Chapter 4: Pre-contract searches & enquiries Flashcards

Question

Standard enquiries of the local authority (Form CON29) -

Answer 1

The local authority gives replies based on its records as to various matters such as planning and building regulations, roads and public rights of way.

Answer 2

These are usually only ticked in specific circumstances, such as the commons search (enquiry 22)

Answer 3

Each local authority keeps a register of local land charges. Local land charges may require the payment of money (such as to bring a road to adoptable standard) or may affect the use of the property (such as a listed building status)

Answer 4

Will reveal information about the property and its immediate surroundings, such as: * planning consents, refusals and completion notices * building regulations * roads and public rights of way (such as footpaths) * environmental notices (including contaminated land notices)

Answer 5

* common land and town or village green (land which is designated for communal use is very restricted) * road proposals by private bodies * areas of outstanding natural beauty and national parks * pipelines * noise abatement zones

Answer 6

There are 12 parts to the land charges register which will reveal matters such as: * planning permissions that have been granted * planning enforcement or stop notices * article 4 directions (restricting the General Permitted Development Order) * tree preservation orders * smoke control orders * financial charges such as road-making charges * conservation areas * listed building status

Answer 7

Questions about drainage and water specific to the property are dealt with by the relevant water service company for the area. For example, in Leeds, the search would be raised with Yorkshire Water.

Answer 8

The search checks matters such as whether foul and surface water from the property drain to a public sewer, and whether the property is connected to a mains water supply. Form CON29DW enquiries (residential property) or CommercialDW enquiries (commercial property) are submitted to the relevant water company.

Answer 9

An environmental search should always be considered. This is because an owner may be liable for the costs of cleaning up contaminated land, even if they have not themselves caused the contamination

Answer 10

Some information is given in the local search, but only whether notices have been served. A desktop search is based on historical records and will indicate if the property has been used for potentially contaminative land uses (for example, industrial).As it is based on records, it may miss issues such as illegal dumping of waste. It also contains information on the likelihood of flooding and susceptibility to natural subsidence, and industrial land uses within 250 metres of the property

Answer 11

Chancel repair liability affects properties in parishes where there is a pre-Reformation church. Responsibility for repair of the church roof was shared between the church and the parishioners. It can be very expensive if the parish church claims this. This search is therefore usually carried out as standard, and if the search shows the potential for liability, indemnity insurance is readily available to cover the risk.

Answer 12

The local search (specifically CON29) will show whether roads included in the search are adopted highway (ie, maintained by the local authority at its expense for public use). For most residential properties, this will usually be sufficient, as it will be clear that the property immediately abuts the highway. However, where there is any doubt, or for most commercial properties, a highways search is needed.

Answer 13

The highways search shows the boundary of the public highway on a map. If the results show that the property does not immediately abut the highway, then it will be necessary to ensure that there are appropriate rights of access.

Answer 14

When property falls within an area that could be subject to coal mining. Areas affected by coal mining are listed in a gazetteer, which is freely available. The search identifies the risk of subsidence, and whether any compensation has already been paid (which will mean no future compensation can be paid).

Answer 15

When property falls within an area that could be subject to brine subsidence (parts of Cheshire) Similar to coal mining search (and some search companies incorporate it in the coal mining search) Similar to coal mining search (and some search companies incorporate it in the coal mining search)

Answer 16

Similar to coal mining search, but specifically for the minerals indicated. Like other mineral searches, it is dependent on area (eg, there were tin mines in Cornwall and Somerset)

Answer 17

This is more detailed than the standard desktop environmental search and includes a site inspection.

Answer 18

This will be taken where Phase 1 study indicates risk of contamination. Soil/water samples are tested to indicate whether there is contamination or not.

Answer 19

Where property is known to have flooded in the past. Desktop flooding search goes into more detail than desktop environmental search.

