A Local Authority Search is required in the majority of property transactions, particularly where a purchaser is borrowing the money from a mortgage provider, although occasionally insurance is used in lieu of a Search.
They are normally requested by a conveyancer.
There are two types of Local Authority Searches:
The Council Local Search produced by the local council contains two elements; the Local Land Charges Certificate of Search (The LLC1) and Enquiries of the Local Authority (the CON29).
The Regulated (Personal) Local Search produced by private companies, which combines information from the Local Land Charges Register and obtains all the information included in the CON29 into a single report. Private search companies will also cross reference against previous searches on and, in the vicinity of, the property and often use additional data sets and research where any anomalies are revealed in the council data.
The Local Land Charges Register Search (LLC1 Search)
Local Land Charges were established in 1925 To provide applicants with details of entries on the LLC Register in respect of the property(s) being searched. An LLC1 search can be carried out in respect of 12 parts of the Register or just single parts. The principal regulations which govern the Local Land Charges Register are contained in the Local Land Charges Act 1975 and the Rules of 1977. The Local Land Charges Registers held at each individual Council will be moving to a centralised single register held the Land Registry. This is due to commence from the end of 2017 and aims to be completed by 2022/3. The government is expected to issue the new Local Land Charges Rules 2017 later this year.
The right for any individual to inspect the register (a personal search) is contained within the Act and the Rules.
Amongst a number of issues which can be revealed in the Land Charges Register, one of the most important are any financial charges, which stay with the property and not the owner. I have seen financial charges in excess of £20,000 on residential searches, which if not settled by the seller prior to the transaction would become the liability of the new owner.
The Con29 or Enquiries of the Local Authority
The CON29 has been in existence for over 50 years and contains a standard set of questions agreed by central government, the Law Society and the Local Government Association. This has been updated over the years with the latest changes to questions implemented in July 2016.
The rights for individuals to inspect other relevant registers containing information contained in the CON29 required to complete the Regulated Search is contained in various other pieces of legislation and/or is available via requests using the Environmental Information Regulations 2004. Private search companies use these laws and regulations to access the data needed to complete the Regulated Local Search.
Common entries revealed in the Enquiries of Local Authority reveal things such as planning and building control histories, nearby Road and Rail Schemes, whether the council maintains the roads and footpaths and some pending information that has not made it on to the Land Charges Register yet.
HMRC has now ruled the production of CON29 by Councils is a commercial activity and from January 2017 councils are required to apply VAT to the CON29 element. The private sector has always had to apply VAT to its searches.
Costs
Councils set their own fees for both the LLC1 and the CON29, creating a post code lottery for the price paid by the consumer for the Council produced product.
Current prices range from £44 at Wakefield Council to a whopping £351.80 including VAT at Tonbridge and Malling Borough Council.
Private Search Companies normally offer their customers a standard or fixed pricing structure for the Regulated Local Search ranging from around £75 to £120 including VAT.
You can find out more about the cost of search fees in our guide on fees for buying a house.
Turnaround times
Again, this is a bit of a postcode lottery for both the Council Search and the Regulated Search. The best local Authority is again Wakefield at around 4 hours, or if you are unlucky enough to be buying a property in West Dorset you can expect to wait anywhere between 10 and 20 weeks!
As private search companies often rely on accessing or obtaining data from councils, there are wide variations in how easily accessible the information is and turnarounds tend to vary from 24 hours to several weeks, although the average turnaround time is around 10 days.
The centralisation of the Land Charges register by Land Registry should improve access to the register and the turnaround of the LLC1.
Liability and Warranty
The Council LLC1 & CON29 is backed by Local Authority Insurance, though this varies from council to council.
Regulated Search providers are signatories to the Search Code (the industry code of practice owned by the Council of Property Search Organisations, CoPSO). Compliance with the code is monitored and enforced by The Property Codes Compliance Board, an independent compliance and consumer interest body.
The Code requires signatories to have a minimum level of Professional Indemnity Insurance for searches of £2million, although many CoPSO members have £10million PII. In addition, signatories must provide additional insurance cover referred to as Specialist Search Insurance which provides cover for errors and omissions in the source data obtained for the council; providing a belt and braces approach to consumer protection.
Conveyancer Preference
The majority of mortgage lenders now accept both types of search, making specific reference to the Search Code in part 2 of the Lenders Handbook (a list of instructions to the conveyancer from the Lender) and there is a fairly even split between conveyancers who choose the council search and the Regulated Local Search. Recent independent research conducted by Ipsos MORI on behalf of the Land Registry revealed that 82% of firms rated the accuracy of information provided by Personal Search companies (PSC’s) as excellent or very good compared to 76% of those that go direct to the council. It also revealed that 23% of firms ordered their searches direct from the local council, 39% from PSC’s and 35% from search intermediaries (this would be a mixture of council and regulated searches).
Competition, innovation and technological advancements has brought many benefits to conveyancers and consumers over the last 20 years in accessing Local Authority Search information. The digital age has seen a whole host of other associated searches evolve from the ever-increasing digitisation of data and information and we expect this to continue.
Stephen Murray, Business Development Director, PSG
Stephen Murray worked as a consumer journalist for the BBC for almost 8 years and has worked for PSG for over 15 years. He sits on the executive membership of the Council of Property Search Organisations and recently contributed to the Conveyancing Association’s white paper on Modernising Conveyancing.
He has been an expert witness on property searches, sits on the Local Land Charges centralisation project stakeholder panel with the Land Registry and been invited to take part on panels discussing the future of conveyancing and best practice in Conveyancing. He is passionate about placing the consumer at the heart of business.
About PSG
PSG has been providing conveyancing searches into the residential and commercial property sector in England and Wales since 1997 and is one of the top 3 providers. PSG is a market leader and provides searches in 1 in 5 residential and 1 in 10 commercial transactions supporting a client base of more than 1000 conveyancing practices. PSG is unique in having 48 local and regional branch offices across the country (more than any other provider) meaning it can provide a truly personal and bespoke service.