Legal

Property Searches and No Search Indemnity Insurance

Searches are a vital part of the conveyancing purchase or mortgage process.

05 Feb 2024

Team name
Shah Al Hoque

Shah Al Hoque

Once you have provided monies on account, solicitors will obtain your consent to purchase searches through their search provider. These searches would be specific to the property and allow your solicitor to check if there are any issues with the property. Below is a summary of the searches your solicitor usually purchases on your behalf.

Local Authority Search

Local authority searches are arguably the most important type of search your solicitor will arrange, as they will look at information held by the local authority about the property, including planning permission, building regulations and other important factors that may affect your property such as tree preservation orders or compulsory purchase orders. It should also note if the local authority is responsible for maintaining roads and paths adjoining the property or not.

Environmental Search

An environmental search is important as it seeks to establish whether the property you are buying is built on or near contaminated land. The reason this type of search is required is because many properties are built on land which was previously used for industrial purposes and toxic substances could still subsist beneath the property. It is a desktop search as opposed to a soil sample and is based upon the history of the site as opposed to formal testing of the ground itself. If the original contaminator cannot be found or is no longer in existence, the cost of any clean up works falls to the current owner. An environmental search will also show whether there is a risk of flooding, radon and ground hazards. Your solicitor may advise that you instruct an expert environmental surveyor for further information or assistance.

Drainage and Water Search

A drainage and water search will establish where your water comes from and whether there are any public sewers or drains within the boundaries of the property. This is vital as if there is a public sewer in the boundaries of the property, no building should be erected over it without a build over agreement with the water authority. It could affect any building work you may want to carry out in the future, such as an extension or conservatory. The search should also confirm whether the property is connected to the mains, whether or not foul and surface water drain to the public system, whether a surface water charge is payable and if the property is subject to a water meter.

Chancel Repair Search

A chancel repair search is necessary to establish whether you will be liable for the cost of repairs to a church. During the Middle Ages, property owners rather than monasteries became responsible for repairing church chancels. Following a law change in October 2013, the church must now establish and lodge liability with the Land Registry, but in rare circumstances the church can still insist a property owner be liable for repairs even if the liability hasn’t been registered.

Location Specific Searches

Depending on the area where you are purchasing a property, your solicitor might suggest arranging other additional searches. For example, if you are purchasing in an area previously used for mining your solicitor may suggest a mining search be carried out. This helps establish whether the property you want to purchase has been built on unstable ground and if it is at risk of subsidence.

No Search Indemnity Insurance

Whilst most buyers prefer to purchase searches in order to obtain as much information as possible on a property, there is an alternative to purchasing searches, this being a No Search Indemnity Insurance.

A No Search Indemnity Insurance policy will allow the buyer to proceed with a transaction without the usual searches in place.  Cover and conditions will vary between insurance providers, but the policy will usually cover a loss sustained because of adverse entries which would otherwise have been revealed had a search been carried out.  A loss usually means the value of any financial charges revealed or a reduction in market value of the property. The limit of cover is determined by the purchase price of the property.

If you are purchasing with the assistance of mortgage finance, your solicitor will also need to check with your lender as to whether not  No Search Indemnity is accepted and any conditions that must be complied with. Lenders generally insist on full searches being undertaken for purchase transactions. Some insurance policies will only cover an absent local search whereas others will cover the absence of the local search and drainage searches.

M&P Commentary

Shah Al Hoque, Paralegal in our Residential Property team, said:

“Searches are just one step on the road to completing your purchase and it’s important that your conveyancer assists you and keeps you updated throughout the whole process. Your conveyancer should advise you on the searches being carried out and the results obtained. They may also recommend an expert or surveyor be instructed should any complicated matters arise.  They should also be able to check whether No Search Indemnity is a possible option for you and will confirm this with your lender (if you have one).

The residential property team at Mullis & Peake are here to assist you in your conveyancing matters and will be able to advise and guide you through the whole conveyancing process.”

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