RE - Searches and Enquiries - Headline Notes PDF

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4. Real Estate – Headline Notes Searches The following searches are recommended in every transaction: 1. Local land charges register LLCR; 2. Enquiries of local authority CON29 3. Additional enquiries of local authority CON29O; 4. Pre-contract enquiries of the seller; 5. Water and drainage enquiries; 6. Environmental searches and surveys; and 7. Personal inspection. The following searches are only required in some transactions: 1. Chancel repair search; 2. Land Charges Department search against sellers name (unregistered only); 3. Bankruptcy Search 4. Company search; 5. Flood search (arguably should be in list above); 6. Index Map search; 7. Location specific searches 17.16; and 8. Survey reports. ‘MUST DO’ SEARCHES 1. Local Land Charges Register (LLCR) [17.5] Local land charges are either financial or place restrictions on the land which have been imposed by public authorities under statute. They will often not be apparent from an inspection of the property or an inspection of the title. A LLCR search must be ran in every transaction. They will bind a buyer. Examples of what the LLCR will reveal: a) financial charges (e.g, for adoption of estate roads; see 42.2.4); b) tree preservation orders (which prevent the protected tree(s) being felled without permission); c) smoke CPOs (which make it lawful for an acquiring authority to take steps to acquire the land without the owner’s consent); d) planning permissions granted; e) any restrictions on permitted development (eg, ‘Article 4 Direction’: see 7.1.4.3); f)

orders revoking or modifying planning permissions;

g) conservation area designation orders made since 31 August 1974. Orders made prior to that date will be revealed by the replies to the enquiries of the local authority (CON29, Enquiry 3.11; see 17.6); h) listed building status (this can also be checked with English Heritage, particularly if the property may have been recently listed, as the local authority may not yet have made an entry on the local land charges register).

Note: Where a person suffers as a result of an error in an official certificate of search, compensation may be payable under s 10 of the Local Land Charges Act 1975.

2. Enquiries of Local Authority (CON29) [17.6] The enquiries in a CON29 are relevant to every transaction and must be conducted in every case. A fee is payable to the LA and varies by constituency. Examples: (a) Enquiry 1 - planning and building decisions and pending applications; (b) Enquiry 2.1 – whether roads serving the property are maintained at public expense;

a. CONSOLIDATION LECTURE FOCUS (c) Enquiry 2.2 – whether the property is crossed by a public path/bridleway; (d) Enquiry 3.4 and 3.5 – whether there any new roads and railways (or similar) proposed within 200m; (e) Enquiry 3.6 – whether there are any proposals for permanently stopping up roads/footpaths; (f) Enquiry 3.8 and 3.9 - contravention of building regulations or whether planning enforcement/stop notices have been issued; (g) Enquiry 3.11 – whether the property is made up of any conservation areas; (h) Enquiry 3.12 – whether there are any proposed CPOs;

(i) Enquiry 3.13 – whether any notices have been served in respect of contaminated land; and

(j) Enquiry 3.14 – whether the property is in an area affected by radon gas.

3. Optional Enquiries of Local Authority (CON29O) The enquiries in a CON29O are more specialized than the above. Not all of the available searches will be required in each transaction, and should only be implemented if warranted by the circumstances. This is particularly the case as there is an additional fee for each individual search ran. Examples: 4. Road proposals by private bodies 5. Advertisements 6. Completion Notices 7. Parks and countryside 8. Pipelines

13. Inner urban improvement areas 14. Simplified planning zones 15. Land maintenance notices 16. Mineral consultation and safeguarding areas 17. Hazardous substance consents 18. Environmental and pollution notices 19. Food safety notices 20. Hedgerow notices

9. Houses in Multiple Occupation 10. Noise Abatement 11. Urban Development Areas 12. Enterprise Zones, Local Development Orders and BIDs Attach explanatory sheet from CON29O Note: if a particular required search is not caught by the prescribed searches, it is possible to attach a typed piece of paper to the CON29O setting out the query. However, some constituencies refuse to respond to written questions.

BEAR IN MIND: The above searches only consider the actual property in consideration and do not provide results on adjoining land which does not directly affect the property. Thus, if a new supermarket is being built at the rear of the property this will not be shown on these searches.

