ETSOS are urging conveyancing practitioners to use planning reports more widely in their standard search enquiries in a move to support the industry deal with the implications of the “Consumer Protection from Unfair Trading regulations” (CPR’s).
In a key change to previous legislation, material information, that is to say information that would affect a transactional decision, must be made available. A number of recent news items have brought the issue of material information into the spotlight where the liability for such within the legislation, lies with the vendor and the trader.
Until a body of case law is established, the Law Society acknowledges that the implementation of CPR’s will be “somewhat uncertain.” Indeed the recent misrepresentation claim Thorp v Abbotts ruled in favour of the vendor, despite them being aware of a proposals for large scale development nearby. The judge decided that:
- The starting point in a conveyancing transaction is still ‘caveat emptor’.
- The questions on the SPIF (Seller’s Property Information Form ) are intended to be capable of answer by a lay person, and should not be interpreted in such a way that expert advice would be needed to understand the information required.
- The other questions in the SPIF were consistent with an interpretation that the enquiry raised by question 3 was to matters which were either directly about the property itself, or were concerning immediately adjoining properties, not regarding planning proposals a distance away from the property.
- Question 3.2 referred to negotiations and discussions specifically with a neighbour or authority affecting the property. Discussion with someone not in a position to carry out or authorise the proposal, such as a local resident, would not affect the property because the outcome of the discussion would have no bearing on whether the proposal went ahead or not. To find otherwise would mean that sellers were required to disclose matters that may be no more than gossip.
The lesson to be learnt… take control of the transaction and be pro-active. Firms using ETSOS report a growing concern amongst their clients regarding the impact of developments on the enjoyment of their potential purchase.
While in the past there has been an assumption from homebuyers that conveyancers were undertaking investigations into planning, ETSOS are supporting firms to more proactively advise of the limitations of planning enquiries in standard Local Authority searches.
Local Authority reports will report only on planning applications relating to the property itself (with the exception of road and rail applications which cover a 200m radius), while a planning report will investigate commercial and residential planning applications, land use designations, theft insurance claims data, local educational performance and local amenities.
By alerting your client to the risks posed and advising them on undertaking additional investigation you are truly acting in the best interests of your client, whatever they decide to do; without the facts they can’t make an informed decision.
Contact ETSOS today on 01524 220001 to find out more about the planning reports and information available for homebuyers.