Conveyancing
Recent developments in conveyancing practice: the CON29 and CON29O forms reviewed
Nicola Laver reviews how the revised CON29 and CON29O forms, which were introduced in July 2016, are working out in practice.1
About the author
Nicola Laver is a legal journalist and writer, and a former solicitor.
House buyers want to know as much information as possible about the property they intend to buy, before they finally commit to the purchase. Most lenders will insist on this before they agree to lend on a property.
Pre-contractual searches and enquiries are, therefore, carried out prior to exchange of contracts for the sale and purchase of property, enabling the purchaser to make an informed decision about whether or not to go ahead.
These enquiries include the revised enquiries of the local authority (CON29 and CON29O), which are now firmly in place. The revised forms are intended to increase the quality of information provided by local authorities, for the benefit of house buyers and lenders alike, by standardising both the authorities’ responses and the interpretation of council responses.
The new forms of enquiry went live in July 2016, after months of preparation and consultation. However, the introduction of the new forms has not been without teething problems – and revisions may yet be needed further down the line.
Let us turn the clock back a little: the previous CON29 forms of enquiry dated back more than 50 years, with a few updates made along the way. The CON29 contains standard questions agreed by central government, the Law Society and the Local Government Association. The enquiries cover issues, such as planning and controls, road and rail schemes near the property, roads and footpaths, conservation, contaminated land and so on.
However, it became increasingly difficult to access some of the information required by buyers and lenders. Voluminous public data is now held by local authorities, planning departments, water companies, and other authorities and organisations. This represents a huge and unprecedented range of information (much of it digital) that is valuable - and often vital - to property buyers, property developers, lenders and investors.
Furthermore, the original CON29 forms had become outdated, so that they did not take into account the latest legislative developments - impacting both property and other industry/ sector areas - where changes in law and practice have implications for property transactions.
Following substantial consultation, the new CON29 forms were finally implemented, with the main changes and additions relating to assets of community value, the introduction of the community infrastructure levy (CIL) and the Growth and Infrastructure Act (GIA) 2013. There are also around 30 new enquiries relating to drainage matters (reflecting legislative changes impacting the water industry); the new rail projects enquiry; additional enquiries in relation to planning and building decisions, and public rights of way; and a new question on flood defences and land drainage consents.
The revised CON29 forms reflect today’s need to be able to access this information as quickly as possible in a modern age, as well as the reality that technology is a key driver in both the legal and public sectors. Clients want to make decisions quickly – even the smallest delay can lead to property transactions falling through. So, how are the forms of enquiry working out in practice?
CON29 and CON29O forms: an overview of the changes
CON29 and CON29O were updated to take account of the latest changes in law and practice relating to property law and procedure. The most notable addition was the inclusion of enquiries in relation to community value and the introduction of the CIL and the GIA.
Further important changes were as follows:
- Three new enquiries for drainage matters, reflecting changes to legislation impacting the water industry.
- A new enquiry on rail projects asking if there are any proposals for a railway, light railway or monorail within the local authority’s boundary. Major rail infrastructure projects (for example, HS2) are a relatively new thing, but which potentially impact on property.
- Important additions in relation to enquiry 1 (‘Planning and building decisions and pending applications’), including details of certificates of lawfulness of proposed works for listed buildings; a heritage partnership agreement; and listed building consent order.
- Additional enquiries in relation to public rights of way, such as whether any public right of way abuts on or crosses the property and whether there are any pending applications to record such a public right of way (this is no longer an ‘optional’ enquiry).
- In addition to a few tweaks of the CON29O enquiries, there is a new enquiry on flood defence and land drainage consents in relation to the property.
There were initial fears that the changes to the CON29 and CON29O would lead to delays and higher costs for buyers. It seems that fears over delays were, at least initially, well-founded ; however, other issues have since become apparent.
Despite a three-year plus lead up to the final implementation of the new forms (the initial Law Society consultation on revising the forms was announced as long ago as June 2013), it seems that local authorities were still somewhat ill-prepared. When the new forms went live, there were delays as predicted. South Hams Council, for instance, reported delays of up to five weeks for local land charge and personal searches which usually took a maximum of 10 days.2
Stephen Murray, business development director at Property Search Group (PSG), says that, initially, there was quite a lot of confusion at local authorities. He explains: ‘The problem with the new CON29 forms is that we knew for a long time they were coming in, but local authorities weren’t quite ready - or didn’t really think about it until it was kind of happening.’ He says that while it slowed everything down, ‘it’s probably fair to say that within 3–4 months, it was back to normal’.
