We do a lot of commercial property work for our business clients looking for new premises, whether they’re purchasing or taking a lease. As a result, our clients often ask us what’s involved in the conveyancing searches for commercial property.
Of course, not all of the conveyancing searches are appropriate in all circumstances and additional property-specific searches may be necessary dependent on the area or type of property. In this article we provide an overview of the different searches usually considered for commercial property transactions.
Whether you’re a landlord or tenant, seller or buyer, our commercial property solicitors can guide you along every step of a transaction with swift and pragmatic advice.
In this article, we’ll be covering:
- Local land charges and local authority searches
- Drainage and water searches
- Environmental searches
- Flood searches
- Chancel repair searches
- Index map search
- Highways searches
- Coal mining and brine searches
- Utility searches
- What conveyancing searches will your commercial property need?
- What if there isn’t time for the searches?
Local land charges and local authority searches
A local land charges search (often referred to as a ‘local search’) reveals whether any local land charges are registered against a property at the time of the search. This may include matters such as compulsory purchase orders, tree preservation orders, planning enforcement notices and financial charges. A local land charge is defined as being:
- a financial charge or restriction on the use of land;
- registered against the land and not the owner of the land; and
- is registrable on the ‘local land charges register’ for the area in which the land in question is situated.
A local land charge will bind successive owners, even if the charge hasn’t been correctly registered in the local land charges register. However, a buyer who has made a proper search could be entitled to compensation in such a circumstance. Any local land charges registered after the date of the local search will still bind a property.
- Each local authority fulfils a range of functions that may affect land. Consequently, a local authority search will reveal important information about the land searched against, such as:
- planning permissions and completion notices
- building regulation consents
- enforcement notices
- proposals for road schemes
- environmental and pollution notices
- whether any part of the land is registered as common land or as a town or village green
- nearby railway schemes
- road adoption and public rights of way
There is a standard list of questions raised as part of the search. Optional additional enquiries may also be recommended in certain circumstances.
You should also note that a local authority search only reveals matters that affect the land being searched against. It won’t disclose matters that affect neighbouring properties.
Drainage and water searches
Water and drainage searches are made with the local water and sewerage undertaker. The search will reveal whether:
- the property is connected to mains water, mains drainage and surface water drainage
- a water meter serves the property
- there are any publicly maintained drains running through the land. This is an important issue, as building near some types of pipes without the water company's approval could be an offence.
The search may reveal that foul and surface water drain to a public sewer via a length of private sewer or drain. This means that you may be liable for the repair and maintenance of the private sewer or drain, but if its use is shared with another property then responsibility for its maintenance may have transferred to the local drainage and water authority.
A desktop environmental search (which doesn’t include a site visit or testing of soil or groundwater samples) can be used to assess the environmental risks affecting land (including the risk of it being designated as contaminated). This is done by collating information from regulatory bodies, floodplain data and a review of current and historic land uses.
If land is found to be contaminated and the party that caused the contamination can’t be found, the current owner of occupier of the land could be required to remedy the contamination - even if they didn’t cause it. If the desktop environmental search reveals cause for concern, then more detailed environmental searches may be recommended.
Over the past decade, it has become increasingly important to consider whether a property is at a risk of flooding. This is especially important for commercial property, as many industrial areas were traditionally built along river banks, and many businesses have remained in those riverside areas.
For properties at a particular risk of flooding, the cost of insurance cover against flooding could rise considerably or flooding may even not be possible to insure against. The risk may affect value. A good desktop flood search will examine a wide dataset that includes flood risk from all four types of flooding (river, coastal, surface water and groundwater) and will provide comprehensive information on flood defences.
Chancel repair searches
Chancel repair liability is a legal obligation on some property owners in England and Wales to pay for certain repairs to a church - which may or may not be the local parish church. This search is undertaken to see whether the property you are acquiring is within an area responsible for chancel repair. The potential liability for chancel repair changed from October 2013 and in some circumstances, it’s no longer necessary to undertake a search.
Index map search
An index map search is a search made at the Land Registry against a plan of a property. The index map search result:
- will reveal the title numbers of any registered freehold or leasehold land that falls within the plan submitted
- may reveal applications for the registration of a lease
- may reveal that the land that falls within the plan submitted is unregistered or partly unregistered
- may reveal pending applications that will affect the land.
An index map search is of particular importance when purchasing or leasing known unregistered land or where the land in question forms more than one registered title (to make sure there are no gaps between the titles). However, we’d recommend that an index map search be undertaken for any property transaction, so that you’re aware of all interests and titles which affect the land.
A highways search reveals whether highways and footpaths which border or touches the property are private highways and footpaths, or whether they are maintainable at public expense. They provide more detail than the highways enquiries under a local authority search, as a plan is typically provided showing the exact extent of the public highway.
Coal mining and brine searches
A coal mining and brine search will show whether:
- the property is likely to be affected, has been affected, or may in the future be affected by subsidence as a result of coal mining
- the property is in an area where coal mining has taken place, or is likely to take place
- any compensation for subsidence as a result of underground coal workings or mine entries has been paid in the past
- any repairs have been carried out to make good damage caused to the property as a result of coal mining
- there is any current claim in respect of loss or damage caused by coal mining
- the property is within the Cheshire Brine Subsidence Compensation District or a Brine Consultation Area (an area that is subsiding or liable to subside as a result of brine extraction), whether a notice of damage has been filed and details of the claim.
Electricity, gas and telecommunications providers may be able to supply plans showing the route of any of their services, together with details of any wayleave agreements that affect the property. Wayleave agreements are usually written consent to allow a utility service provider to carry out work on privately owned land, such as installing pipes or cables, and undertaking maintenance on this equipment.
Utilities searches include:
- an electricity cable search
- a British Telecom search of BT cable route and equipment
- a gas pipeline search
- a cable and wireless search
This search will be particularly appropriate if you intend to develop the property you’re buying or leasing.
What conveyancing searches will your commercial property need?
Each property is different, just like each of our business clients. We will always discuss your individual requirements, which may need to take account of your lender’s requirements too.
Where a search reveals adverse information, depending on the issue, it may be possible to obtain indemnity insurance to protect you against the risk revealed.
What if there isn’t time for the searches?
Although searches are always recommended to inform you of the risks prior to committing to a commercial property transaction, in cases where the time is limited (and if the lender allows it), it may be possible to obtain insurance to cover for absent searches and the risks of discovering something which might adversely affect a property.