Property transactions in the UK are founded upon the ancient legal principle ‘buyer beware’ which comes from the Latin term ‘caveat emptor’. Although this expression is beloved by lawyers it has serious implications for property buyers because any defects, whether physical or legal, will end up passing with the property to the buyer upon completion.
Given the unknowns the average property buyer faces when they proceed with what is often the largest personal transaction they have made, it is incumbent upon the professionals acting on their behalf to do so with the appropriate degree of thoroughness.
Unfortunately professionals of all descriptions, including solicitors, can slip up from time to time but the innocent client should not have to suffer the financial consequences of professional negligence.
Buying property carries with it an unusually large responsibility for professionals due to the relative size of the transactions from the buyer’s perspective and due to the complexities. Most people have some awareness of the need for property to be physically inspected to ensure that it is in the shape they believe it to be. However, many of those buying property, particularly those doing so for the first time, are less aware of the myriad of legal issues that must be reviewed.
The legal issues may be lurking in a variety of places and it is the job of the solicitor to peer into these to see if there is anything that needs to be drawn to the buyer’s attention. Although solicitors usually advise that a physical survey is carried out, this is not done by them. Solicitors look at the legal title of the property to check things such as the extent of the premises, rights of way and restrictions on what owners can and cannot do with the property. Questions are also raised of the sellers to see if disputes have been had with neighbours or if known but undocumented rights might exist.
Importantly, a number of searches are also usually carried out to check for issues such as environmental problems or whether any roads might be built nearby for example. Although certain searches are almost always done, the types and extent of additional searches will depend upon the specifics of the area. Coal mining searches may be of particular importance in areas of the country where mining has or is being carried out for example.
Understanding the Implications of the Report on Title
Wherever there are issues that crop up on the property title or in the searches, these should be brought to the attention of the buyer by the solicitor. The buyer (and any lender) will be given a report on title prior to exchange of contracts which should explain any issues that have arisen. If buyers are uncertain of any points made, they should speak to their solicitor.
If for some reason legal issues arise post-completion and these were not mentioned in the report on title – for example, they were missed because the solicitor failed to carry out the appropriate investigations - the buyer may be able to make a claim for negligence. The report on title sits at the very heart of the conveyancer's duties, obligations and liability and can be used as the basis of a complaint with potential referral to the Legal Ombudsman or a legal claim against the solicitor.
For specialist advice contact Peter Gourri today by email PGourri@rollingsons.co.uk or telephone 0207 611 4848.