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Commercial Property Searches & Guide To Commercial Property

Regardless of whether you’re looking to buy a commercial property or rent a commercial property, property searches are an essential part of any transaction.

However, for those new to commercial property, it can be a little confusing to understand the difference between ‘searching for commercial property’ and ‘commercial property searches’.

In the following post, we will outline all the various searches you should do when considering renting or buying a particular commercial premises. 

 

Types of Searches

Before we address what type of commercial property searches are available it’s important to understand why searches are vital when buying or renting a property.

In property, as a buyer you are subject to the phrase Caveat Emptor. Translated from Latin, this basically means ‘let the buyer beware”, and refers to the fact that once the property’s contracts have been exchanged, you cannot later pull out of a deal because of something discovered at a later date. 

As a result of the contract exchange being the final and irreversible part of the transaction process, undertaking property searches prior to exchanging contracts is vital to ensuring that the commercial property you seek is as expected. Searches are commonly conducted by the local council and private surveyors and act as a layer of assurance that the property has no underlying flaws or structural issues.

In the event that you’re taking out a commercial mortgage on the property, your lender will most likely require you to do a number of searches before they’re willing to lend you any money towards the property.

Below we have listed the types of various different types of commercial property searches, regardless of whether you’re buying with a mortgage or indeed a cash buyer, it’s important that you carry out most, if not all of the following searches.

 

Local Authority Search

A Local Authority search is a property search of the local council/authority’s Land Charge Register. Aimed at providing information that could affect the property, the Local Authority Search will inform you if there are any local land charges registered against the property, restrictions on the development, or planning conditions which may interfere with your intended use of the property. 

In addition, a Local Authority Search will also reveal whether the roads that serve the property are maintainable at public expense or a private cost, as well as seeking to discover if there are any proposed traffic or railway schemes in the neighbouring area.

The cost of a Local Authority Search is commonly in the region of £150-£300, but will vary depending on which local authority the property falls under. 

 

Drainage and Water Search

A Drainage and Water Search is a commercial property search that aims to clarify a variety of questions surrounding the water supply at the commercial premises. 

The search, which usually costs between £100 – £200 is submitted to the water company responsible for serving the property and shows whether the property is connected to the mains water supply, the location of water mains and drains, as well as whether the foul and surface water drains to a private sewer,

 

Environmental Search

An Environmental Search will determine whether the property is at risk of flooding as well as seeing if it has been built on contaminated land, and is thereby at risk of contamination. 

As the name suggests, contaminated land refers to the existence of hazardous substances that are either on or within the land. More often than not, contaminated land is usually found at sites which used to be owned by industrial and manufacturing firms that may have not properly disposed of their waste. 

There are numerous health risks that could be posed by building on and inhabiting contaminated land. However, without conducting an Environmental Search, it’s impossible to find out the contaminant and the impact it could have on your health and the environment.

Typically, an Environmental Search carried out is using historic data and maps of the area to ascertain the likelihood of contamination. Having a property that’s built on contaminated land could potentially be expensive as if the original polluter cannot be found, the current owner (or occupier) may be liable to pay under the Environmental Protection Act 1990.

The cost for an Environmental Search is in the region of £150-£250, however, prices will vary depending on the location of the property.

 

Highways Search

A Highways Search will reveal the full extent of a publicly maintained highway to ensure you have the correct legal rights of access to the property. 

While some of the information regarding private & public roads will be revealed by the Local Authority Search, it is still considered good practice to conduct a Highways Search to show the full extent of highways that serve your commercial property. 

Unlike a Local Authority Search, a Highways Search will reveal whether there are any parcels of land, or dwellings between your property and the highway that are not publicly maintained. Should the report find any infringing land, you might need to conduct an additional investigation to resolve any potential access issues. 

The average cost for a Highways Search is typically around £50, but the price can vary depending on the location.

 

Chancel Search

A Chancel Search is a unique search that will reveal whether the commercial property is liable to pay for the upkeep of a local church.

Under an historic law, the cost of repair for certain churches within a local authority was to be shared by land and property owners in the area. 

While the costs incurred should your property be liable for chancel repair are usually fairly minimal, it can be an unwanted cost. As such, if maintaining a tight budget is a priority, it might be worth conducting a Chancel Search to see if your desired commercial property is subject to a chancel repair liability.

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