What are Commercial Property searches?

Searches are enquiries of various public authorities and search providers and are made by the lawyers acting for purchasers, tenants, and lenders. The following searches are regarded as ‘standard’ for a commercial transaction:

Local Authority Search

This is a combined search of the local authority’s Land Charge’s Register, plus it provides replies to standard enquiries of the local authority with the option of adding specific additional enquiries should the nature of the property or transaction require them. The matters revealed in the Land Charges Register could potentially have financial implications, or restrict your use of the Property, such as a subsisting development agreement, or an Article 4 Direction.

The replies to enquiries will reveal things such as:

  • Whether any planning consents or building regulations approvals have been granted, are pending, or are refused, or whether any enforcement action has been taken
  • Whether the highways serving the property are maintained at a public expense
  • Whether there are any new roads and railways proposed within 200 metres of the property
  • Whether the property is listed or within a Conservation Area
  • Whether the property is registered as Common Land
  • Whether any public footpaths run through the property

The cost of a Local Authority Search is in the region of £150-£300, but will vary depending on which local authority the property is maintained by.

Please note that the local search is simply a snapshot of the local authority’s records at the date that it was carried out. Anything added after that date will still bind the property even if you didn’t know about it.

Drainage and Water Search

This is a search that is submitted to the relevant water company serving the property. This search will reveal key matters, such as:

  • Whether foul and surface water at the property drains to a public sewer
  • Whether the property is connected to the mains water supply
  • Whether there is a water main or public sewer within the boundaries of the property

The search will also provide plans routes of the sewers and waterways where they are held as public record

The cost of a Drainage and Water search is in the region of £100-£200, but will vary depending on the water company.

Environmental & Flood Risk Search

This search reveals whether the property may be deemed as contaminated land. This may be key to both your occupation or proposed development of the property, and could potentially be expensive should it fall to you to rectify any issues. Whilst the law on contamination states that the “polluter pays”, if the polluter cannot be traced, the current owner or occupier may be liable to pay the costs to remediate the contamination.

This search also reveals whether the property is in an area at risk of flooding, either from coastal waters, surface water or overflowing drains.

The cost for this search is in the region of £150-£250, but will vary depending on where the property is located.

Highways Search

This search will reveal the extent of a publicly maintained highway to ensure you have the correct legal rights of access to the property. Some of this information will be revealed by the Local Authority Search as mentioned above, but not all local authorities provide a plan showing the actual extent of the highway itself. A Highways Search will reveal whether there are any parcels of land, or ‘ransom strips’ between your property and the highway that are not publicly maintained and therefore requiring additional investigation. The cost is in the region of £50, but will vary depending on where the property is located.

Chancel Search

This search will reveal whether you are liable under a historic law to contribute towards the upkeep of a local church. Even if such a liability is revealed, it is, in reality, extremely to affect the property, or cause you significant financial loss. If the property is within the vicinity of a church and is liable to make payments, this liability is usually split between all owners and occupiers within the vicinity of the church, therefore where the property is in a heavily built up area, the liability is significantly reduced. The cost is in the region of £15, and indemnity insurance is available if such liability does arise for a small additional fee (usually less than £100 unless the property is particularly high value).

Such searches are no longer required where land is being purchased, however, as the church’s liability will be lost where they have not registered the same against the title, and ownership passes.

There are also additional searches available depending on the type of transaction, the area that the property is in, or should you be looking to ascertain something very specific about the property before purchasing or leasing it. We will explain any additional or alternative searches to you in more detail should the need arise, as they are all tailored to each specific transaction, but those mentioned above are carried out in almost all commercial transactions.

Why do we need to carry out searches on your behalf?

The information revealed in the search results will assist you in building up a complete picture of the property that you intend to acquire or let. We aim, using the results along with the rest of the due diligence process, to provide you with as much knowledge about the property as possible to enable you to weigh up any risks before making a commercial decision to proceed. As you can see from the above information, some of the possibilities that can be revealed in the search results have potentially significant financial implications on the owner of occupier, and you will not have the option to change your mind after exchange or completion.

We appreciate that the full search package can be costly with all the other fees involved with land acquisition. You do not have to carry out all, or indeed any, of the searches, however we do recommend that you do so. We cannot be liable for information that may have been revealed in those searches that later causes you a problem or unexpected financial liability if you have chosen not to. We are happy to advise on whether specific searches are necessary for a particular transaction to allow you to make a decision accordingly though. For example a short, low rental, internal-only lease of a third floor office building will perhaps not justify the cost of an environmental search. Equally, some tenant clients prefer to rely on the rights granted in the lease with regard to services and choose not to carry out a drainage and water search. Every transaction is different, and the purchaser or tenant’s priorities and requirements will change each time.

If you are buying property, however, or leasing an entire building for a significant period, we strongly recommend that the full search suite is carried out to give you the best advance insight into what you are getting and whether there are any issues that may affect the value of it or prevent you from carrying out your intended plans. Please also bear in mind if you are taking a mortgage out to facilitate the purchase that the lender will require us to carry out a full and detailed due diligence process, which will always include the full search package irrespective of the property.

When are searches applied for?

Searches are submitted near the start of the transaction, once we have received a plan of the property from the seller/landlord’s solicitors, and have money on account from you. The costs are not incurred by us but rather an outside search provider. We therefore do not have any control over how much they are and will need to have the money up front before we can place the order. We will also await to receive your confirmation that we may proceed to order searches on your behalf. 

For more information on searches, or to have your other questions answered regarding commercial property, you can contact our Southampton or Portsmouth Commercial Property teams on the following details:

The Southampton Team:

023 8071 7414

southamptoncommercialproperty@warnergoodman.co.uk

The Portsmouth Team:

 023 9277 6503

portsmouthcommercialproperty@warnergoodman.co.uk

 

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