Answer 20

Where property is a new development or a site for development. Checks that the property has the benefit of utility connections (electricity, gas, telecom, broadband, etc)

Answer 21

Where a railway passes near the property or property may be within proximity of proposed railway. There is no standard railway search, but specific enquiries may be made of Network Rail or the relevant railway company (London Underground, Crossrail, HS2, etc) about such issues as access rights across the property.

Answer 22

Where property has a waterway (river or canal) passing through or next to it. Search shows liability for maintenance of river bank or canal, rights of way for banks and tow paths, drainage and fishing rights, and owner’s liability for flooding (but this search does not provide an assessment of flood risk)

Answer 23

Some searches relate to the title or the seller. These are no less important than other pre-contract searches, but it is helpful to keep them distinct in your mind as they form part of your investigation of title.

Answer 24

Where the property is unregistered, or comprises more than one title (registered or unregistered) or the registered title refers to mineral rights. The index map search shows the extent of registered titles and unregistered land within the area searched. It does not show ownership, and the official copies must be ordered if this information is required.

Answer 25

The Land Registry portal contains a free searchable map of registered titles. It is a useful reference tool, but unlike an index map search, the Land Registry do not guarantee the result.

Answer 26

Where the property is unregistered, the central land charge search is carried out against the full names of the seller and all previous owners referred to in the epitome of title (refer to notes on investigating title)

Answer 27

This is usually only carried out against the seller if the transaction is not at full market value. This is also carried out at the Central Land Charges Registry. It is carried out against a buyer taking a mortgage.

Answer 28

If the seller is a company, then a company search should be made to check that the company is in existence, and has not gone into liquidation or been dissolved. This also shows security interests that the company has given

Answer 29

Where the property is unregistered, the central land charge search is carried out against the full names of the seller and all previous owners referred to in the epitome of title (refer to notes on investigating title)

Answer 30

* Standard pre-contract enquiries and standard searches should be raised in every transaction * Optional searches may be appropriate in certain circumstances * Title and seller searches may be appropriate depending on the particular title and seller * Additional enquiries will usually be raised as the matter progresses

Answer 31

Development: ‘This means carrying out of certain building works on land or a material change of use of the land (s55, Town and Country Planning Act 1990)

Answer 32

Planning permission is needed whenever there is development on land, unless it falls within certain exceptions, such as: * building works that only affect the interior of the building; or * building works that do not materially affect the external appearance of the building; or * changes of use that are within the same use class (s3(1), The Town and Country Planning (Use Classes) Order 1987

Answer 33

The use classes are defined in the Town and Country Planning (Use Classes) Order 1987 * The use classes are grouped by letter and subdivided by letter or number * Examples of the original classes were A1 (shops), A2 (financial and professional services), A3 (food and drink), B1 (business), B2 (general industrial), C1 (hotels), C3 (dwellinghouses), D1 (non-residential institutions) * A change from one use class to another, such as C3 to C1 or C3 to B2, requires planning permission

Answer 34

* Some uses are sui generis, meaning that they do not belong to a use class - this means that any change to or from that use will require planning permission * The use classes were amended in 2020 to remove certain use classes within groups A, B and D, and introduced classes E (commercial, business and service), F1 (learning and non-residential institutions) and F2 (local community). Some of the more important new use classes are shown on the table below

Answer 35

General industrial

Answer 36

Residential Institutions

Answer 37

Dwelling Houses

Answer 38

Commercial, business and service – this is a wide use class, including retail of goods, food, professional services to the public, etc

Answer 39

Learning and non-residential institutions

Answer 40

Local community

Answer 41

* theatres * amusement arcades * launderettes * fuel stations * pubs and nightclubs * takeaways where food mostly consumed off the premises * concert halls As well as recognised sui generis uses, any use that does not fit within a use class will be treated as sui generis

Answer 42

The Town and Country Planning (General Permitted Development) Order 2015 (known as the ‘GPDO’) allows certain development without planning permission. It operates like a general planning permission. Permitted development will need to fall within the conditions set out; otherwise, planning permission will be needed.

