Article | Fabulous Women

The Mystery of Property Searches Explained: What they are and why we do them

Posted on 22/01/2013

Gemma James, a Partner in the Property Department of Mundays LLP Solicitors investigates the mysteries of the Property Search.
To Search or not to Search?
If you are buying or mortgaging a property, the chances are that your Conveyancer or Mortgage Broker will refer to the need for Property Searches to be carried out a concept which is probably alien to the ordinary human being and frustrating in that it incurs further costs and delay in the progress of a transaction. If you are obtaining a mortgage, your Lender will usually insist on at least the most basic of searches being carried out, or sometimes will accept you taking out an indemnity insurance policy instead (which will provide cover in the event that a problem later materialises which impairs the value of the property and would have been revealed had a Property Search been carried out). Your Conveyancer can apply for Property Searches, or arrange an appropriate insurance policy if applicable, and will be obliged to do so where this is your Lenders requirement.
If you are not obtaining a mortgage, your Conveyancer should give you the option of whether to apply for some or all of the searches which are relevant to your property.   Lenders require the searches to be carried out because they can reveal important factors which affect the value of the property and consequently of their security. Where you have no mortgage, it would in theory still be preferable to obtain all applicable searches so that you can properly decide whether you are making a good investment. Against this are the factors of cost and time to be considered, particularly if you require to proceed urgently and/or are only taking a short or inexpensive Lease of the premises. Information about some of the main types of searches is given below to help guide you through this maze of legal jargon and enable you to make a more informed decision in the event that you have the option of applying for property searches. Searches are considerably more expensive for commercial as opposed to residential premises.
Searches Explained
The principal Property Searches are:-
i.Local Search : to find out about local development plan provisions, maintenance of roads, road schemes, outstanding notices against the property (such as breaches of planning or environmental legislation which the property owner would have to rectify), planning and building regulations consents and conditions, compulsory purchase orders, traffic schemes, road closures, restrictions on advertisements and general information held by the Local Authority relating to the property. Additional standard optional enquiries can be raised within this search also, where relevant, such as to ascertain whether the land has been designated as common land or a town/village green (thereby preventing your exclusive use and development of it). A local search will not give details of planning applications which do not relate to the property itself. The cost of this search varies between Local Authorities, but their fees are typically in the region of 250 to 350 for a commercial property as opposed to 150 - 250 for residential. The time taken to process Local Searches can vary dramatically between local councils, depending on their workload, and whilst the majority produce results within a week or two of an application being submitted, there is no guarantee that this will be achieved. An alternative accepted by some lenders is to obtain a Personal Search, which asks the same questions as a Local Search but is carried out by a professional agent visiting the Council offices to peruse its records in order to put a search result together. Since this is not an official search result from the Council itself, it is often considered as being more likely to contain inaccuracies, although these searches are usually backed up by an insurance policy to provide protection in the event that inaccuracies lead to future loss. If a full Local Search is likely to take too long for your timescale, then a Personal Search can sometimes be a quicker alternative.

ii.Environmental Desktop Survey : this will reveal the probability of the site being affected by contamination and the sensitivity of any possible receptor of the contamination on, adjacent to or in the vicinity of the property. If the land is affected, you could potentially be liable to extensive remediation costs and enforcement action can be taken by the local authority against you even if the damage was caused by a previous owner. The typical cost of this search is usually under 100 for residential but closer to 200 for commercial premises although this will vary depending on the size and historic uses of the site. A Desktop Survey is produced electronically by an independent search agent based on general computerised historic records for the site. It is typically available within 48 hours after an application has been made. If any risks are revealed, then you will be able to make further enquiries and/or commission an on-site ground survey for a more in-depth analysis.

