The Council of Property Search Organisations (CoPSO) has today written to the Law Society, The Society of Licensed Conveyancers (SLC), CILEx, BLG and CA and provided them with a note setting out when Search Insurance may be used as prescribed in the Search Code.
With delays in the provision of searches now being a major issue across parts of England and Wales, there has been increasing focus on the use of Search Insurance in mitigation of these delays.
As an extreme example, there are currently no searches available at all on properties domiciled in the London Borough of Hackney; Hackney Council has advised that this is likely to remain the case well into the Spring of 2021. Clearly the use of Search Insurance is key to transactions being able to progress in such circumstances.
The note that CoPSO has sent the representative bodies summarises the circumstances when it is appropriate to use Search Insurance, and the sort of insurance that is acceptable under the Code.
James Sherwood- Rogers, Chairman of CoPSO said:
“With the expiry of the SDLT holiday on 31st March 2021 looming large, and with a hyperactive property market, conveyancers are under intense and increasing pressure to complete property transactions before the SDLT holiday comes to an end. As has been well publicised, as a direct result of the Covid pandemic, there are many locations in England and Wales where the provision of searches is now subject to delay, and in some specific local authority areas considerable delays. The appropriate use of Search Delay Insurance has an important role to
play where this is the case. The Search Code has always allowed for the use Search Delay Insurance to prevent delays holding up
transactions unnecessarily and CoPSO and the Property Codes Compliance Board (PCCB – which regulates the Search Code), has been contacted recently by a number of conveyancers and solicitors asking in what specific circumstances the use of insurance is appropriate. it was decided that it would be useful to set out the provisions of the Search Code as it relates to the use of Search Insurance so that this can be widely disseminated across the conveyancing profession.”
Key principles of the Search Code with respect to Search Insurance
- Whenever it is available home buyers need definitive search information. Insurance as a replacement for information is not in the best interests of home buyers.
- Firms subscribing to the Search Code will only provide ‘search delay insurance’ where local authority delays mean search information cannot be obtained within the timeframe required by the conveyancer and their client.
- With the conveyancer’s agreement the firm will provide an incomplete search with the missing information covered by search delay insurance.
- The firm will then provide the conveyancer with the missing information as soon as it becomes available.
- This ensures that the transaction can proceed quickly, the missing information is always provided later, and if any of that information proves to be adverse more timely action may be taken as this is covered by the delay insurance.
- ‘No search’ insurance products which provide insurance as a substitute for definitive search information, not just as cover for any delay until the search information is available, are not compliant with the Search Code.