Answer 43

Decking is permitted in a residential garden providing it is no more than 30 cm above the ground, covers no more than half of the garden area, and is to the back of the house

Answer 44

The GPDO can be excluded or amended in a locality by an Article 4 Direction, in which case the proposed development will need planning permission If proposing to rely on the GPDO, therefore, an enquiry should be made of the local authority whether the GPDO has been excluded. This enquiry is part of the local search.

Answer 45

If unsure whether a development falls within the GPDO, it is possible to apply for a certificate of lawfulness. This is not planning permission but confirms that the work either does not constitute ‘development’ or if it does, that it falls within the GPDO.

Answer 46

Note that planning rules are stricter for properties that are listed buildings or fall within conservation areas

Answer 47

Listed buildings are of special architectural or historic interest.

Answer 48

Grade I listed buildings are buildings of exceptional interest (eg, Tower Bridge)

Answer 49

Grade II* listed buildings are particularly important buildings of more than special interest (eg, Battersea Power Station)

Answer 50

Grade II listed buildings are of special interest (eg, Adelphi Hotel, Liverpool)

Answer 51

Listed building consent is needed to demolish, alter or extend a building.

Answer 52

It is a separate requirement from planning permission, and may be necessary even where planning permission isn’t, such as internal alterations. Various matters in the GPDO do not apply to listed buildings

Answer 53

Conservation areas are areas of special historic or architectural interest, the character or appearance of which it is desirable to preserve or enhance. The local authority is under a duty to designate conservation areas within its locality.

Answer 54

* The GPDO will be restricted, so changes to external appearance may require planning permission * In England, planning permission is needed to demolish an unlisted building within a conservation area * In Wales, conservation area consent is needed to demolish an unlisted building within a conservation area (conservation area consent in England was abolished in 2013) * Consent is needed to cut back or cut down trees

Answer 55

Building regulations are a separate matter from planning permission and should not be confused. The Building Act 1984 creates a statutory system under which building regulations are created and adapted using secondary legislation. The Building Regulations 2010 (SI 2010/2214) (‘BR2010’) apply to ‘building work’ (regulation 3, BR2010), which includes

Answer 56

erection or extension of a building * installation or extension of a service or fitting that is controlled under the Building Regulations (for example, windows, boilers) * work required where there is a material change of use of the whole building. Building Regulations regulate issues that affect health and safety, such as the structural integrity of the building, fire escape, water supply, stairways, etc

Answer 57

Where someone proposes to carry out building work covered by the building regulations, they must first obtain building regulations consent. This is a separate requirement from planning permission. Work of various kinds may require both planning permission and building regulations; others may only require one of the two. To ensure compliance with building regulations, the building control inspector may inspect the work. If the work aligns with the relevant regulations, then the inspector will issue a certificate of compliance

Answer 58

For certain types of work, there are self-certification schemes. A window installer registered with the FENSA (Fenestration Self-Assessment) scheme, for example, can self-certify that their work complies with the building regulations. This certificate is then lodged with the building control department of the local authority. Other self-certification schemes include roof replacement (NAPIT or CompetentRoofer), gas boiler (Gas Safe Register) and cavity walls (Blue Flame Certification Scheme). These schemes provide an efficient way to ensure compliance with building regulations.

Answer 59

* Planning permission is needed for ‘development’, being building work or a material change of use * Some building work is excluded from development, such as internal alterations * The General Permitted Development Order 2015 (GPDO) acts like a general planning permission for various listed works and changes of use

Answer 60

* The GPDO can be amended or restricted by an Article 4 Direction * Listed buildings and buildings within conservation areas are subject to stricter controls * Building regulations are a separate matter from planning permission and are concerned with health and safety

Answer 61

A breach of planning control is when: (a) development has taken place without planning permission; or (b) a condition or limitation of planning permission has been breached The local authority have different options for enforcement, but there are time limits within which they must use them. A buyer’s solicitor must check for breaches of planning control, as enforcement is against the current land owner, not the person who caused the breach.