iii. Chancel Repairs Search : the basic form of search usually costs approximately 18 (regardless of residential or commercial usage) and indicates whether the property could possibly be liable for the costs of repairing the local Parish. This issue has been highlighted by recent cases in the news and the liability imposed by the Church on the owners of affected properties can be considerable (the highest amount recorded to date was 186,969 plus costs). This is an historic right that some (but not all) Churches can rely on. The basic search is usually available within around 48 hours, as the search providers use computerised records to ascertain whether the property carries a risk of liability. If the basic search reveals a risk, then you (or your Lender) have the option whether to take out indemnity insurance to protect against any future costs that may be incurred. This is typically the quicker and cheaper method, as opposed to carrying out a full definitive Chancel Repairs Search, which would say with certainty whether the property will be liable for Chancel Repair costs, but it will cost at least 100 and, if liability is revealed, then it would become far harder to obtain indemnity insurance.
iv.Water and Drainage Search : to obtain a map of and connection information relating to the water mains and sewers around the property. The search will also ascertain the extent to which the property owner is responsible for the drains/sewers that service the property, although the information held by the water authorities is currently being updated following the transfer of ownership of private sewers and lateral drains to the water authorities pursuant to the Water Industry (Schemes for Adoption of Private Sewers) Regulations 2011. The search fees vary between water authorities, but are typically in the region of 140 for a commercial and 65 for a residential premises. The turnaround time depends on the workload of the particular water company, but a result can usually be expected within days or a small number of weeks.
v.Flood Report Search : to reveal details of any history or projected flooding problems at the property, together with an opinion as to insurability. This search usually costs in the region of 144 for commercial premises and 25 for residential premises. It is a computerised desktop search, which the search provider can usually produce within a few days.
vi. Highways Search : to clarify the boundaries of the public highway (and thereby ensure no third party land has to be crossed to access the property), give details of any planned improvements and check the property is not subject to any public rights of way. This search would typically costs 135 for commercial and under 100 for residential premises, but charges may vary according to which authority is responsible for the roads in the vicinity. As with the Local Search, the time taken will depend upon the processing speed of the particular Local Authoritys Highways Department.
vii. London Underground Search : to assess the vicinity of underground tunnels, proposed works and impact on the property. This normally costs approximately 260 for commercial premises and under 200 for residential and is clearly only applicable to properties in London. Again, depending on the location of the land, other transport searches might be applicable for the same reasons, such as Crossrail and Docklands Light Railway.
viii HS2 Search : for areas potentially affected by the new High Speed Rail Link. This will show all rail features, including tunnels and viaducts within 5,000 metres of the property and answers key questions, such as whether the route will affect the property, whether the route is in a tunnel, in a cutting, at ground level or on a viaduct and what the distance is between the property and features like tunnels. This search will cost approximately 18 and your Conveyancer will be able to advise you whether it will be relevant to your transaction.
ix. Mining Searches : depending on the area in which your property is located, there may be further specific mining searches which can be relevant, such as for coal, tin, shale, clay and limestone. All of these searches will provide information as to whether the property is or is anticipated to be affected by such activities and thereby potentially be at risk of impact on its value or impairment of its use or occupation, particularly where subsidence can be a factor. The processing time and price of these searches will depend upon the policies of the mining authority in question.
Your intended use of the property will also impact on the relevance of the searches. For example, if you intend developing on the land, searches from service providers (such as telecommunications, gas and electricity) can reveal the location of the routes of current services and thereby assist in your development plans and discussions with them in order to ensure that sufficient services will be available for your intentions.
Buyer Beware
Whilst this article has only summarised the principal property searches, it aims to demystify them and assist you in the event that you are given a choice of whether to apply for all or any of them. Ultimately, your Conveyancer will be able to guide you through this process, but you should be aware that whilst they sound like a slow and costly idea, they can be as important as obtaining a structural survey in safeguarding you against the financial and practical risks of dealing with property.
Gemma is a Partner in the Property department at Mundays LLP. See her profile at the link below.

www.mundays.co.uk/people-3/gemma-james/

This document is for information only, it does not intend to provide legal advice. Mundays accepts no responsibility for loss which may occur from reliance on information contained in this document.

 

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