Conveyancing Searches - What are they?

“I’m in a rush to complete my house purchase and know the area well, so can we forget about doing the searches?”

This is a question that is occasionally asked by some house buyers. If the buyer is having a mortgage, then the short answer is no – the conveyancing searches must be carried out. If the buyer is not having a mortgage, then they can choose to opt out of having them done although will be quite rightly advised against this by their conveyancer. If the buyer nevertheless instructs their conveyancer to proceed without doing the searches then they will have to provide written confirmation of this to the conveyancer.

So what are the conveyancing searches? They are part of the conveyancing process which is undertaken by a conveyancer when dealing with the purchase of a property, whether it be residential, commercial, or agricultural. They are carried out to highlight any matters that might directly affect the property or have an effect on its value. They also provide information that will be of interest to the buyer before committing themselves to the purchase.

What searches must be carried out? This will depend upon the location of the property but as a minimum the following searches will be required before the buyer can exchange contracts for the purchase of their new property:

Local Authority Search. A common misconception about this search is that it is done to identify any major projects such as road proposals that might affect the property, and it is for this reason that some buyers, who are familiar with the locality, feel that they do not need this search. However, it is much more than that. The search will also reveal any other entries, such as financial charges, which have been registered by the Council against the property. As an example, these might include an improvement grant which must be repaid to the Council whenever the property is sold. It will also show any planning permissions, building regulations approvals, or enforcement notices which have been issued by the Council in respect of any alterations to the property. If the property includes a listed building, or is located within a conservation area, then this will also be confirmed by the search.

Drainage and Water Search. This search is made to the drainage and water authority and will confirm whether the property is connected to mains water and drainage. It will also contain information about any public sewers or water pipes that might run through the boundaries of the property, which is something that buyers who are intending to extend their property will need to know. If the property has already been extended over, or close to, a public sewer, the search will also reveal whether the drainage authority has given consent for this.

Environmental Search. When this search was introduced, it was designed principally to show whether the ground within the property might be contaminated by, for example, chemicals from a previous industrial use. However, it has since been developed and now contains information about land stability and the likelihood of flooding. Some environmental search providers also include additional information about the locality, such as planning applications, which will be of interest to buyers. What is particularly interesting about Environmental Searches is that they source data about the previous land use going back many years. Until around twenty years ago this data had not been readily available, and so prior to that time Environmental Searches were not carried out on residential property purchases. Accordingly, even in cases where, for example, a house was built fifty years ago, the search should reveal any possible contamination from the time prior to the construction of the house.

If the property is in an area where there has been any coal or other mining activities then a further search can be carried out to check whether the property has previously been, or might be in the future, affected by the workings from the mines.

There are several other searches that a conveyancer may recommend such as a Flood Risk Report, but, in the case of a residential property, it will generally be just those searches that I have mentioned above that will be necessary.

What if the searches reveal any problems? The searches should have been carried out before the buyer commits themselves to the purchase by exchanging contracts. Therefore, unless the problem can be resolved by the seller, the buyer can simply withdraw from the purchase

Why does a mortgage lender insist upon the searches being done, even where the buyer does not want them? Mortgage lenders are not in the business of taking chances. They need to know that the title to the property is good and marketable so that if it should ever become necessary for them to take possession of the property, and sell it, they would not have any problems with the sale. Accordingly, they need to be sure that, at least at the point of the purchase of the property, there are no adverse matters that the searches would reveal. All mortgage lenders therefore give strict instructions to the conveyancer to carry out the searches.

In some cases, particularly where the searches are going to take some time to complete, it may be possible (if the mortgage lender agrees) to take out a search indemnity insurance policy so that the purchase of the property can be completed before the search results have been received or without the searches being carried out at all.

What is search indemnity insurance? Briefly, this is intended to cover certain losses that the buyer may sustain because of a problem which would have been revealed had the searches been carried out. It is important to understand that by the time the problem comes to light the buyer will have committed themselves to, or even completed, the purchase.  The buyer will therefore be stuck with the property and will have to rely upon the outcome of an insurance claim for recompense. It is accordingly important that the buyer understands the difference between taking out the insurance and having the searches done, and carefully considers whether the insurance is the right option for them.

How long do the searches take to complete? Most of the search results will be returned to the conveyancer within two weeks. In some cases, however, the local authority search will take longer.

Clearly the sooner the searches are submitted the sooner the results will be received. Buyers should therefore provide their conveyancer with instructions to carry out the searches, and funds to cover the cost, at the earliest opportunity. Sometimes a buyer will not wish to incur the search costs until they have had their survey carried out and will ask their conveyancer to hold the searches back until a satisfactory survey report has been received. This is understandable but at the same time the buyer should be aware that this is likely to slow down the conveyancing process.

How much do the searches cost? This will depend upon which searches have to be carried out, but most residential property buyers should budget for somewhere between £350.00 to £500.00.

For an initial consultation or quotation regarding advice about conveyancing searches, please contact the Feldon Dunsmore team on 01926 954694.