Answer 62

Local authority gives 28 days’ notice that: * land must be restored to condition it was in before unauthorised development; or * comply with any conditions or limitations imposed by planning permission * After 28 days, land owner may be fined, and the local authority can enter the land to carry out the work, recovering its expenses from the land owner

Answer 63

Local authority can serve a stop notice only after serving an enforcement notice – requires that specified activity (for example, an unauthorised use) stop immediately. Cannot prohibit use as a dwelling house or any activity that has been carried out for more than four years

Answer 64

Similar to enforcement notice, but only concerned with breach of conditions or limitations to planning permission

Answer 65

Local authority can apply to court for an injunction, but it is discretionary, and local authority needs to show good reason

Answer 66

The local authority must take enforcement action (whichever type it is) within the following time limits: 4 years * Building works – starting with the date on which the building works were ‘substantially completed’ * Change of use to single dwelling house – starts with the date the use was begun 10 years * Other changes of use * Breach of planning condition

Answer 67

Where a breach of planning control has been deliberately concealed, the local authority can apply to a magistrates’ court for a planning enforcement order. In the case of Fidler v Secretary of State for Communities and Local Government [2010] EWHC 143 (Admin), a landowner built a house without planning permission, and concealed it behind bales of straw covered with a tarpaulin.

Answer 68

The landowner waited for the four years to elapse, and then removed the straw to reveal the house. The high court held that the landowner had always intended to remove the straw bales, so considered it part of the building operation, and the four year period ran from the date on which the bales were removed.

Answer 69

If there is a breach of building regulations, then the local authority may take enforcement action. However, the options for enforcement and time limits are different from those for a breach of planning control. As with breaches of planning control, a buyer’s solicitor must check for possible breaches of building regulations, as enforcement may affect the current land owner

Answer 70

Local authority has six months after discovering breach to prosecute the person responsible (builder, installer or main contractor) for the breach in the Magistrates’ Court. Unlimited fines may be imposed. Prosecution may take place up to two years after completion of the building work.

Answer 71

Local authority has one year after completion of the building work to serve an enforcement notice. Similar to a planning enforcement notice, this gives the land owner 28 days to alter or remove the work. Again, if the land owner fails to comply, the local authority can undertake the work at the land owner’s expense

Answer 72

Local authority can apply to court for an injunction. If the work is unsafe, then there is no time limit.

Answer 73

The buyer’s solicitor needs to check for compliance with planning law and building regulations. The following sources will help: * Local search – for planning permissions, building regulations consents and approvals, and enforcement action, GPDO and Article 4 Direction, Conservation Area, Listed Building status * Seller’s replies to enquiries – for work done or change of use that may have required planning permission or building regulations approval * Buyer’s survey – the survey may reveal work that is not mentioned in replies to enquiries

Answer 74

* Withdraw from transaction – drastic, and in most cases will not be necessary unless the issue is central to the purchase. * Invite seller to regularise matters before completion, whether by removing/altering work, or further paperwork (see below). This may need to be a term of the contract on exchange. * Obtain indemnity insurance (usually at seller’s expense) for breaches of planning or building regulations. However, only covers financial loss for enforcement. For breaches of building regulations, buyer should be advised of health and safety risk, and policy will not cover claims for personal injury or death.

Answer 75

* retrospective planning permission for development; * regularisation certificate for works that did not have building regulations approval but otherwise comply.

Answer 76

* Either breaches of planning control or of building regulations are enforceable by the local authority in various ways * Planning enforcement is subject to limits of 4 years or 10 years * Building regulations enforcement is subject to limits of 1 year or 2 years, but injunctions have no time limit

Answer 77

* The buyer’s solicitor must identify any breaches as liability can pass to the buyer if not addressed * Options for the buyer include withdrawing from the transaction, insisting that the seller correct the situation (whether physically or by acquiring further paperwork), or indemnity insurance (usually at the seller’s expense)

Answer 78

Again, caveat emptor places the burden on the buyer to investigate the property that they intend to buy as thoroughly as possible. However, the seller will usually know much about the property that is not readily available in public records or inspection. The seller may be unwilling to volunteer information that would deter the buyer from proceeding with the purchase. They may also be anxious to avoid responsibility for misrepresentation. However, most sellers will accept that without giving the buyer the information they need, the buyer may delay or even withdraw from the transaction.

