or a sale to someone else, outstanding securities, or inhibitions against seller.
What will property register reports usually detail?
- A searcher’s findings in respect of deeds, documents another entries.
- The search will typically include a search for records for a particular property.
- A search of the ROI will be conducted to check any records appearing against individuals or legal persons
- Will disclose any other title’s that need to be examined that are not already included.
What are the principal types of search?
- Legal Reports (property and personal)
- Company/Charges Search
- Register of Insolvencies
- Register of Community interests in Land.
What transactions does a ‘Legal Report - Unregistered Land’ apply to?
- Report that is needed for first registration transactions (where the property is not yet in the LR)
What will the Legal Report of Unregistered Land disclose?
- Discharges of securities within the last 5 years
any adverse entries in the ROI - Any extant advance notices or caveats
- the prescriptive progress of title for the preceding 10 years
If the Legal Report for Unregistered Land is obtained early it will likely not contain the Advance Notice application, what can the solicitor do?
- Obtain a Legal Continuation Report for no extra cost from the Registers.
- This can be done so long as it is within 6 months from the date of original report.
What is the difference of the Legal Report of Unregistered Land to commercial and residential transactions?
- For commercial the report is obtained early on in the transaction.
- For residential transaction the report is usually ordered just before settlement - with no continuation report being. needed.
Why may it be advisable to have the Legal Report for Unregistered Land done earlier even in residential transactions?
- As as the report is conducted just before settlement usually it may disclose matters such as an inhibition or unexpected standard security.
- This would cause a delay in settlement as there is little time to resolve the issue.
- Therefore solicitor may choose to have report done earlier and then for no cost (using Register Service) have continuation report done.
- This will lessen chance of any unexpected occurences.
What should the purchasing solicitor ensure when drafting the request for, and inspecting legal reports?
That the search covers all property that the purchaser is interested in.
What MUST the solicitor see within the legal report over Unregistered Land?
- Foundation Writ (the first writ conveying property that was recorded more than 10years ago)
- A prescriptive progress (all writs from the foundation writ to writ in favour of current granter)
- Undischarged standard securities (usually discharged as part of transaction, or deed of restriction granted if the security is over land larger than that interested by the party)
- Split offs (lets the solicitor know what parts of land are no longer owned by current granter)
- Miscellaneous Deeds e.g. servitudes or real burdens.
What should the length of search be in relation to the Legal Report over Unregistered Land?
- Search back to ten years or more for the prescriptive progress.
- This should start with the foundation writ.
- Search relating to undischarged standard securities should go back at least 40years.
What does the Legal Report over Registered Land disclose?
- discloses any deeds registered affecting the subjects after the date of registration.
- any deeds currently in the registration process that may affect the subjects
- any adverse entries in the ROI
any extant - advance notices or caveats
