What are Closing Searches?
Typically, when a premises goes ‘Sale Agreed’ the selling and purchasing solicitors will generate a contract which commits the buyer to the purchase of the property (right or interest) as seen, yet subject to the contract’s agreed terms and conditions. Invariably the contract to purchase will include a deliberation on the outcomes of title investigations, in the form of closing searches.
Closing searches thus can be defined as ‘…a series of investigations made to (a) establish title, (b) flag impediments or burdens, (c) address undertakings to lending institutions, and (d) provide the instructing solicitor with insights as to whether they recommend or not to their client the purchase a property, right or interest in real estate’.
In short, the purchasing solicitor needs to establish clean title for their client and ultimately reconfirm the fundamental importance of the old adage that ‘the day you buy is the day you sell’.
All that being said, in Ireland there are no formal or standardised set of searches that are to be conducted at the pre-contract stage. However, to some degree the Law Society’s Standard General Conditions of Sale (2019) negates the need to do so, save if any of those default provisions therein have been removed or amended. As such, pre-contract enquiries invariably but not always become de facto post-contract enquiries at closing.
Notwithstanding the above, because these 2019 conditions do impute that the ‘purchaser is deemed to accept the title on offer and the planning history of the property’, some solicitors do still assert their right to conduct pre-contract title investigation queries typically in the form of planning searches, which we will address later on in this blog.
What search types are contained in a set of closing searches?
While there is relative uniformity in the set of closing searches requested by purchasing solicitors, there can still be an element of variety for some real estate purchases. This variation depends on the complexities of the individual property being sold, who is doing the buying and selling and how (cash or mortgage), the level of risk aversion on the part of the requesting solicitor and/ or the lending institutions (where undertakings prevail).
In truth a suite of closing searches usually will include (but are not confined to) searches against the following registers*:
|Search Type||Broad Function of Search|
|Judgments (Lis Pendens/ Real Estate)||To establish if there any current legal cases going through the High Courts that may affect ownership or title on the sale premises.|
|Judgments (Debt/ Money)||This search highlights any potential debts being parsed into a judgment mortgages or affidavits of judgment. Moreover, it assists the solicitor meet the obligations of an undertaking to protect the interest of lending institutions.|
|Bankruptcy (including Arrangements and EU Personal Insolvencies)||If a seller is bankrupt in Ireland or in the EU (and that bankruptcy is registered in Ireland), they no longer control the real asset and therefore cannot sell the premises/ right or interest.|
|Insolvency Service of Ireland Registers||While the Protective Certificate (PC), Debt Relief Notice (DRN), Debt Settlement Arrangement (DSA) register searches may be indicative of potential financial issues for buyers and/ or sellers, the Personal Insolvency Arrangement (PIA) registers typically has greater effects on property and may impact on a sale if a creditors’ arrangement exists.|
|PRA Land Registry Folios (Registered Title)||For registered title this search will identify the details of the property, details of ownership (including any cautions or inhibitions), and all burdens registered against the property.|
|Registry of Deeds (Unregistered Title)||As part of title investigation in a property/ right/ interest purchase, there is an onus on the purchasing solicitor/ conveyancer to establish for their client the ownership of the property/ right/ interest being transferred or re-assigned.|
For unregistered title, this may be accomplished by producing a ‘chain of title’ showing transfers of land up to and including the current owner.
|Company Search||Reports provide details of a company’s status, all Mortgages, debentures, forms of undertaking, and other charges registered against a company’s real assets; and sets out whether and when those charges have been satisfied or not.|
As well as including details of current directors and secretaries, the search result reports on all statutory information filed by Irish companies, i.e., annual returns, accounts, resignations, and appointments, etc.
|Business Name Search||Because the establishment of business names creates no legal entities, nor shareholders, directors or secretaries, no limitation on liability, and yet affords weakened legal responsibilities, it is imperative for the purchasing solicitor/ conveyancer to establish some fundamental information on Business Name ownership if one is involved in a sale.|
|Planning Searches||Given that the purchaser is ‘on notice’ for any matters appearing on the planning register, it is important that the purchasing solicitor/ conveyancer ensures that a planning search is conducted prior to contracts being signed.|
Accordingly, the objective of a planning search in title investigation is to provide the purchasing solicitor/ conveyancer with a concise planning history of the property/ right/ interest being purchased.
|Sheriff (Civil)||For the purchasing solicitor/ conveyancer a matching entry appearing in the sheriff (Civil) register can alert them to the potential parsing of a judgment into a judgment mortgage against the sale property, and the inconvenience of the premises possibly being saleable only under court supervision.|
|Sheriff (Revenue)||Matching entries appearing in the sheriff (Revenue) register can alert them to the potential parsing of a judgment into a judgment mortgage against the sale property.|
It could also be indicative of other potential impediments i.e., bankruptcy, company insolvency coming down the line for the seller, and the knock-on effects of same.
|Sheriff (Receiver of Fines)||If a Sheriff (Receiver of Fines) has being appointed against a property it is not dissimilar to a bankruptcy in that the sellers can no longer control (or deal in a sale, mortgage etc of) their real property assets for sale purposes, as their interest in the property would now be vested in the Sheriff (Receiver of Fines).|
|Proceedings Searches||The intention of a Proceeding search is to flag whether there any High Court actions (or referred actions from lesser courts) initiated that could potentially affect the ownership of a property, or impact on the boundaries/ right/ interests of a sale property.|
|Petition Searches||A petition search against the High Court records may flag whether a liquidator has, or is potentially about to be, appointed against a company or not. If so, then not dissimilar to the appointment of an assignee of bankruptcy, the powers of the directors may become vested elsewhere, i.e., with the liquidator.|
For greater and more in-depth detail, please click on the individual search types above to go to our ‘Ellis & Ellis explainer’ page.
Once the purchasing solicitor/ conveyancer has conducted closing searches as part of investigating title in a property/ right/ interest purchase, what happens next?
Typically, once the purchasing solicitor is satisfied with the closing searches (i.e., that title is clean and all other formalities are addressed), a Deed of Conveyance is drawn up for agreement by the seller’s solicitor.
Once approved, then the buyers solicitor will request payment of a balancing fee (excluding the already submitted deposit) or request the approved loan cheque from the mortgage provider if applicable.
When the outstanding monies are received by the seller’s solicitor, all documentation and keys to the premises are handed over to buyer’s solicitor.
The function of the searches up to this point should have ensured that the buyer is buying what they intended without any future problems arising, while the lending institute’s interest are duly protected.
Ultimately, in such matters it is the role of the law searching company to bridge the information divide between buyer and seller.
Use a trusted Law Search provider
Given the serious ramifications set out above of either not conducting a search at all, or worse, conducting an inadequate or erroneous set of closing searches; it is imperative that purchasing solicitors/ conveyancers use a trusted law search provider such as Ellis & Ellis.
With our blend of a quick and easy-to-use ordering platform at www.ellis.ie , over 130 years of professional know-how, and a quality after-sales experience, we provide clients with a superior searching service.
For added peace of mind Ellis & Ellis provide Professional Indemnity Cover of €10 million.
Why not join the 1000’s of users who trust Ellis & Ellis to deliver them a competitive edge?
Did you find the above information to be of interest? Why not check out one of our other Ellis & Ellis explainers for some related searches below; –
- Land Commission Searches
- Beneficial Ownership Searches
- Valuation office Search
- Register of Beneficial Ownership