Answer 79

Sometimes the seller will not have actual knowledge of the property. For example, an executor of a deceased person’s estate may be a relative who has not lived in the house, or even a solicitor. In such cases, they will be unable to give much meaningful information. In such cases, the seller may reasonably choose not to give replies to enquiries. It is then for the buyer to decide whether they are willing to take the risk of not having this information.

Answer 80

A seller providing replies to enquiries should take care to give correct information. Nonetheless, a buyer’s solicitor will usually use replies to enquiries to complement other investigations, not as a sole source of knowledge about the property. The form of enquiries differs for commercial property and residential property, but the principle is the same.

Answer 81

Solicitors usually use the Commercial Property Standard Enquiries (CPSE), and may add enquiries specific to the transaction.

Answer 82

If the parties adopt the Law Society Conveyancing Protocol (discussed in the next section), enquiries usually use the relevant TransAction form. Under the protocol, the buyer’s solicitor should only add specific enquiries in limited circumstances.

Answer 83

Applies to all commercial property transactions, and covers such matters as: * responsibility for boundaries, and their extent * rights benefiting and burdening the property * access to the property * physical condition * contents * utilities and services * planning and building regulations * occupiers and employees * notices and disputes * Value Added Tax (VAT) treatment

Answer 84

Applies where the property is subject to commercial tenancies (for example, the purchase of an office block or an industrial estate)

Answer 85

Applies on the grant of a new lease (for example, when acting for a tenant on an industrial estate)

Answer 86

Applies to specific other circumstances (less commonly used)

Answer 87

Always used. Covers such matters as: * boundaries * rights benefiting and burdening the property * disputes, complaints and notices * alterations * planning and building regulations * occupiers * services and utilities * energy efficiency

Answer 88

Always used. Identifies any fittings and contents included or excluded in the sale. Also identifies those fittings or contents that the buyer may buy in addition to the property.

Answer 89

Used where the property is a long leasehold (eg, a flat on a 99-year lease)

Answer 90

Used where the property has been newly built

Answer 91

The buyer’s solicitor will usually want to raise additional enquiries to follow up issues that are raised in the title investigation, results and searches and, sometimes, to expand on information given in standard replies to enquiries. In commercial transactions, the buyer’s solicitor can raise whatever enquiries they like, but the seller’s solicitor may decline to respond to enquiries that they feel are irrelevant, would incur unnecessary time and expense to answer, etc.

Answer 92

In residential transactions that follow the conveyancing protocol (see next section), the buyer’s solicitor may only raise additional enquiries to clarify issues arising out of the documents provided, or which are relevant to the title, existing or planned use, nature or location of the property. They should not raise additional enquiries about the state and condition of the building unless arising out of the search results, standard replies to enquiries, inspection or their surveyor’s report.

Answer 93

* A misrepresentation is when the seller misrepresents a fact (not an opinion). If the buyer relies upon the misrepresentation and suffers loss, the buyer could have an action against the seller in misrepresentation. * The seller cannot deliberately mislead the buyer by concealing physical defects or answering enquiries dishonestly.

Answer 94

A seller must take care if answering a question ‘not so far as the seller is aware’ as this implies that the seller has made reasonable investigations and has no actual knowledge of any defect. The seller should check its records and make reasonable enquiries (for example, a company selling should check with its employees). If the seller is unable to make such investigations, the seller should state this in their reply.

Answer 95

Remedies for misrepresentation are rescission or damages.