4. Pre-contract enquiries of the seller [17.7] These are the enquiries put directly to the seller and ought to be done in every transaction. The main purpose of this is to draw out as much information from the seller as possible, particularly information that the seller is not duty bound to disclose. In residential property the seller’s solicitor should have his client complete a Property Information Form (TA06), or a Leasehold Information Form (LPE1). These are written in layman’s language allowing the client to complete it independently. The solicitor should then go through the form to ensure the answers are correct. In commercial property the Commercial Property Standard Enquiries (CPSE) has been drafted to introduce a standardized method of enquiry in commercial transactions Examples of queries: (a) Boundaries (b) Adverse rights (c) Access to the property

(d) Fire safety

(e) Building regulation/planning compliance

(f) VAT status of the transaction

Further CPSE forms may be used for the following: CPSE 2 for use on the sale of property subject to tenancies; CPSE 3 for use on the grant of a new lease; CPSE 4 for use on the assignment of a lease; and CPSE 7 for a shorter alternative use to the usual CPSE.

5. Water and Drainage Enquiries (CON 29DW) [17.8] This search reveals whether: (a) whether the property has foul water drainage to the public sewer; (b) whether the property has surface water drainage to the public sewer; (c) whether there is a water main, public sewer, disposal main or lateral drain within the boundaries of the property; and (d) whether the property is connected to the public water supply In the case that a property does not drain into a public sewer, it is the responsibility of the buyer.

6. Environmental Searches and Surveys This is to determine whether the land is contaminated. Contamination is a particularly serious consequence as there are dangers associated with contamination, along with the potential liability to clean up the contamination. This is particularly necessary where the property is near a landfill site, or there are factories in the area discharging hazardous substances. The textbook suggests this is required in all land purchases, including all residential houses. In commercial transactions, this is particularly relevant when acquiring a greenfield or brownfield site. IN PRACTICE, the first step would be to undertake a desktop study of environmental searches to analyse the risk of any possible contamination. IF THEN, the property shows there to be a possible risk of contamination, it may be appropriate to instruct an environmental survey. Test and Feedback: “As part of the planning application process, a developer will be required to show the relevant local planning authority ('LPA') whether the relevant land is suitable for the particular development proposed (or can be made so by remedial action). Where necessary, the LPA will impose conditions on any planning permission requiring that necessary remedial action is undertaken before the development can be begun”.

7. Personal Inspection [17.16] Inspection of the property should be undertaken by the client in all cases. There is no obligation on the solicitor to undertake an inspection in every case, but should do if requested by the client or in the case of a discrepancy.

‘MIGHT DO’ SEARCHES 1. Chancel repairs searches Certain properties in certain parishes could be under an obligation to pay the cost of repairing the chancel of the parish church. The costs associated with a chancel repair liability can be considerable (£186,000 in the case of Aston Cantlow and Wilmcote with Billesley Parochial Church Council v Wallbank [2003] UKHL 37). This liability may not show on the title deeds or be known to the seller.

If no transfer of value has occurred since 12 October 2013 then it would be advisable for the buyer’s solicitor to carry out a screening search to ascertain whether the property is within a liable parish. For this liability to survive a transaction made after this date, it must be protected by notice. If a transfer for value of the property on or after 13 October 2013 has occurred, the buyer should not be bound by a chancel repair liability unless a notice has already been entered on the registers of title. This is slightly different for unregistered land (see 17.10.2).

2. Central Land Charges Department Search – UNREGISTERED LAND [17.11] A Land Charges Department search must be made in every case dealing with unregistered land. It is preferable to undertake this search prior to exchange to pre-empt any potential problems, and give time for remedy. This search is made by submitting a K15 form to the Land Charges Department in Plymouth, or electronically. Instead of searching against the land, this search goes against the names of the estate owners. A fee is payable per name searched. The search should include names from: i. ii. iii.

whose names appear on the abstract or epitome of title supplied by the seller including those who are merely referred to in the bodies of deeds (as opposed to being parties to the deeds themselves); or in schedules attached to deeds which form part of the title.

3. Bankruptcy search [17.12] If a solicitor is acting for both the buyer and the lender it will be necessary to conduct a bankruptcy search. This is the case with both registered and unregistered land. K15 Form for unregistered land; and K16 Form for registered land. It is usual to conduct this search immediately before completion. However, it is recommended to do a preliminary search prior to exchange in addition to the later search.

