When buying a home, your conveyancer or solicitor will undertake property searches, but what are they, what do they reveal and are they really necessary? James Sherwood Rogers, chairman of the Council of Property Search Organisations, explains the importance of searches.
Imagine you move into your new house and find out that you can’t cut down that tree which is stopping all the natural light coming into your front room.
Or you have plans to build a small extension within the permitted development limits only to find your house is in a conservation area and you can’t go ahead. Or that beautiful view of fields is going to be replaced by an industrial estate within the next five years. Or that funny plant in the garden is Japanese Knotweed, or your property floods the week after you move in, or they suddenly start fracking under your house or the new High Speed Train Line project (HSL) sets up a works base round the corner or…or… You get the idea!? There are lots of things that could make the home purchase of your dreams turn into a short or longer term nightmare.
The role of property searches is to make sure that homebuyers have all the facts about a property before they buy it and do not find out about serious problems afterwards when it is too late.
It is the normal routine for the lawyer acting for you in the purchase of a property to order searches on your behalf from a variety of sources.
Search suppliers
These searches will include information held by your local authority on a variety of matters such as planning applications and road information; environmental search company data on issues such as ground movement, contaminated land and flooding; water company information about mains supplies, pipe work and drains.
In addition there may be specialist searches on coal mining in the area, chancel repair liabilities for the local church roof, a new housing development two miles away that will stretch local infrastructure – the list goes on.
Mortgage lenders
The role of your lawyer is to obtain all and any such searches that may be appropriate for the property you are buying and make sure you are aware of any issue(s) that could influence your decision to go ahead.
In addition there may be restrictions that your mortgage lender will apply in respect of certain issues or risks, and this may cause a problem with the purchase. For example, if a property is in an area that is rated as a high flood risk, it may limit the ability to obtain buildings and contents insurance which is always a condition of lending.
Historical data
The reports are not just for lawyers however. They can make very interesting reading for home buyers too. Putting aside the highlighting of serious threats, some searches include historical maps revealing past land uses, and others include interesting local area information that can provide helpful insights into the area around you.
Planning reports
Don’t forget that your lawyer is buying these reports to cover legal risks and liabilities, but you may want to find out more. For example, the standard search on planning simply asks about planning applications in relation to adjacent properties, but if you want to know more about the future development plans in your area – including houses two doors up, or the nearby streets, or public spaces, then you can buy a planning report. As this is not a legal requirement, many lawyers do not bother, but as a homebuyer, make sure you request the information you need.
In many instances, whatever the outcome of the search, buyers will decide they still wish to go ahead with the property purchase, perhaps obtaining a reduction in the asking price as a result of the information that has come to light. The important thing, however, is that you are making an informed decision with no nasty surprises once you have moved in.
Appropriate searches
So how do lawyers decide which searches to order on behalf of the buyers that they represent? This was once more of an art than a science, but these days specialist search companies generally offer a service to lawyers that recommends what searches are appropriate for which location. For example, if there has never been a coal mine in the area it is not worth getting the requisite search, and if the property is not in London there is no need to find out about tube lines running under the property.
Local authorities and specialists
The two main sources of searches are local authorities and specialist search companies. Both provide what is known as the ‘Standard Enquiries’ (or the LLC1 and CON29 to get technical for a moment) which contains information sourced from council records.
Private search companies can be quicker and cheaper then going to the council direct, and provided that the search company is regulated by the Search Code, they are no less reliable, and provide a better level of redress.
Search Code
The Search Code is a quality assurance code, like ABTA for travel agencies. The Search Code provides homebuyers and property professionals with peace of mind as to the quality and reliability of the search. Each search is backed up by professional indemnity insurance and in the unlikely event that things go wrong you can appeal to the Property Ombudsman.
The Search Code has been protecting consumers and property professionals since it was launched in 2006. It is testament to its value that lawyers and lenders attach so much importance to it and home buyers can be confident in the quality of information on which they are relying where they see the Code logo.
Buying a home is normally the biggest single purchase that we make in our lifetime and it is vital that we do so on a fully informed basis. So if you ever wonder what the charge for searches represents when you look at your completion statement from your lawyer, you should be assured that it is probably one of the best investments that you have made in the process of buying your new home.
[box style=”2″]
Is your new home safe and fit for living in?
David Parton, partner at national law firm Shoosmiths, comments on conveyancing and searches.
For the last 25 years conveyancers have adopted the Law Society’s Conveyancing Protocol and this has gained greater traction as a cornerstone of the Law Society Conveyancing Quality Scheme (CQS). The CQS is a recognised quality standard for law firms working in residential conveyancing.
With this scheme the seller only has to answer those enquiries specifically set out on the Property Information Form and which the Law Society considers a lay person should reasonably be expected to answer. Sellers are not obliged to answer information that forms a matter of public record or requires expert opinion; however, the caveat emptor (Buyer must beware) principle still applies.
Mortgage lenders place the onus in their instructions to conveyancers to ensure that all usual and necessary searches are carried out taking into account the location of the property. This is combined with their expectation that conveyancers ensure all necessary planning and building regulations consents have been obtained, and that there is no evidence of breach likely to lead to enforcement action. This is amongst the greatest responsibilities leading to ordering a standard form search of the local authority’s records.
Although one could consider contingency insurance against these risks, the purpose of the statutory permissions and certificates is to re-assure a buyer that the property is fit for purpose and safe to live in, which is preferable to an insurance ‘sticking plaster’ against the risk of enforcement.
The Land Charges section of the local search result should also reveal any charges against the property benefiting the local council, perhaps requiring repayment on the sale of the property (for example a building works grant). The status of the fronting road is also confirmed to establish who is liable for its maintenance.
Further data sets are increasingly available to discover issues about:
- Planning permissions covering a wider area surrounding a property (which the local search alone does not provide);
- Environmental information concerning matters such as historic mining areas with potential subsidence risk, or contaminated land or flooding;
- Energy and infrastructure information is also now available on matters such as HS2 and wind or solar farm proposals.
While it is not necessary to order every available search on each housing transaction, a conveyancer should consider these further searches with the buyer and order as appropriate. Buying a home is the largest purchase that consumers make and it is important that they fully research their purchase proposal prior to legal commitment to avoid later regrets or paying over the odds with outstanding problems to resolve.
[/box]
