Annual Report: Property search ‘fails’ to mention land earmarked for a new town

Published on Tuesday, 04 October 2016. Posted in Case Studies

TPO’s work with other trade bodies and Compliance Boards adds to the scheme’s unrivalled knowledge of all sectors of the property industry. This case concerns the actions of a search provider after a buyer alleged it had failed to disclose a planning application for a new town in the vicinity of the property she had purchased.

Annual Report Case Summary: PCCB Disclosure of Planning Application

This case concerns a dispute referred to The Property Ombudsman (TPO) from a buyer concerning the search provider’s alleged failure to disclose a planning application for a new town in the vicinity of the property she purchased.

During the conveyancing process in connection with her purchase, the complainant’s solicitor instructed the search provider to commission a local authority search.  The search highlighted that there were a number of minor planning applications within 750 metres of the property, all of which were listed on the report.  The report also highlighted additional planning policies relevant to the area around the property, adopted by the local District Council.  This included a local plan document which had been put out for consultation prior to the complainant’s purchase. The purpose of a local plan, once adopted, is to enable local councils to determine where future development takes place and guides future planning applications submitted to them.

The local plan identified the land north of the property as being for housing and transport use, and specified that this would be intended to accommodate a new town and associated infrastructure for around 6,000 new homes. The land south of the property was intended to be open land, defined as being a new country park, although land south-west of the property was to be allocated for future housing development.

The complainant said that she consulted with her solicitor about the land north of the property being designated for housing and was informed that the only housing that was planned were a few dwellings behind a local pub north-east of the property. The complainant explained that she thought the new town was two miles north-east of the property and continued her purchase of the property. The complainant only realised the implications, and location, of the new town, after she had completed on the purchase, when she was asked to attend a local meeting about planning proposals on land immediately adjacent to the property.

The complainant alleged that the search was misleading and failed to mention the proposals for the new town in sufficient detail. She considered that the search provider should financially compensate her for the fact that, at some point in the future, she believed that she would find it difficult to sell the property which, she believed, would invariably drop in value.

The complainant claimed that the search failed to disclose in detail the proposals to allow a new town to be built north and south-west of the site of the property, but rather only referred to the local plan. Under Paragraph 2 of the Search Code, the search provider was expected to act with integrity, and carry out the search with due skill, care and diligence, which included accurately reporting the most up-to-date available information and risks associated with the property from the sources consulted. This also meant providing complete search results based on a search of all legitimate, commercially and readily available sources (that is, a physical examination of public records; a response from an official entitled to provide the information; their own current records; or commercially available data).

In this case, the Ombudsman was satisfied that the search provided enough information to allow the complainant to discover that a significant degree of development would be taking place both north and south-west of the property. All the planning applications listed in the report made reference to the ‘New Community’. The fact that the local plan was referred to would have given the complainant (or her solicitor) further opportunity to investigate the extent of the proposed new town.

The Ombudsman was satisfied that an accurate local search was provided. The complaint was not supported.

To download a copy of TPO's 2015 Annual Report and view more of the report's case summaries, please click here.