4. Company search [17.13] With unregistered land company searches should be carried out against any companies revealed as estate owners within the epitome of title. With registered land, a company search should always be carried out against a corporate seller. This search should be carried out prior to exchange. This search ensures: 1. The company is solvent; 2. The company has the power to sell; and 3. Whether there are any charges over the property.

5. Flood search [17.14] 2.8 million homes are at risk of surface water flooding, which arises where heavy rainfall overwhelms the drainage capacity in an area. Flooding can also occur when sewers become blocked (‘sewer flooding’) or when underground water levels rise above surface level (‘groundwater flooding’). On 23 May 2013 The Law Society issued a practice note on flood risk. The advice given includes the following: (a) In all conveyancing transactions, the solicitor should mention the issue of flood risk to his client and, if appropriate, make further investigations. (b) A solicitor should consider advising a buyer to do the following before exchange of contracts: a. Establish whether insurance for flood risk is available and, if so, on what terms and at what cost. A Government-backed scheme known as ‘Flood Re’ ensures that flood cover is provided for most residential properties. Certain property (such as commercial property, buy to let properties, residential property built since 1 January 2009 and blocks of flats) is not covered by the scheme and, where such excluded property is at risk of flooding, insurers may charge high premiums or excesses, or decline insurance entirely. b. Discuss the level of flood risk with his building surveyor or, if necessary, a flood risk consultant.

If, after discussion with the client, further investigations are deemed appropriate (or if they are required by a lender), the following should be considered. A free search can be carried out on the environment agency website, but this cannot be relied on solely. A commercial flood search should be discussed with the client on every transaction.

6. Index Map search [17.15] The LR keep an electronic map based on the OS map which provides an index of - every registered title; and - every pending first registration. This should always be carried out with unregistered land. Arguably, there is no need to conduct a ‘SIM’ if the land is registered as it will not garner any new information. It may be prudent to carry out a SIM with registered land if: (a) the buyer is buying more than one registered title (to ensure no part of the acquired land does not fall into a title number not included); or (b) if mines and minerals are excluded from the title, as a SIM will identify whether those mines and minerals have a separate title. This allows the buyer to learn the identity of its owner.

7. Location specific searches [17.17]

The buyer’s solicitor should be aware of any features of the property or its location which indicate that one of the less usual searches may be appropriate to the situation. A solicitor who fails to carry out a relevant search in circumstances where he should have done so may be liable in negligence to his client (see G & K Ladenbau (UK) Ltd v Crawley and De Reya [1978] 1 All ER 682). Mining Searches (CON29M) [17.1] A coal mining search should be carried out if the property is located in a coal mining claim area. This will be indicated by The Law Society’s Coal Mining Directory. Bear in mind the following areas: (a) (b) (c) (d)

tin in Cornwall, Devon and Somerset; clay in Cornwall, Devon and Dorset; limestone in Dudley, Sandwell, Telford, Walsall and Wolverhampton; brine and salt in Cheshire.

Common Land – TVG [17.2] In recent years a number of applications have been made to register land as a TVG (including applications relating to a beach and a skate park), in order to prevent development of them. A search can be made of the registers of common land and TVGs by ticking the box for Enquiry 22 in the Enquiries of the Local Authority Form CON29O. This should be done where the property: (a) abuts a green; (b) abuts a common land; or (c) is separated by a verge strip not owned by the property. Exempted areas include the New Forest and Epping Forest as well as a number of urban recreational commons Becoming a must do. Land Adjoining Canals/Rivers [17.3] Make an enquiry to Canal and River Trust (CRT) to check there is no obligation to contribute to: - maintenance of waterways - banks - associate towpath (canal) - flood defence structures It will also check if there are any proposals relating to the waterway, or any statutory rights benefitting the waterway Railways Network rail no longer take specific searches so any issues must be raised in requisitions to the seller.

Buyer should be advised that Network Rail have a statutory right of access to adjoining properties to carry out repairs. Network Rail should be contacted before carrying out any building work next to the railway line as there may be limitations. Searches can also be made to: - DLR - London Underground - Crossrail - Newcastle metro

Highway Authority CON29 2, 3.4, 3.6 will provide certain information on whether roads are adopted. However, this information may be limited in respect of pavement and verges. Enquiries should be made if there are: - Verges between the property and road; or - The property is to be redeveloped into a different configuration Such land may be in third party ownership if not publically adopted causing an expensive ransom strip. Enquiries are made informally by writing to the Highways agency with a detailed copy of the plan asking them to mark the specific boundary....