Most businesses, from mortgage brokers through to removal firms will be trying to forecast their short and long term pipeline. Which transactions can progress, which won’t and what activity will we see when we emerge from lockdown?
Property searches are a key component in most residential purchases; without them transactions cannot proceed. This article examines whether searches can be ordered during lockdown, explains what searches are and briefly explores how earlier ordering can positively impact transaction times.
Property search providers continue to operate
On 17 March we made the decision to move to 100% remote working and within three days our entire team were working from home. We continue to service our clients, but we are experiencing delays in the return of some searches from local authorities and other third parties.
Businesses, like tmgroup, source information from over 600 suppliers from local authorities (LAs) to environmental report providers.
The search supply chain has undergone significant digital transformation in the last decade, but this hasn’t captured all suppliers with some LAs still operating wholly paper-based systems.
This will have hampered the industry’s ability to continue to meet service level agreements relating to the time it takes to supply searches.
Many businesses in the search industry will also have furloughed staff in line with a significant drop in search volumes.
However, a recent press release from the Council of Property Search Organisations (CoPSO) stated that of 343 local councils in England and Wales, property searches are only unavailable in 24. The same release from CoPSO stated that in over 90% of cases CoPSO members are able to serve their customers without any problems.
What is a property search?
Search packs are usually ordered from a property search supplier who will collate information for a specific property from a range of sources. The information contained in a search pack will be assessed by the solicitor to help them advise their clients and to ensure the property provides good security to lend against.
A property search contains a:
Local authority search
Composed of two parts; the LLC1 and the CON29. These are normally submitted by a solicitor with a location plan. LLC1 is a search of the local land charges register and will show if, for example, the property is a listed building or in a conservation or smoke control zone.
The CON29 search reports on restrictions or obligations related to the land a property is sited on, for example, tree preservations orders, conservation areas and conditions imposed on planning permissions.
Drainage and water search
This confirms whether a property is connected to a public sewer, septic tank or other private disposal facility.
It will also confirm if the property is connected to a public or private water supply and provide details of how the property is billed for its water supply and wastewater disposal.
Finally, the report will confirm if the property is close to or affected by water mains or public sewers.
Environmental search
An environmental search is carried out by a specialist environmental search company and involves an examination of past land use records to check whether the land is likely to be contaminated as defined by the Environmental Protection Act 1990. This is a desk top search and does not involve a physical inspection of the site.
The search results will often result in further queries and there may be a need to commission more detailed analysis and/or region-specific reports, for example, a coal mining report.
The process
Property searches are typically ordered by the buyers’ solicitor after an offer has been accepted and once the purchaser has lodged money on account with their solicitor.
There can be a significant time lapse between a property reaching ‘sold subject to contract’ and the solicitor being in a position to order searches. This is one of the key causes of delays in property transactions. The sooner searches can be ordered, the better.
Some estate agents, who recognise the importance of providing more up-front information to potential buyers and want to improve transaction times, order searches at an earlier stage.
This approach is still comparatively rare due to concerns about who covers the cost of the searches and some law firms refusing to accept searches ordered by an estate agent.
Once the UK emerges from lockdown, transactions will need to be progressed as quickly as possible. One way to make this happen is to ensure that the information that’s required for a typical transaction, from the documents needed for AML (anti-money laundering) purposes through to the searches, are readily available and up to date, with new copies ordered where a refresh is required and that all queries have been resolved.
