Learning Outcomes
After reading this article, you will be able to identify and explain the main pre-completion searches required in property transactions, distinguish between searches for registered and unregistered land, understand the legal effect of priority periods, and apply these principles to SQE1-style scenarios. You will also be able to advise on the timing, purpose, and consequences of search results for both buyers and lenders.
SQE1 Syllabus
For SQE1, you are required to understand the purpose, process, and legal effect of pre-completion searches in property transactions. Focus your revision on:
- The types and functions of pre-completion searches for registered and unregistered land
- The legal significance of priority periods and their effect on title
- The timing and coordination of searches in relation to completion
- The consequences of adverse search results and appropriate responses
- The requirements for bankruptcy and company searches on completion
Test Your Knowledge
Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.
- What is the main legal effect of an OS1 search in a registered land transaction?
- Which search must be repeated against the seller’s name immediately before completion in an unregistered land transaction?
- Why is a bankruptcy search carried out against the buyer in a mortgaged purchase?
- What is the consequence if a buyer’s application to register a transfer is made after the expiry of the OS1 priority period?
Introduction
Pre-completion searches are a critical step in property transactions. They are carried out after exchange of contracts but before completion, to ensure that the buyer and any lender are protected against last-minute changes or undisclosed interests affecting the property. The correct use and timing of these searches is essential for securing good title and avoiding costly mistakes.
Pre-completion Searches: Purpose and Overview
The main purpose of pre-completion searches is to confirm that the title and parties’ circumstances have not changed since the initial investigation and to secure a period of legal protection (the priority period) for the buyer and lender. These searches also help to identify insolvency risks and ensure that the buyer is not bound by new adverse entries or undisclosed liabilities.
Key Term: pre-completion search A search carried out after exchange of contracts but before completion to update title information, check for new adverse entries, and secure a priority period for registration.
Pre-completion Searches for Registered Land
For registered land, the key pre-completion search is the official search with priority (OS1 or OS2) at HM Land Registry.
Key Term: OS1 search An official search with priority of the whole of a registered title, providing a 30-working-day priority period for registration.
The OS1 search is made against the property’s title number, using the “search from date” on the official copies obtained during the pre-contract stage. If only part of a registered title is being transferred (e.g. a newbuild plot), an OS2 search is used instead.
The OS1/OS2 search serves two essential functions:
- It updates the official copies to reveal any new entries (such as a new mortgage or restriction) since the last search.
- It grants a 30-working-day priority period. Any application to register the buyer’s transfer (and any lender’s charge) made within this period will take priority over any other entries made after the search date.
Key Term: priority period The period (usually 30 working days for registered land) during which the buyer’s application for registration is protected against later adverse entries.
Worked Example 1.1
A buyer’s solicitor carries out an OS1 search on 1 June, receives a clear result, and completes the purchase on 10 June. The application to register the transfer is made on 25 June. On 15 June, a third party registers a charge against the seller. What is the effect?
Answer: The buyer’s application is protected by the OS1 priority period. The third party’s charge, registered after the OS1 search but before the buyer’s application, will not take priority over the buyer’s transfer, provided the application is made within the 30-working-day period.
Pre-completion Searches for Unregistered Land
For unregistered land, the main pre-completion search is a Land Charges Department search (K15) against the seller’s name.
Key Term: K15 search A Land Charges Department search against the seller’s name in unregistered land, revealing registered land charges and bankruptcy entries.
This search must be carried out immediately before completion, even if a previous search was done at the pre-contract stage. The K15 search result gives a 15-working-day priority period. If completion takes place within this period, the buyer takes free of any entries made after the search date.
If the seller is a company, a company search at Companies House should also be repeated immediately before completion to check for insolvency or new charges.
Bankruptcy and Company Searches
A bankruptcy search is required against the buyer in any transaction involving a mortgage. This is to protect the lender, as a bankrupt buyer cannot give good security.
Key Term: bankruptcy search A search (K16) against an individual’s name to check for bankruptcy orders or petitions, required for buyers in mortgaged purchases.
If the seller is an individual and the property is unregistered, a bankruptcy search is included in the K15 search. For registered land, a separate bankruptcy search is not usually required against the seller, unless there are concerns about solvency.
If the buyer or seller is a company, a company search at Companies House is carried out immediately before completion to check for insolvency, winding-up petitions, or new charges.
Timing and Coordination
Pre-completion searches must be carried out as close as possible to the completion date to ensure the information is current and the priority period covers the registration application. If completion is delayed beyond the priority period, the searches must be repeated.
Key Term: completion The stage in a property transaction when the balance of the purchase price is paid, the transfer is dated, and legal title passes (subject to registration).
Consequences of Adverse Search Results
If a pre-completion search reveals a new adverse entry (such as a new mortgage, restriction, or bankruptcy order), the buyer’s solicitor must raise the issue with the seller’s solicitor and may need to delay completion until the issue is resolved or an undertaking is given to remove the entry.
If the buyer’s application to register is made after the expiry of the priority period, any new entries made after the search date may take priority, potentially defeating the buyer’s title or the lender’s security.
Worked Example 1.2
A buyer’s solicitor completes an OS1 search on 1 March, but due to an administrative error, the application to register the transfer is not made until 10 April. On 20 March, a third party registers a charge against the property. What is the effect?
Answer: The OS1 priority period expired before the application was made. The third party’s charge, registered after the OS1 search but before the buyer’s application, may now take priority over the buyer’s transfer.
Additional Pre-completion Steps
Other pre-completion steps include:
- Checking the Completion Information and Undertakings form (TA13) for practical arrangements and undertakings to discharge any existing mortgages.
- Ensuring all funds are in place for completion.
- Confirming that the transfer deed is properly executed and ready for dating on completion.
Revision Tip
Pre-completion searches are only effective if the application to register is made within the priority period. Always diarise the expiry date and submit the application promptly after completion.
Key Point Checklist
This article has covered the following key knowledge points:
- Pre-completion searches are essential to protect the buyer and lender after exchange and before completion.
- For registered land, an OS1 (or OS2) search provides a 30-working-day priority period for registration.
- For unregistered land, a K15 search against the seller gives a 15-working-day priority period.
- Bankruptcy and company searches must be repeated immediately before completion to check for insolvency.
- If the application to register is made after the priority period, new adverse entries may take priority.
- Any adverse search result must be resolved before completion or the transaction delayed.
Key Terms and Concepts
- pre-completion search
- OS1 search
- priority period
- K15 search
- bankruptcy search
- completion
