Property search reports impact on everyone involved in the home buying process.
While it will typically be the conveyancer that will commission these reports, if the information that comes back is not found to be reliable or is not from a trustworthy source, this will have a knock on effect.
As one of the first people to speak with the buyer, the mortgage broker has an important role to play in making sure their customers are aware of the importance of only accepting search reports from a trustworthy source – a message they can in turn pass onto their solicitor.
Every property transaction in the UK relies on the timely provision of key property information.
This ‘due diligence’ pack is usually taken care of by the solicitor and contains the property’s vital statistics – critical details that determine whether the property is a healthy investment.
This pack, alongside the valuation and proof of title, determines if the transaction should proceed.
The pack contains a range of searches, including a search of Local Authority data and an environmental search, as well as Drainage and Water, Chancel and other search reports as appropriate.
In order to ensure that these searches meet the highest levels of accuracy, CoPSO created the Search Code to provide peace of mind to the lending industry at a time when focus on quality and risk is at its highest.
A search of the Local Authority records, whether by a private company regulated by The Search Code or the council themselves, should not differ in terms of quality. However, in many cases, it can often prove quicker and less expensive if provided by a commercial provider.
Most solicitors, acting on behalf of lenders and individuals, order their searches through one of the many specialist private search companies in the UK. These offer a mix of personal and Local Authority searches, dependant on location and on how well an individual Local Authority performs.
We now have an extraordinary range and depth of information about individual properties available to potential home buyers and their lawyers, to help them make the right purchase decision.
In addition, there is a range of insurance products available to cover any risks that may be identified by searches, helping transactions proceed smoothly and quickly.
Regardless of source, home buyers should always be in a position to make a fully informed decision on any property they purchase and have the option to take out insurance to cover any risks that may exist.
Not only is there protection for consumers in the home buying process, but in effect this extends to mortgage lenders as well.
If a search report is compiled correctly, there should be no unpleasant surprises down the road that could affect the value of a property, which represents the security for a mortgage.
While lenders may have previously put little emphasis on the search report and where it was sourced, leaving this entirely in the hands of the solicitor, things are changing.
The growing threat of fraud and a heightened level of risk have meant that all elements of the home buying process are now under greater scrutiny – and that includes searches.
While property searches are typically sourced by the solicitor, banks are increasingly under pressure to protect their customers and accepting a search report that is later discovered to be fraudulent or inaccurate could cost the home buyer, as well as the lender dearly.
As a result, in the advent of personal searches, the introduction of the Search Code is a meaningful and independently monitored code of practice for private search companies, providing a recognised stamp of quality within the industry. Many lenders now stipulate that any conveyancers acting for them must ensure that they only commission private searches from Code subscribers.
The Search Code is designed to provide protection for home buyers, sellers, estate agents, conveyancers and mortgage lenders, who all rely on the information included in property search reports undertaken by subscribers. It sets out minimum standards that organisations compiling and selling search reports have to meet.
All subscribers to the Code are listed on a register, maintained by the Property Codes Compliance Board (PCCB), and all display the Search Code logo on all reports they produce.
The Search Code has become an important part of the landscape and we would like to see all lenders require that the conveyancers acting for them only source private sector searches that are produced by Code subscribers.
CoPSO has launched a campaign directed at the lending community to highlight the value of the Search Code and the importance of only using Code compliant providers.
While the main focus for our initial campaign will be the lending community, brokers have an important role to play in raising awareness among consumers.
A good broker will always have their customers’ best interest at heart.
By making clients aware of the importance of only accepting search reports from Code subscribers and encouraging them to speak to their conveyancers about this from the outset, brokers can ensure that their customers have the best possible protection and are making a fully informed purchase decision.
The Search Code is an important mark of quality and we would urge all those that rely on the information provided in search reports to ensure their providers are Code complaint.
