#10254 - Pre Contract Searches - Property Law and Practice
Why do the searches?
Because, when the buyer purchasing property the principle of caveat emptor applies (Let the buyer beware — emphasising that it is the buyer’s responsibility to discover problems with the property, not the seller’s to disclose them). Thus, the Solicitor carries out the investigation (Due Diligence) so that the client has as much info as possible and can enter the transaction eyes wide open.
Seller’s duty to disclose is limited, so further searches are necessary to protect the buyer (even when a Pre-Contract Package has been provided by the seller)
If solicitor doesn’t make them, they could be liable for professional negligence
When do the searches?
To satisfy the buyer’s lender, all should be made not more than 6 months before completion
In practice, it will usually be 2 months before completion
What searches to make?
| Always (explain why the search is required) p167 | Unregistered | Fact Dependent (explain why required) |
|---|---|---|
(LLC1 + CON29R + CON29O are usually submitted together) |
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What to do with the Results?
You must pursue unsatisfactory results or face liability (Computastaff) and check with the client’s instructions
You must pass on the results to you client
A buyer has imputed knowledge of everything that his solicitor knows (Strover v Harrington (1998))
Common scenarios:
| Property built within last 10 years |
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|---|---|
| Access to Property |
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| Occupiers |
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New Estate Roads & Drains
These are unadopted private roads
Likely to be adopted by the Highways Authority (but may not be)
Ensure a contract clause that the developer will make and maintain roads up to the LA standards until such point as they may be adopted, at no cost to the buyer
If developer goes insolvent, buyer could become liable for costs of adoption, so ensure there is a s.38 agreement supported by a sufficient financial bond between HA and the developer
For drains, it is a s.104 agreement
| Search | Purpose | Procedure | Info Obtained | Liability |
|---|---|---|---|---|
| Pre-contract enquiries of the Seller (Residential Property) p171 | To elicit information from seller he’s not required by law to disclose, mainly about defects and neighbour disputes. Seller can refuse, but this would put off the buyer | TA6 PIF (freehold); TA7 PIF (leasehold) and pre-contract package submitted to seller. Delete any irrelevant questions and can add unique questions. |
| p171 & 172 *Misleading reply could lead to misrepresentation. * Exclusion clauses are subject to reasonable test in UCTA 1977. Solicitor is liable to client (CEMP Properties UK Ltd v Dentsply RDC N1), not the buyer (Doe v Skegg). *It is common for the seller’s solicitor to answer enquiries vaguely with the intent of avoiding any possible liability for misrepresentation (e.g. ‘Not so far as we are aware’ or ‘Not so far as the seller is aware’). |
| Pre-contract enquiries of the Seller (Commercial Property) p172 | “ ” | (CPSE) Commercial Property Standard Enquiries. | CPSE Form 1 (always)
Forms available in addition to CPSE Form 1
| |
| LLC1 Local Land Charges Search p167 | * To access information kept on the Local Authority’s Local Charges Register * Reveals matters which fall within the statutory definition of local land charge (e.g. PP granted) | Submit Form LLC1 of all 12 parts, fee and plan to the borough in which property is registered You will receive a back a certificate with entries |
| If buyer suffers loss because of an error in the certificate, may receive compensation under s.10 LCA 1975. You must advise buyer on the meaning of the information obtained |
| CON29R (Local Authority Enquiries) p168 | Get a more complete picture of property and its surroundings *reveals a wider range of information and are not restricted to land charges (e.g. planning applications made including refusals) | Tick relevant questions to be answered and submit 2 copies and fee by post to district where the property is registered | 1: Granted, pending or refused Planning Permission (PP) or Building Regulation (BR) 2: Whether serving roads are maintained at the public expense (if not, then buyer is liable for maintenance and upgrading them) 3.4 & 3.5: any new roads or railways proposed within 200m 3.6: Any proposals for changing use of roads or footpaths, etc. 3.9: whether any notices have been served and complied with in relation to PP breaches 3.11: any proposed CPOs 3.12: whether any notices have been served in relation to contaminated land | Subject to the reasonableness of the exclusion clause on the front of the page, the LA would be liable for giving wrong information * If buyer suffers loss, subject to the validity of the exclusion clause printed on the front sheet of the search application form, a local authority could be sued in negligence for an erroneous reply to the printed enquiries. |
| CON29O (Optional Local Authority Enquiries) p169 | *reveals a wider range of information and are not restricted to land charges (e.g. planning applications made including refusals) | 5: does a bridleway or footpath cross the property? 19: have any environmental or pollution notices been served? 22: is the land or adjoining land registered as common land or as a village green? | * If buyer suffers loss, subject to the validity of the exclusion clause printed on the front sheet of the search application form, a local authority could be sued in negligence for an erroneous reply to the printed enquiries. | |
| Chancel Repair Search p174 | Largely to protect the solicitors against professional negligence claims | Search online at ChancelCheck to see if property is liable. Also make personal search at the National Archives in Kew | Find out if the property has an obligation to pay for repairs to the parish church | Until October 2013, it is an overriding interest. After October 2013, it will only be binding if: it is protected by an entry (for registered) or a caution has been entered (for unregistered) |
| Water & Drainage (CON29DW) p173 | Whether property has: * foul water & surface drainage to public sewer * connection to public water supply | Submit Form CON29DW to the relevant water company |
| Buyer would be liable for costs of maintenance or of bringing them up to standard for adoption. Query whether an easement of use would be needed. |
| Environmental Search | To assess risk and avoid potentially expensive clear-up costs for client | No environmental search exists. Go to professional search provider who will go to several different desk-tops to assess the risk. Ask environmental consultant to take soil sample | Whether previous industrial usage has contaminated the land | Depends on the contract with the search providers, but likely will be misrepresentation. | |
|---|---|---|---|---|---|
| Index Map Search | Unregistered Land: This is made at the LR using Form SIM along with the plan of the property and requisite fee. It will reveal whether the land is registered, an application is pending or there is a caution against first registration. | ||||
| Land Charges Department p175 | Unregistered Land: Form K15 and requisite fee at the Land Charges Dep. at Plymouth. It should be made against the name of each previous owner of the property. Used to spot problems with ownership (bankruptcy, estate contracts, FLA rights) prior to exchange and just before completion against the seller’s name. Buyer gets a 15 day priority period in which to complete. | ||||
| Bankruptcy | To search against the Buyer’s name where you are also acting for the lender to make sure buyer is not subject to bankruptcy proceedings | Registered: K16 ... |
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