Chris
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Jan 24, 2008, 5:08 PM
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HM Government Statement
Issue 29 : 23 January 2008
Reform of the property searches market
Extracted from Newsletter
What are property searches?
Property searches provide buyers, sellers and conveyancers with information about the property and the surrounding area, in particular whether there are limitations or factors that may affect, or are about to affect, the property.
There are three searches that must be included in a HIP:
1. a search of the Local Land Charges Register (LLCR);
2. a Local Enquiries search (specified under schedule 7 of the Regulations); and
3. a drainage and water search (specified under schedule 8 of the Regulations).
HIPs and searches
HIPs do not essentially change the information that is required during the house buying process. However, they do introduce two important changes to the process:
* the mandatory searches are provided by the seller on marketing the property, making this information available at an early stage in the process so that potential buyers can make informed decisions; and
* the HIPs Regulations introduce new standards for all those compiling searches, in particular they require the search provider to provide details of who is liable for any issues arising from the search, such as incorrect information, and search providers are required to have comprehensive insurance liability to cover any such an event.
Property searches can be obtained from three sources — Local Authorities (who hold the data necessary to complete a property search), Private Search Companies and the National Land Information Service.
Reform of the property searches market
property search recordsIn late 2005 the Office of Fair Trading carried out a study of the property search market and, while it found that many aspects were working well, it made a number of recommendations for improvement — with the ultimate aim of a level playing field for competition to deliver benefits in quality, speed and price for consumers. In particular, there was need to improve access to Local Authority-held information and there needed to be greater clarity about how Local Authorities should charge for the data where this was appropriate. Communities and Local Government has been working with both the private sector and Local Authorities in implementing the changes recommended by OFT and two important guidance documents were published on 18 January 2008, one on access to data and one on charges for the data.
Improved access to data
The new 18 Jan guidance document Personal searches of the local land charges register and other records held by Local Authorities sets out good practice guidance for LAs and personal searchers to work together to improve access to all the data necessary to complete a property search compliant with the HIPs Regulations. In particular it seeks to promote prompt access to the data for personal searchers, i.e. within 1–3 working days.
Download a copy of Good Practice Guidance:
http://www.home-information.info/doc?id=128
Fair and transparent charges
Linked to the access guidance is the issue of fair and transparent charging for data. CLG’s 18 Jan consultation document (CD) sets out proposals for the future of LA charges for the delivery of property search services. Broadly the CD seeks views on:
* LAs setting fees for the provision of ‘unrefined’ data (i.e. the raw data from which a search is compiled) based on cost recovery including supporting draft guidance;
* whether LAs should set fees for provision of ‘refined’ data (i.e. the compiled search) on a price competed basis in the market?
* potential changes to the legal framework relevant to property searches to provide clarity and facilitate any changes necessary to deliver the proposals in the CD;
* how Government might best promote full electronic provision of property searches?; and
* future arrangements covering the fee for a personal search of the local land charges register (LLCR) i.e. whether in the future this should be devolved to LAs to set on a cost recovery basis and whether the present centrally set £11 fee for a personal search of the LLCR should be changed?
The consultation closes on 18 April 2008. Download the consultation document at:
http://www.home-information.info/doc?id=129
Together these two documents aim to create a more competitive property searches market as envisaged by the OFT, leading to improved benefits for consumers on quality, speed and costs.
Chris DEA
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