Unless results of all search results are obtained and are satisfactory to the buyer, the conveyancing solicitor cannot proceed with the completion. This article discusses about the procedure to be followed when search results are less than satisfactory.
In most cases, these results may either not show subsisting entries or may merely confirm information that is already known. Thus, no further action is required. But if an entry protects restrictive covenants, the buyer should;
- Check details about the entry.
- Check if the entry is likely to adversely affect the property; and if it is so, he should contact the seller’s conveyancing solicitor and ask him to remove the entry at the earliest.
- When the search relates to the Land Charges Department, the solicitor must make arrangements for a copy of the entry (by using form K19).
- Ensure that everyone involved in the contract, including the buyer/seller, lender, and other solicitors (subject to confidentiality) are informed about the situation. This is because charges may cause a delay in the completion process. Sometimes, it may happen that the seller is not ready to remove an entry; in such an instance, the parties to the contract are subject to remedies due to a breach of contract.
Removing an entry from the register
As said earlier, once the buyer’s conveyancing solicitor comes to know of a charge on the land, he is required to request the seller to remove these charges. Such an application shall be accepted by the Chief Land Registrar only when it is signed by the concerned person or (a person acting on his behalf) and applications from conveyancing solicitors are not accepted. Hence the seller should not accept a undertaking that the charges shall be removed on completion of transaction. This was the basis of a judgment in the Holmes vs Kennard (H) and son (a firm) 1985 49P and CR 202. When the person who is to be benefited from the charge refuses to remove them or cannot be contacted, the court can remove these entries using its own discretion. A very common reason for charges is the fact that it may have been made in favour of the spouse. Such a charge can be removed by producing the death certificate of the spouse. When the spouse is alive, such a charge can be removed by the seller only when it is signed by the spouse.
Irrelevant land charges entries
An entry made on the charges register is valid only against the name of the estate owner during the period when he is the owner of the land. Entries made on or after this time should not affect the buyer. The computerised system which is used for searches often throws up entries that are irrelevant to the transaction or names that are very common like John Smith When this occurs, the buyer’s conveyancing solicitor is required to seek a certificate from the seller’s solicitor that the entry is irrelevant and does not relate to the owner. Such a certificate serves as an undertaking and hence should be given very carefully by the conveyancing solicitor. This is especially important for entries related to bankruptcy proceedings.
Official certificates of search
Registered land
Although a search enquiry is a reasonable source of information to determine the legitimacy of the seller’s claim, they cannot be termed as conclusive in favour of the buyer. Under such circumstances the buyer will have to purchase the property subject to entries on the Register. This was a judgment in the Parkash vs Irani Finance ([1970] Ch101) case. However, the buyer is liable for compensation if any loss occurs.
Unregistered land
In the case of unregistered land, the certificate of search issued by the Land Charges department is conclusive in favour of the searcher. The buyer accepts his interest in the property free of entries that are on the Register but not made known by the certificate. A buyer who suffers loss because of an error in the official search certificate is entitled to claim compensation from the Chief Land Registrar. However, this right is not a statutory right. The conveyancing solicitor who conducted these searches shall not be liable for compensation provided he has undertaken a search earnestly and submitted the search form after it was filled up completely.
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