Local authorities are known to be operating on tight budgets, and there was no additional funding for the resources potentially needed to fulfil the wider range of information covered in the revised forms. Furthermore, councils operate differently, and the way in which they obtain the information varies from council to council, leading to marked variations in both the speed and cost of delivery.
Conveyancers typically use private companies to carry out searches and enquiries of the local authority. PSG, for instance, cross-references against previous searches in relation to the property (and properties in the vicinity) and often taps into additional data sets and research if any anomalies are revealed in the council data.
Stephen Murray says that the thorniest question was the sustainable urban drainage system (SuDS) question, which he describes as ‘a pointless question as no one has the information available (it’s usually contained in the planning documentation)’. He adds: ‘I’m not aware of any local authorities who actually answer that question because, essentially, it’s not accessible.’ He anticipates that this is an issue that will bubble along and become more relevant as more SuDS become implemented in new developments.
As for the CIL questions, he describes this issue as ‘a postcode lottery’ because many local authorities do not have CIL policies in place (in which case, the answers to the CIL questions are simply ‘no’ ). Councils are not obliged to have to have them, although Stephen Murray says that most will.
So, what is the experience of Chartered Legal Executives at the coalface? Chartered Legal Executive Matthew Roach, who is a specialist in residential development and social housing at Anthony Collins Solicitors, says that he has found the transition to the new forms to have, in general, been fine. He adds: ‘We were given plenty of advance notice from our search provider as well as other sources.’
However, he says: ‘I have experienced some extremely long lead-in times for obtaining search results (one authority quoted 50 working days!). However, I am unsure whether this has anything to do with the new forms; rather, it is more likely to do with funding and staffing issues within local authorities in general. It should be said that many authorities still provide local searches very quickly (typically 5–10 working days).’
From a practice point of view, Matthew Roach finds two key differences in the revised forms, in particular: ‘Firstly, the inclusion of the previously optional question in relation to public paths and byways (which I suspect was being asked on most occasions in any event, particularly with development land acquisitions) and, secondly, the inclusion of reference to CIL.’ However, he has not noticed any difference from a client perspective ‘because generally clients rely on their lawyers to interpret search results’.
Law Society Guidance on the new forms is available for local authorities and conveyancers.3 The guidance contains comprehensive assistance for councils responding to the enquiries, and help in interpreting those replies. The guidance is not mandatory, but conveyancers will find it invaluable as they familiarise themselves with the new forms of enquiry.
While there do not appear to be price rises resulting directly from the revised CON29 and CON29O, the new requirement to charge VAT on local authority searches means that inevitable cost increases are now imminent. After many delays, VAT at 20% will be applicable to local authority searches following HM Revenue and Custom’s (HMRC’s) decision that the production of CON29 responses is a commercial activity. The move effectively creates a level playing field with private search organisations that charge VAT on their prices.
HMRC’s implementation date for applying VAT to the cost of searches was 1 January 2017, with a long-stop date of 31 March 2017. This means that the VAT charge will not apply to local authorities which did not have the infrastructure in place to charge VAT from January. Instead, they have had time to prepare to do so, but until no later than 31 March.
As Stephen Murray observes: ‘It’s a very interesting time for the local search.’ The CON29 element is, he says, coming under some scrutiny at the moment from across the sector. The Conveyancing Association has recently published a white paper expressing concerns that it is not fit for purpose.4 Alternatives may need to be considered in the longer term; for instance, the creation of a new CON29 form with optional borrower questions, thus a form of enquiry that would be more relevant to lenders.
Conveyancers will be watching, with interest, to see if there are further proposals to revise the enquiries of local authorities once again. For now, they must remember to factor in the new VAT charge – and remember to tell their clients about it.
1 See Nicola Laver, ‘Conveyancing practice and procedure update: the new CON29 and CON29O forms explained’, (2016) July CILExJ, p22–23
2 Karen Perrow, ‘Search delays hold up South Hams property sales', 12 August 2016, Dartmouth Chronicle, available at: http://tinyurl.com/lkxmbx5
3 Law Society guidance notes and the updated CON 29 forms, available at: http://tinyurl.com/jbxjlxt
4 Modernising the home moving process: Conveyancing Association white paper, November 2016, available at: http://tinyurl.com/hdm56ae and see Beth Rudolf, ‘Proposals to modernise the home-moving process’, (2017) February CILExJ, pp8–10