Whether buying a house or taking a lease of commercial premises, one of the most important searches carried out as part of the conveyancing process is the local search.  Technically this consists of two searches, both made with the local authority.

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The difference between the two searches is that the search of the Local Land Charges Register (form LLC1) should reveal any matters actually registered that affect the property.  These are usually very significant matters covering areas such as:

  • Charges recoverable by the local authority for drainage and sewerage works, repair or demolition of dangerous buildings, building cleansing works, and making-up of roads.
  • Conditions in planning consents.
  • Planning enforcement notices.
  • Tree preservation orders and building preservation notices.
  • Listed building registrations and enforcement notices.
  • Conservation areas.
  • Planning obligations.
  • Dedication of land as access land.
  • Compulsory purchase orders.

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The second search consists of a set of enquiries (Con 29R) which do not refer to a register but instead ask various departments at the local authority whether they are aware of any matters that may affect a property or its immediate surroundings but which are not necessarily registrable as a land charge. They include matters such as:

  • Whether there are any road proposals in the area of the Property;
  • Whether the property is subject to any environmental health notices;
  • Whether the local authority has any planning proposals that affect the property including compulsory purchase;
  • Whether the property is subject to any building control notices and enforcement.

This was historically the reason that Local Searches took so long to be completed.  Search forms would be circulated round the local authority offices with each department filling in its own part of the search form.

Difficulties with local searches

Even if all the answers to both searches are correct, they are only correct as at the time the search is undertaken.  There is no priority period.  A new order or proposal could be made the next day and it would still bind the property and the person who bought it.  This limitation considerably increases the risks for any property buyer and, as a result, people taking short term leases of commercial property are often reluctant to pay for a search.   While understandable, this reluctance is misplaced.  First, most matters that affect the property will be revealed by the search.  Second, while the property will still be bound by any matters that should have been revealed but have not been, the local authority will pay compensation if it has been negligent in answering enquiries.  This presupposes that the search has actually been carried out.  If there has been no search, then compensation will not be payable.

There are limitations to the local authority’s liability:

  • The local authority must be negligent.  The mere fact that an answer is incorrect is not evidence that there has been negligence.  For example in the area of compulsory purchase law, the procedure for obtaining an order (a “CPO”) is very protracted.  Until an enforceable order is actually made, it will not appear on the register.  Local Authority departments may know of their own proposals to make a CPO but there is no obligation on any of the numerous other authorities who have CPO powers to notify the local authority of their intentions.
  • An incorrect response to a local authority enquiry will not be negligently provided just because the council’s underlying records are inaccurate (Gooden v Northamptonshire County Council, 20 November, 2001 (Court of Appeal).  In order to succeed in claiming compensation from a local authority that has given a wrong answer, the aggrieved buyer must show that the local authority itself has done something negligent.  In the recent case ofChesterton Commercial (Oxon) Ltd v Oxfordshire County Council [2015] EWHC 2020 (Ch), Oxfordshire County Council was found negligent because it was in breach of its statutory duty to keep an accurate record of adopted highways, not simply because the plan they referred to was incorrect.

Mitigation of risks

In light of this uncertainty, it is the interpretation of the search which is most likely to minimise the risk to the buyer.  Obviously, it is not safe to rely on a search that is not recent and the longer the gap, the more risk there will be.  A search that is more than 2 or 3 months old is likely to be of little value.

A search’s results should in any event be considered in the light of all other information obtained about the property and any discrepancies investigated.  If there are any proposals affecting the property, then the Seller will almost certainly have received notice of them.  Failure by the Seller to reveal any such matters may be a negligent mis-description and give rise to a possible claim for damages.

Even this protection can be narrower than expected as indicated by the case ofThorp and another v Abbotts and another that was decided earlier this year by the High Court. The Court considered what the terms “notice”,  “communication”, “discussion” and “neighbour” actually meant in the context of the standard enquiries used in conveyancing transactions and, perhaps surprisingly, concluded that they should not be construed so widely as to oblige sellers to disclose speculative and remote information.  The Court stated that a degree of certainty that an event was likely to happen and would affect the property (and not just its value) was required before an obligation to disclose arose.

Conclusion

Local searches are a vital part of the due diligence process before deciding to buy or rent any property, and it is only in the most exceptional circumstances that they should be dispensed with, but their results need to be properly understood and interpreted.