One of the most common questions we receive from clients is: What's the point of carrying out commercial property searches?
With costs often in the region of £2,000 per property, especially where multiple properties are involved, the investment can feel significant.
However, the value of these searches in protecting your interests cannot be overstated.
What are the risks of not doing commercial property searches?
Proceeding with a property purchase without conducting appropriate searches means doing so without full visibility on potential risks. These searches reveal crucial legal, environmental, planning and practical matters that could seriously affect the property's value, usability and future development potential.
Without them, a buyer may:
- Discover restrictive planning conditions after purchase
- Inherit financial liabilities or legal obligations
- Be unable to build, let or sell the property in future
- Face costly remedial work or enforcement action
In some cases, searches uncover issues so significant that a buyer may ultimately decide not to proceed with the transaction.
What commercial property searches should a buyer carry out?
Here's a summary of the most commonly required commercial property searches and the risks they are designed to highlight:
Local authority search
Typically, the most comprehensive and valuable search. It provides key information on:
- Planning permissions and building regulation approvals
- Enforcement notices
- Highway schemes
- Environmental designations
- Whether land is registered as common land or a village green
Without this, a buyer may unwittingly take on breaches of planning control or unauthorised building works. Local authorities have the power to enforce compliance, which could result in significant cost, demolition of unauthorised structures, or a restriction on use.
Local land charges search
This reveals any:
- Compulsory purchase orders
- Tree preservation orders
- Conservation area designations
- Planning enforcement notices
- Financial charges registered by the council
Financial charges could become the buyer's liability post-completion and materially affect the decision to proceed.
Drainage and water search
This identifies:
- Mains water and sewer connections
- Location of public sewers and pipes
Such infrastructure could affect building plans or pose legal restrictions. Knowing whether the property is properly serviced is critical to assessing its suitability.
Environmental data search
Often referred to as a desktop environmental search, this identifies:
- Risk of land contamination
- Flood risk data
- Historic land use
- Climate change impacts
While it doesn't involve physical site investigation, the data can help buyers decide whether to proceed, renegotiate, or instruct further site-specific investigations.
Desktop ground search (including mining and subsidence risks)
This search includes a coal mining report, revealing:
- Past or ongoing mining activity
- Mine shafts
- Subsidence risks
- Other ground perils including radon, coastal erosion, and clay shrinkage
Untreated mine shafts or high subsidence risk may deter construction plans or invalidate insurance.
Chancel repair liability search
This search indicates whether the property is subject to chancel repair liability, an obscure but enforceable obligation to contribute to the cost of repairing a local church chancel. Buyers inheriting such liability could face unexpected costs.
Highways search
Clarifies whether:
- The roads serving the property are publicly adopted or privately maintained
- The buyer will need rights of access over private roads
If a road is unadopted, the buyer may need to contribute to maintenance or risk having no formal right of access.
Index map search (Land Registry)
This search:
- Confirms if the land is registered
- Identifies overlapping titles or unregistered gaps
- Reveals unknown leases or third-party interests
Unregistered interests or gaps in title can represent significant legal risk and may require further investigation.
Utility searches
Utility searches identify:
- Locations of gas, electricity, and telecoms infrastructure
- Rights held by utility providers
This information is vital if the buyer intends to carry out development, excavation, or expansion work on the site.
Why lenders require searches
It's important to note that most lenders will insist on a full suite of searches before advancing funds for a commercial property purchase. Skipping them is rarely an option if the purchase involves borrowing.
What does this mean for you?
The more information a buyer has before exchanging contracts, the better equipped they are to assess legal, environmental and financial risks.
We strongly recommend that all commercial buyers carry out comprehensive property searches as part of their due diligence.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
