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Commercial Searches - Are They Necessary?

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Purchasing a property can be quite daunting, especially if it is for the first time and costs can seem to increase rapidly.  One of the most common questions asked, especially if the purchaser is already in occupation of the property, is “do we need to do searches?”

If a mortgage is being used to purchase the property then, unfortunately, most banks will require the minimum of a Local search, a Drainage and Water search and an Environmental search.  

However, if it is a cash transaction you can decide which searches, if any, you undertake.  It is always advisable to undertake the Local, Drainage and Water and Environmental searches but there are plenty of others to consider.  The cost of searches  varies depending on the area and when we obtain a quote for you we will be able to see if any other searches are recommended for that area, for example a Flood search or Coal search. 

If the searches reveal something which you were not expecting you have the ability to ask the seller to resolve the issue, renegotiate the price or withdraw from the transaction.

I have listed below the most common searches and an explanation about what they could reveal. 

Local Search

The Local Authority search provides information as to whether the roads serving the property are maintained at the public expense, details of any road schemes and railway schemes proposed within 200 metres of the property, any planning applications made, including those refused, and any planning enforcement notices registered against the property together with details of whether there are any financial charges (for example grants that need to be repaid) registered against the property.  It will also show whether the property is registered as an asset of community value which places restrictions on the sale of the property. 


Water & Drainage Search

The Water and Drainage search provides information regarding the water and sewerage supplies to the property and will show whether the building has been erected over a public sewer, whether the property is recorded as being at risk from overloaded sewers and the basis on which charges are made. 


Environmental Review

The Desk Top Environmental Review will show whether the property may be situated on or near land that may be contaminated.  It will show whether land has been used historically for industrial purposes or waste disposal and will identify any receptors which may carry any contamination.  It is important that potential contamination risks are identified as, in addition to the risks to health and the structure of the property, the costs of cleaning up any contamination may fall on you in the future if the original polluter cannot be found. 


Chancel Check Search

The Chancel Check search will reveal whether or not the property is in an area which continues to have a potential chancel repair liability.  If it reveals a potential liability then it is possible for insurance to be taken out in relation to this risk.

It is possible to take the indemnity insurance policy out without carrying out a search first.


Flood Report

The Flood Report will examine whether the property is situated on or near land which could be susceptible to flooding.  This will identify from the available data whether there are current and potential flood risks which could result in the property being flooded or adversely affect your ability to obtain suitable insurance cover.  It will also detail the risk form different source of flooding as a property can be at risk of flooding even if it is nowhere near a water source.


Additional Searches

It is also possible to carry out further searches with gas companies, electrical and telecommunication companies to ascertain whether they have any apparatus passing through the site. 


Indemnity Insurance

If you do not want to undertake searches but would like some security against any issues which could arise in the future, a no search indemnity insurance policy can be taken out to provide cover against any issues which would have been revealed by the searches insured against. 


If you are thinking of purchasing a commercial property a member of our Commercial Property Team would be happy to discuss the searches with you in more detail.