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Question of the week

Pre-Contract Searches and Enquiries

Property Law and Practice · SQE1-style single best answer

A solicitor has today received the draft contract and title documents for a man's purchase of a house for £330,000. The seller wants to exchange within four weeks and complete a fortnight after that. The man's mortgage application has been submitted but no offer has yet been made. He asks the solicitor to hold off ordering the searches, which will cost about £400, until the offer arrives, so that the money is not wasted if the lender declines to lend.

What should the solicitor advise the man about the timing of the searches?

  1. Option A. Incorrect answer. To wait for the mortgage offer, because a lender will not accept searches ordered before it lends.
  2. Option B. Incorrect answer. To wait until the seller has answered the pre-contract enquiries, so that only the searches actually needed are ordered.
  3. Option C. Incorrect answer. To order the searches a month before completion, so that the replies are current on the day.
  4. Option D. Incorrect answer. To order the searches after exchange, because the man is not committed to buy until then.
  5. Option E. Correct answer. To order the searches today, because the local authority search alone may take several weeks to return.Correct

Why

The correct answer is E. Searches are ordered as soon as the draft contract and title arrive, and always before exchange. The local authority search is the long pole: turnaround varies widely between councils and can run to several weeks, and waiting on search replies is the commonest single cause of delay in a residential chain. On this timetable — exchange in four weeks — the searches must go today if the date is to be met. The £400 buys the information the man needs in order to decide whether to commit at all, and his lender will in any event require the results before it releases funds.

A is incorrect because there is no such rule; a lender requires the results before completion and does not object to searches predating its offer. B is incorrect because searches and enquiries are pursued in parallel, not in sequence; nothing in the replies would make the standard searches unnecessary. C is incorrect because searches must be in hand before exchange, when the man becomes bound; results are in practice treated as reliable for about six months. D is incorrect because after exchange it is too late: the man is contractually committed, and an adverse result gives him no way out.

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