What Are Pre-Completion Searches?
Posted on 31st March 2020
Differing to your conveyancing searches, which are of extreme importance to your conveyance (see our blog in which our Preston solicitors explain why), pre-completion searches bring about a number of considerations for your conveyancing solicitor.
When a date for Completion has been agreed, we understand that the considerations in our eager buyers’ minds will, no doubt, relate to what colour kitchen they may have, and where they might hang that picture, however, for our Preston solicitors, it is a different story.
At this stage of the transaction, your conveyancing solicitor will ensure that you have signed the necessary documents, are happy to proceed, and will be requesting funds to facilitate the purchase. Amidst all of this, there is the importance of the pre-completion searches.
What are pre-completion searches?
Pre-completion searches are searches that your solicitors in Preston undertake prior to completion of your matter. There are two main searches that are carried out:
The bankruptcy search, also known as the K17 search, requires your Preston solicitor to input the full name(s) of the buyer(s) into the Land Registry Portal, at the cost of £2.00 per search, per name. Once submitted, the Land Registry can, immediately, issue a certificate which either, confirms there are no subsisting entries against an individual, or where entries are revealed, will list the same.
See the Land Registry’s Practice Guide which specifically discusses the occasions in which entries may be revealed and their meaning, here.
In the event that there are entries revealed, your solicitors in Preston would, firstly, need to establish what the entries relate to, and that they do, indeed, actually relate to the individual being searched against. With more common names, it is not unusual for entries to be revealed that do not relate to the individual being searched against. In which case, your conveyancing solicitor would require specific confirmation of this.
Where there are entries revealed, and the buyer is purchasing with the assistance of a mortgage, the lender would need to be alerted that a K18 Certificate has been issued, as opposed to a K17 (issued where there are no relevant entries). This is because your Preston solicitors not only have a duty to you, but to the mortgage lender, as well. The concern of the mortgage lender is that their security over the property is going to be adequately protected, at all times. If there have been bankruptcy entries revealed, there is a potential risk that the individual purchasing may not be able to keep up with monthly repayments, but also the potential for a trustee in bankruptcy/official receiver to make a claim over the property in order to satisfy any debts. Your conveyancer does, therefore, have a duty to report the same to the lender for their consideration.
Where matters of importance are not reported, the lender can reserve the right to withdraw the offer. See our Preston solicitors’ blog in which we discuss circumstances where the mortgage offer may be withdrawn.
As a general rule, the search lasts for a period of three weeks and must be valid at the date of Completion to ensure that no adverse entries have arisen prior to the same.
As you can see, this search can have a significant impact on your conveyance. Now, what other searches should your conveyancing solicitor be considering?
Official Search with Priority
The Official Search with Priority can take two forms, the Official Search of Whole with Priority, also known as the OS1, and the Official Search of Part with Priority, also known as the OS2. At £3.00 per search, here is why they are so important…
The aim of the search is to ensure that the applicant, in other words the buyer, has priority over the land they intend to purchase. The search restricts any other person registering an interest over the land, during the priority period of the search. It is, therefore, important that your conveyancing solicitor ensures the priority is in date and effective for as long as needs be. The certificate lasts for a period of six weeks and, in the event that the priority period ends, before the registration formalities have been concluded, there is a risk that another individual could register an interest over the property.
In addition, the search will confirm to your Preston solicitors whether there have been any alterations made to the Official Copy of Register of Title, since the copies in their possession were produced. The search will specifically confirm that, from the date of the previous official copy entries, there have been no adverse entries, however, in the event that there have been amendments to the Register, a further copy of the same will be supplied with the changes noted. This allows your conveyancing solicitor the opportunity, before completion, to ensure that your interest in the property is going to be adequately protected.
In instances where the buyer is purchasing with the assistance of a mortgage, it is to be the lender’s interest that is noted on the search, as opposed to the buyer. Their first charge over the same is to take priority over the property and, as such, they are noted accordingly thereon.
What about the OS2?
As with the OS1, the OS2 works to determine whether any amendments to the Register have been made, and to provide the buyer and, where necessary, their lender, priority over the property. The difference with this search, however, is that the same is not readily available, and can take up to five working days to retrieve.
This search applies to searches where part priority of the title is required, and only part of a particular title is being searched against. This is most commonly used, by our Preston solicitors, in the case of new build purchases. This is because the developer usually owns a large plot of land, upon which the individual properties are built upon and, when sold are registered in their own right with a unique title number. As such, the OS2 search does not need to take priority over the plot of land as a whole, but over the parcel being purchased by the buyer(s).
The principles and importance of the searches does, however, remain the same, as you can see.
If, therefore, you are purchasing a property and have a query in connection with pre-completion searches, or any other conveyancing enquiry, get in touch today, at firstname.lastname@example.org, and our team of experts will be on hand to assist you.
In unregistered land, the requirement for these searches can differ.
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