The Law Society has strongly criticised a plan by the Land Registry to take over the administration of the registers of Local Land Charges. The Society, which represents solicitors in England and Wales, says that these plans “could lead to a worse service for conveyancers.”
Why is this relevant to homebuyers? If the land registry takes over registration of local land charges then solicitors will have to make two separate searches instead of one, which seems pointless - and may mean that buyers will have to pay more.
Buyers are generally aware that their conveyancing solicitor carries out a 'local search' with the local council before exchange of contracts. The local search at present includes a search of the Local Land Charges register and a set of general enquiries.
Why buyers need to know about Local Land Charges
Local Land Charges are a variety of legal obligations which local authorities are required to register against a property under various legislation. They include restrictions or prohibitions on the use of a property and charges securing payment of money.
Such charges are binding on successive owners and enforceable against the property. If you buy a home which is subject to one of these charges it will affect you whether you are aware of it or not. So it is important for buyers to know about any such charges registered against the property they are buying.
Each local council is legally required to maintain a register of Local Land Charges. There are 12 different parts of the local land charge register, but some of them are rarely encountered. The most common are
- Financial Charges - i.e. where money is payable to the council. Such a charge might be registered when a council has made a grant to the owner of a property which is repayable in certain circumstances. If such a charge has been registered and any money is not paid by the seller on completion the buyer will become responsible for repayment.
- Planning Charges - such charges are registered under planning legislation. One of the most commonly encountered charges is an 'Article 4 direction' - in other words the council has made an order in respect of the property which removes the right of the owner to make further alterations or extensions without needing planning permission.
- Listed Buildings Charges - when a property has been listed as a building of special architectural and historic interest this will be recorded. Such buildings are subject to tighter planning control, which will be relevant to any buyer.
Will the land registry's plans help homebuyers?
At present the land registry's main function is to register property titles and ownership. This includes registration of mortgages and other financial charges against a property.
So it is arguable that as local land charges are also charges against property it makes more sense for them to be recorded by a national entity rather than just locally.
If this was done then a buyer's solicitor would be able to make a simple on-line search to find out if there is anything registered against a property.
Flaws in the proposed scheme
But the Law Society has pointed out that there are a number of flaws in the scheme proposed by the land registry.
In the first place the Local Land Charges search is only one part of the local search. It will still be necessary to submit the general enquiries to the local council as these provide prospective buyers with a wide range of information held by the council relating to a property.
The enquiries provide information on items already in existence as well as items that are in the pipe-line or under consideration by the council, or awaiting approval.
Another problem is that the land registry only proposes to provide search results for charges registered within the previous 15 years. The Law Society says 'The omission of potentially relevant information that is more than 15 years old is a key concern and needs reconsideration.'
Many Local Land Charges, for example those listing buildings, date back more than 15 years. The planned change would leave buyers in the dark on important legal information about the property they are buying.
Plans will not benefit property buyers
The plans will not result in either quicker conveyancing or cost-savings for buyers. It will still take as long to get replies to the general enquiries from councils. Separate fees will have to be paid for both searches, which could be higher than those payable at present.
It is unlikely that there would be any savings for local councils either. They will still need to employ staff to forward details of any new charges requiring registration to the land registry.
Many see this proposal by the land registry as a way of expanding its role and generating an additional source of income. As the government has just put forward plans which could lead to privatisation of the registry, perhaps they are looking for anything which would increase its attractiveness to potential investors.
Overall it looks as if there is little merit in the proposed change - it would not provide any better or cheaper service for property buyers. Indeed it would provide a worse service than at present if charges over 15 years old are to be ignored. So why not leave things as they are?