REAL ESTATE EXAM NOTES
Pre-Contract Investigations:
Searches and Enquiries
Outcomes
❖ Explain the range and purpose of pre-contract searches and enquiries commonly undertaken
when acquiring property on behalf of a buyer client.
❖ Identify which searches and enquiries are appropriate for different types of property.
❖ Analyse the replies and results of pre-contract searches and enquiries and identify issues that
need further investigation.
❖ Advise on the action to be taken in response to the replies and results of the searches and
enquiries you have undertaken.
❖ Carry out independent research on matters affecting a real estate client’s property portfolio.
❖ Identify the appropriate pre-contract searches and enquiries for a property taking into account
its particular characteristics and analyse the results and replies.
Workshop tasks
❖ Report to a buyer client and its lender on the results of the searches and enquiries using a
standard form Certificate of Title.
❖ Analyse the results of the pre-contract searches and the replies to your enquiries and provide
advice to the client on any matters arising from them.
❖ Report back on the results of your research on HS2.
❖ Decide what searches and enquiries should be carried out for a particular property.
❖ Analyse the results of the pre-contract searches and enquiries.
❖ Complete the relevant parts of the CLLS Certificate of Title.
34
, REAL ESTATE EXAM NOTES
Searches
Why do we do → Buyer’s solicitors make searches due to doctrine of CAVEAT EMPTOR – buyer beware.
searches? → Seller’s duty to disclose is limited, so searches are necessary to protect buyer.
→ If solicitor doesn’t make the searches they should do, solicitor will be liable for professional
negligence.
→ Results of searches can afford protection: if they suffer loss as a result of an error in official
certificate of search, compensation may be payable under s10 of LLCA 1975
When should All searches should not be more than a maximum of six months old at completion (Lenders
we do Handbook para 5.2.3) to satisfy (assuming is being taken out by buyer) – however, two months is the
searches? usual limit in practice.
When searching, think about what is not in the results that you might have expected to find.
General While conducting necessary searches, the solicitor should consider whether planning permission will
considerations need to be obtained and whether the seller or predecessors obtained the necessary planning
permissions and building regulation approvals. This will affect buyer’s future use and potential
liability.
Role of BUYER’S solicitor
→ Buyer’s solicitor must:
✓ obtain all relevant information
✓ thoroughly analyse it
✓ provide clear, concise and coherent advice
Failure to pursue an unsatisfactory reply from the seller which results in loss being suffered by the
client, may result in the buyer’s solicitor being liable to his own client in negligence:
Computastaff Ltd v Ingledew Brown Bennison & Garret (1983).
The contract should not be finally approved by the buyer’s solicitor or exchanged until satisfactory
results of all searches have been received.
Passing on search results
• Once you get your search results, if any are unsatisfactory, pursue them.
• If not done, you are potentially liable to client in negligence (Computastaff v Ingledew Brown
Bennison & Garrett)
• Always communicate the results to your client
• A buyer has imputed knowledge of everything his solicitor knows.
• A lender can rely on searches made by a buyer’s solicitor.
• Where the seller has made his own searches, the buyer may choose to rely on a seller’s searches
or repeat them himself.
35
, REAL ESTATE EXAM NOTES
Planning Permission
Ch 7 p73
A buyer’s solicitor should ensure that a property has all necessary planning permissions and building
regulation approvals.
Does the Planning permission is required for the “development” of any land (s57 Town and Country
activity Planning Act 1990).
constitute “Development” (s55)
development? o Building, engineering, mining or other operations in, on, over or under land, or
o The making of any material change in the use of any buildings or other land.
Excludes:
Alterations which only affect the interior of the building.
Dwelling house alterations that are consistent with its use as a dwelling – e.g. turning
garage into study
Where the change of use is to a use in the same class under the Town and Country
Planning (Use Classes) Order 1987 (UCO).
Changes from specified commercial uses (or mixed specified commercial and residential
uses) to Class C3 (residential).
Town and Country Planning (Use Classes) Order 1987
Part A:
❖ A1 Shops - Shops, retail warehouses, hairdressers, undertakers, travel and
ticket agencies, post offices, pet shops, sandwich bars, showrooms,
domestic hire shops, dry cleaners, funeral directors, and internet cafes.
❖ A2 Financial and professional services - Financial services such as banks
and building societies, professional services (other than health and
medical services) and including estate and employment agencies. It does
not include betting offices or pay day loan shops - these are now classed
as “sui generis” uses.
❖ A3 Restaurants and cafés - For the sale of food and drink for consumption
on the premises - restaurants, snack bars and cafes.
❖ A4 Drinking establishments - Public houses, wine bars or other drinking
establishments (but not night clubs).
❖ A5 Hot food takeaways - For the sale of hot food for consumption off the
premises.
Part B:
❖ B1 Business - Offices (other than those that fall within A2), research and
development of products and processes, light industry appropriate in a
residential area.
❖ B2 General industrial - Use for industrial process other than one falling
within class B1 (excluding incineration purposes, chemical treatment or
landfill or hazardous waste).
❖ B8 Storage or distribution - This class includes open air storage
Part C
❖ C3 Dwelling houses
Part D
❖ D1 Non-residential institutions - Clinics, health centres, crèches, day
nurseries, day centres, schools, art galleries (other than for sale or hire),
museums, libraries, halls, places of worship, church halls, law court. Non
residential education and training centres.
❖ D2 Assembly and leisure - Cinemas, music and concert halls, bingo and
dance halls (but not night clubs), swimming baths, skating rinks,
gymnasiums or area for indoor or outdoor sports and recreations (except
for motor sports, or where firearms are used).
