By Charlotte Mackenzie, Associate Solicitor
We recommend that you consider raising property searches to assist when deciding whether to acquire an interest in land, whether this is in relation to the purchase of a commercial freehold or leasehold, or if you are being granted a new commercial lease.
If you are seeking finance with a legal charge being granted over a property, or if you are re-financing your existing property, your lender is almost certainly likely to require up-to-date property searches to be carried out.
As part of a standard commercial property search pack, our search provider offers the following four searches. Whilst it would be usual to order this standard pack, any of the searches are available individually and if you do not wish to proceed with all four, we would suggest that, at the very least, you consider obtaining the local authority search, due to the nature of what may be revealed.
Further information on each type of search is set out below.
A local authority search puts certain standard enquiries (and any additional optional enquiries if required) to the local authority serving the property. These enquiries cover items such as the planning history of the property which can, in particular, be used to determine the authorised use of the property, and details of any building regulations approvals and certificates for any works carried out at the property.
It will also reveal whether roads serving the property are part of the public highway; whether the local authority has any planned infrastructure schemes that could affect the property; whether the property is located in a conservation area, which could limit any development of the property; and whether the local authority has any record of contaminated land at the site of the property.
We would usually request the optional enquiry to ascertain whether the property is located on common land or a village green, as this could indicate whether there may be any public rights of way affecting the property.
A local authority search provides a snap-shot for the property at that particular point in time and relates solely to the property searched against and not any neighbouring properties. We can widen the area searched against if you wish and this may be particularly helpful if you would like to know what the authorised use of any neighbouring properties are and whether any planning permission applications relating to change of use are pending, for the purpose of indicating potential competition to your business.
We ask that you let us know of any potential issues that concern you for which the local authority may hold information, so that we can consider whether any of the optional enquiries would assist.
Commercial Water and Drainage
This search will confirm whether the property is connected to a mains water and sewer supply and, depending on information held by the local authority, who the utility provider is for these services and where any meters are located.
It may also confirm if the utility provider for drainage charges any surface water drainage charge and whether there are any nearby local sewers, which, if located within the boundary of the property, may be cause for concern as this could hinder any proposed development.
The environmental search is a basic type of environmental search referred to as a ‘desk-top’ search. The limitations of it arise as it is based solely on any ‘paper’ records held by the local authority indicating the historical use of the property and whether there are any uses, such as chemical manufacturing or petrol station, that are likely to mean the land is regarded as being contaminated under environmental legislation.
If a search does reveal potential contamination and you wish to find out more, you would need to commission a separate specialist environmental survey which could involve taking samples of the ground.
The reason to have this search is because, once you become the owner or occupier of any contaminated land and the local authority cannot find the person that either caused the contamination or allowed the contamination to happen, you would be the person they turn to to remedy the contamination, which could be a very expensive process.
A chancel repair search will confirm if the property is located in an area where, historically, there has been a liability for property owners to contribute towards the repair of the chancel of a nearby parish church. What it will not reveal is whether this liability still exists and if the search confirms the property is located in such an area, we would, in the first instance, recommend that you visit the nearby churches to see if they look to be in a state of disrepair, which could indicate a future demand for payment could be made.
However, you should not make any enquiries directly to the church as this will hinder your ability to obtain indemnity insurance against the payment, which is what we would usually advise. The insurance can be obtained for a single one-off payment, which will depend on the value and size of the property.
If you wish to instruct us to obtain commercial property searches on your behalf, we will require funds on account from you and it is recommended that, as the searches can take some time to be returned, that they are made as early as possible to avoid any potential delays to your transaction.
This information sheet has been prepared for the purpose of offering general guidance. If you have any queries, please do not hesitate to contact Charlotte Mackenzie, or another member of our Commercial Property team, on email@example.com or 01892 515022.