When dealing with commercial properties it is advisable to carry out property searches and surveys along similar lines to when you buy a new house. Here we outline the main types and why they are important.
There might be occasions when it isn’t necessary to carry out searches at all, other occasions when rudimentary searches are appropriate and other cases where it would be advisable for you to carry out a full and detailed set of searches.
Similarly, there are occasions when it is highly advisable to have a surveyor do a survey of premises you are looking at buying or leasing.
This guide sets out the main types of searches and surveys to enable you to understand what these are and make an informed decision on whether you require them.
Part One : Main Types of Searches
Local Authority Searches
This is a report by the Local Authority dealing with a whole mass of information relating to matters affecting the property and the surrounding area.
Among other things, the Local Authority search covers the following:
• Planning control history
• Building control history
• Nearby road schemes and motorways
• Contaminated land
• Whether the area is affected by radon gas
• Listed building status
• Conservation areas
• Tree protection orders
• Improvement or renovation grants
• Smoke control zones
• Future developments
There are a number of optional extras that can be added to the standard Local Authority search (this is called Con29(O)) and this covers the following matters:
• Road proposals by private bodies
• Public paths or byways
• Advertisements
• Completion notices
• Parks and countryside
• Pipelines
• Houses in multiple occupation
• Noise abatement orders
• Urban development areas
• Enterprise zones
• Inner urban improvement areas
• Simplified planning zones
• Land maintenance notices
• Mineral consultation areas
• Hazardous substance consents
• Environmental and pollution notices
• Food safety notices
• Hedgerow notices
• Common land, town and village greens
Local Authority searches generally take a week or two to arrive after they have been ordered. Each Local Authority charges their own fee and these vary quite considerably from council to council. Typically, Local Authority Searches can cost anything from less than £100 to about £250 or more.
Land Registry Searches
This amounts to obtaining a copy of the entry on the national land register of a particular property.
The Land Registry entry should be carefully examined in every single property transaction (whether leasehold or freehold). The entries for a particular property will include a plan and description of the property along with details of the registered title to the property. This will include the following matters:
• The registered owner of the property and details of when it last changed hands
• Details of restrictions on rights to deal with the property
• Any restrictive covenants
• Whether there is a mortgage registered on the property and/or other types of registered security
• Things such as rights of way and other rights and restrictions that could affect the property
Land Registry searches are quick and easy to obtain and normally cost about £10 or so.
Water and Drainage Search
This is a report made by the local water company. The search provides information regarding water and sewerage services for a particular property and details of whether there is drainage for surface water (surface water is effectively rain). There is also information on whether the condition of the public sewers servicing the property present a risk of flooding. There is also information about whether the water to the property is metered and whether there is any issue with water pressure and various other matters that could be relevant to a business that is dependent on uninterrupted water supply.
Mining Searches
The most common types of mining searches are coal and brine and tin in Cornwall. These searches show whether there have been mining activities in the vicinity of a property. The search reports give details of the likelihood of ground disturbances and subsidence as a result of past or current mining activity.
Utility Searches
Utility Searches Provide Information Relevant to the Property relating to the supply of gas, electricity and telecommunication services. These reports tell you whether the property is connected to a mains supply and about pipes and cables etc.
The price of these searches varies.
Environmental Searches
This search reports on whether past use of a property or land nearby could have led to land contamination. An example might be where there has been some kind of past industrial use of a property where the land could potentially be contaminated with dangerous chemicals.
These searches are quite quick to obtain, they normally come back within about two days of them being ordered. Prices do vary but are roughly in the £35-£50 band.
You should note that the environmental search report does not actually say whether the property is or is not contaminated. It reports on risk and an inspection in person by an environmental surveyor would be required to confirm for certain.
Chancel Repair Search
Chancel Repair Liability is an anachronistic right whereby some Parish Churches are able, for historical reasons, to charge local occupiers for repairs to the Parish Church. This is a very controversial right and has been the subject in recent years of several high profile court cases. It all comes from where, in the dim and distant past, land that had previously belonged to the Parish Church was sold off and the obligation to pay for repairs to the Parish Church was inherited by the new owners.
A Chancel Repair Search tells you whether a property is in an area which could give right to a Chancel Repair Liability. Where there is a potential liability, this can easily be militated by taking out an insurance policy.
Both the Chancel Repair Search and any insurance policy are relatively low cost. The search should be considered for any property buyer that is relatively close to any Parish Church.
Part Two : Surveys
Building Condition Survey
This should always be considered when taking on new premises whether you are taking the freehold or leasehold. In both cases, to some extent you will be liable for the cost of repairs to the building or at least a part of the building. The current condition of the property is therefore very relevant.
A Building Condition Survey would be where a Chartered Surveyor inspects the property and reports to you on its condition and any particular concerns and the need for future repairs.
In some cases it might be appropriate for your surveyor to produce what is called a “Schedule of Condition”. A Schedule of Condition is a fully itemised schedule of the condition of each part of the building or property and would highlight all items of disrepair or whether future repairs might be necessary.
Valuation Survey
This is where your surveyor assess the value of a property. It could either be the price of the freehold or the rental value. You should consider having this done if you have doubts about whether you are paying a market rate.
Electrical, Heating and Gas Surveys
These are reports on the condition of the electrical, heating or gas systems within the property. As a bare minimum you should obtain a Gas Safety Certificate where there is a gas supply to any property. You should also consider whether you require an Electrical Safety Certificate prior to taking on any new premises. There are also surveys you can have done to report on the heating system and whether it is fit for its purpose.
Drainage Inspection
This is where you have a full inspection of the drainage system to make sure that it’s fit for purpose and to ensure that it is in a proper state or repair and is not likely to need expensive repairs in the near future.
Simon Newman - January 2017
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