36
Pre-Contract Investigations:
Searches and Enquiries
Outcomes
❖ Explain the range and purpose of pre-contract searches and enquiries commonly undertaken
when acquiring property on behalf of a buyer client.
❖ Identify which searches and enquiries are appropriate for different types of property.
❖ Analyse the replies and results of pre-contract searches and enquiries and identify issues that
need further investigation.
❖ Advise on the action to be taken in response to the replies and results of the searches and
enquiries you have undertaken.
❖ Carry out independent research on matters affecting a real estate client’s property portfolio.
❖ Identify the appropriate pre-contract searches and enquiries for a property taking into account
its particular characteristics and analyse the results and replies.
Workshop tasks
❖ Report to a buyer client and its lender on the results of the searches and enquiries using a
standard form Certificate of Title.
❖ Analyse the results of the pre-contract searches and the replies to your enquiries and provide
advice to the client on any matters arising from them.
❖ Report back on the results of your research on HS2.
❖ Decide what searches and enquiries should be carried out for a particular property.
❖ Analyse the results of the pre-contract searches and enquiries.
❖ Complete the relevant parts of the CLLS Certificate of Title.
34
, REAL ESTATE EXAM NOTES
Searches
Why do we do → Buyer’s solicitors make searches due to doctrine of CAVEAT EMPTOR – buyer beware.
searches? → Seller’s duty to disclose is limited, so searches are necessary to protect buyer.
→ If solicitor doesn’t make the searches they should do, solicitor will be liable for professional
negligence.
→ Results of searches can afford protection: if they suffer loss as a result of an error in official
certificate of search, compensation may be payable under s10 of LLCA 1975
When should All searches should not be more than a maximum of six months old at completion (Lenders
we do Handbook para 5.2.3) to satisfy (assuming is being taken out by buyer) – however, two months is the
searches? usual limit in practice.
When searching, think about what is not in the results that you might have expected to find.
General While conducting necessary searches, the solicitor should consider whether planning permission will
considerations need to be obtained and whether the seller or predecessors obtained the necessary planning
permissions and building regulation approvals. This will affect buyer’s future use and potential
liability.
Role of BUYER’S solicitor
→ Buyer’s solicitor must:
✓ obtain all relevant information
✓ thoroughly analyse it
✓ provide clear, concise and coherent advice
Failure to pursue an unsatisfactory reply from the seller which results in loss being suffered by the
client, may result in the buyer’s solicitor being liable to his own client in negligence:
Computastaff Ltd v Ingledew Brown Bennison & Garret (1983).
The contract should not be finally approved by the buyer’s solicitor or exchanged until satisfactory
results of all searches have been received.
Passing on search results
• Once you get your search results, if any are unsatisfactory, pursue them.
• If not done, you are potentially liable to client in negligence (Computastaff v Ingledew Brown
Bennison & Garrett)
• Always communicate the results to your client
• A buyer has imputed knowledge of everything his solicitor knows.
• A lender can rely on searches made by a buyer’s solicitor.
• Where the seller has made his own searches, the buyer may choose to rely on a seller’s searches
or repeat them himself.
35
, REAL ESTATE EXAM NOTES
Planning Permission
Ch 7 p73
A buyer’s solicitor should ensure that a property has all necessary planning permissions and building
regulation approvals.
Does the Planning permission is required for the “development” of any land (s57 Town and Country
activity Planning Act 1990).
constitute “Development” (s55)
development? o Building, engineering, mining or other operations in, on, over or under land, or
o The making of any material change in the use of any buildings or other land.
Excludes:
Alterations which only affect the interior of the building.
Dwelling house alterations that are consistent with its use as a dwelling – e.g. turning
garage into study
Where the change of use is to a use in the same class under the Town and Country
Planning (Use Classes) Order 1987 (UCO).
Changes from specified commercial uses (or mixed specified commercial and residential
uses) to Class C3 (residential).
Town and Country Planning (Use Classes) Order 1987
Part A:
❖ A1 Shops - Shops, retail warehouses, hairdressers, undertakers, travel and
ticket agencies, post offices, pet shops, sandwich bars, showrooms,
domestic hire shops, dry cleaners, funeral directors, and internet cafes.
❖ A2 Financial and professional services - Financial services such as banks
and building societies, professional services (other than health and
medical services) and including estate and employment agencies. It does
not include betting offices or pay day loan shops - these are now classed
as “sui generis” uses.
❖ A3 Restaurants and cafés - For the sale of food and drink for consumption
on the premises - restaurants, snack bars and cafes.
❖ A4 Drinking establishments - Public houses, wine bars or other drinking
establishments (but not night clubs).
❖ A5 Hot food takeaways - For the sale of hot food for consumption off the
premises.
Part B:
❖ B1 Business - Offices (other than those that fall within A2), research and
development of products and processes, light industry appropriate in a
residential area.
❖ B2 General industrial - Use for industrial process other than one falling
within class B1 (excluding incineration purposes, chemical treatment or
landfill or hazardous waste).
❖ B8 Storage or distribution - This class includes open air storage
Part C
❖ C3 Dwelling houses
Part D
❖ D1 Non-residential institutions - Clinics, health centres, crèches, day
nurseries, day centres, schools, art galleries (other than for sale or hire),
museums, libraries, halls, places of worship, church halls, law court. Non
residential education and training centres.
❖ D2 Assembly and leisure - Cinemas, music and concert halls, bingo and
dance halls (but not night clubs), swimming baths, skating rinks,
gymnasiums or area for indoor or outdoor sports and recreations (except
for motor sports, or where firearms are used).
36
