CDS launches Official Local Authority Search Insurance
An essential part of any conveyancing transaction, a Local Authority Search is a search of the relevant Local Authority’s records for a particular property.
The Official Local Authority Search (OLAS) is conducted by the staff employed at the Local Authority and comprises two separate parts, the LLC1 (the Official Certificate of Search) and the CON29R (Enquiries of the Local Authority).
The matters covered by the OLAS result include a list of all relevant entries identified in the Land Charges Register (which consists of 12 parts, including Specific Financial Charges, Planning Charges and Listed Building Charges) and the 13 subject areas which are covered by CON29R. These include matters such as:
- Planning and Building Regulations
- Roads (footways and footpaths) and Nearby Road Schemes
- Railway schemes
- Traffic Schemes
- Notices, Orders, Directions and Proceedings under Planning Acts
- Conservation Areas
- Compulsory Purchase Orders
- Radon gas
The OLAS result contains a disclaimer restricting the Local Authority’s liability in respect of an incorrect reply to those that were made negligently.
But what recourse would your client have if, for example:
- your client were to buy a property on the understanding, pursuant to the OLAS, that the road it abuts is publicly adopted, but later finds out it is, in fact, a Private Road and that the OLAS was incorrect?; or
- the OLAS, in error, did not reveal a road proposal for a dual carriageway close to the boundary of the property and the Local Authority refused to accept they were at fault or that the dual carriageway could potentially affect the property’s value?; or
- the OLAS did not, but should have, revealed a home improvement grant?
The answer is, in the absence of proving negligence on the part of the Local Authority, there is nothing that could be done. Your client is very unlikely to receive any compensation in relation to the continuing upkeep of the road, any devaluation of the property, or the amount of the liability for the home improvement grant.
In all of the above examples, if your client had taken out an Official Local Authority Search Insurance Policy they would have been able to claim against this policy for loss of value or for the amount of the liability under the home improvement grant, in accordance with the terms of this policy. All your client would need to show is that the OLAS result should have revealed the issue that has created the loss and that a loss, as defined by this policy, has been incurred.
From as little as £5.00 inc IPT for a Residential Policy or £12.00 inc IPT for a Commercial Policy, your client (the buyer) will be protected, for up to a maximum of £2,000,000, in the event that an issue that should have been revealed in the Official Local Authority Search result but was not has a detrimental effect on the market value of the property.