Answer 96

Most commercial and residential property contracts include standard conditions which limit the buyer’s ability to rescind the contract: ‘An error or omission only entitles the buyer to rescind the contract: 1. where it results from fraud or recklessness, or 2. where the buyer would be obliged, to his prejudice, to accept a property differing substantially (in quantity, quality or tenure) from that which the error or omission had led it to expect.’

Answer 97

Damages are only available where there is ‘a material difference between the represented and the actual description or value of the property’. These provisions are in 7.1.1 of the Standard Conditions of Sale (Fifth Edition) for residential contracts and 10.1 of the Standard Commercial Property Conditions (Third Edition) for commercial contracts.

Answer 98

CPSEs are complex, and some solicitors assist their client by part-completing drafts, asking their client to fill the gaps and to check the answers already provided.They should check the replies against the title and any information they hold (for example, if the firm manages the tenancies at a property). The seller’s solicitor should exercise caution with stock answers, such as ‘not so far as the seller is aware’, and ensure that the seller has approved any replies and enclosures before they are sent to the buyer’s solicitor.

Answer 99

Residential solicitors usually have a large volume of cases, and will send the standard enquiries to their client to answer (but they are more user-friendly than CPSEs).They should still, however, check replies before sending to the buyer’s solicitors, and make sure there is nothing that is clearly incorrect or incomplete. Whether residential or commercial, replies to enquiries should be checked by the seller’s solicitors before exchange to ensure that they remain up to date.

Answer 100

* A buyer’s solicitor will find pre-contract enquiries a useful part of the investigation, but they must be treated with caution and do not replace the need to carry out searches and other investigations. * Standard form enquiries for commercial property are the CPSE enquiries * Standard form enquiries for residential property are the TransAction forms. * A seller can face liability for incorrect replies, and a seller’s solicitor should help reduce the risk.

Answer 101

‘The use of the Protocol is intended to ensure that all clients are treated fairly and are protected when dealing with high value assets and liabilities. Processes that are open and transparent help make the experience more efficient and reduce wasted time and costs.’ Introduction to the Law Society Conveyancing Protocol

Answer 102

* The Law Society Conveyancing Protocol aims to make the conveyancing process more efficient and transparent to the benefit of all parties involved. * It is a set of steps to take when acting in the sale or purchase of a home for an owner-occupier. * The Protocol is not appropriate for new build homes.

Answer 103

* Transparency means sharing information to assist the progress of the transaction (but subject to client confidentiality). * The Protocol is voluntary, but any solicitor or licensed conveyancer can adopt the Protocol. * Solicitors who are members of the Law Society’s Conveyancing Quality Scheme, however, have to adopt the Protocol, as well as undergoing specific training. This accreditation is to provide a recognised quality standard for residential conveyancers and reduce the risk of fraud.

Answer 104

Buyer’s solicitor should only make enquiries that are essential to act in their client’s best interests. The seller’s solicitor should confirm and update, where necessary, replies to enquiries if completed more than two months earlier A solicitor may breach the Protocol if they: * use non-Protocol ‘standard’ enquiries indiscriminately * raise enquiries that seek the seller’s opinion rather than fact. The seller’s solicitor does not have to deal with any enquiries that do not comply with the Protocol

Answer 105

Solicitors who choose to adopt the Protocol, who are obliged (as they are part of the Conveyancing Quality Scheme) agree: * to comply with its terms; and * act within the spirit of the Protocol. If a solicitor breaches the Protocol, then the Law Society may require an explanation, potentially leading to their being monitored and even removed from membership of the Conveyancing Quality Scheme.

Answer 106

* The Protocol is applicable only to conveyancing transactions * The Protocol is designed to make the conveyancing process more efficient and transparent (and therefore less stressful) for the parties * Observance of the Protocol is voluntary except for conveyancers who have the Conveyancing Quality Scheme accreditation * Breaches of the Protocol can lead to removal from the Conveyancing Quality Scheme

Chapter 4: Pre-contract searches & enquiries Flashcards

(132 cards)