2 The consultation paper seeks to review how and by whom the fee for a personal search of the LLCR should be set, and considers the
implications of that choice for other local land charge (LLC) services (including the LLC1). The aim is to reform the fee setting structure for a personal search of the LLCR so that it functions fairly, transparently and effectively for LAs, personal search companies (PSCs) and other users of the LLCR. The preferred option is that the fee should be set locally by LAs on a cost recovery basis.
3 This proposal covers all LAs in England under the 1975 Act. The present fee for a personal search of the LLCR is £11. The personal search fee payable for LLC services is very small in the context of buying a property and is likely to remain so whether set centrally or by LAs. It is also relatively small in relation to fees for further property enquiries,
(traditionally raised in Form CON29 (but see also property enquiries in schedule 7 to the HIPs (No 2) Regulations)), where prices are generally between £100 and £200. The information obtainable by a personal search is also obtainable direct from the LA by an official search (Form LLC1). Prices for these searches vary but are generally in the range of £6 to £30.
Background
4 LLCs are matters of a public nature affecting a property that anyone interested in the property ought to be aware, examples include tree preservation orders, access to countryside agreements and planning obligations.
5 Under the 1975 Act each registering authority17(LA) must keep a readily
searchable register of LLCs for its area and an index in which entries can be readily traced. Methods of doing this (and the associated costs) are understood to vary considerably between authorities. LAs offer a number of LLC services. The most important of these are an official
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search of the LLCR in form LLC1 carried out by the LA and a personal search of the LLC Register. A personal search of the LLCR is carried out in accordance with section 14 of the LLC Act 1975 and LLC Rules 1977 (as amended). This allows any person to make to visit a LA and carry out their own search of the LLC Register on payment of the prescribed fee.
6 As enacted, the 1975 Act gave the Lord Chancellor, with the concurrence of HM Treasury, the power to prescribe fees for LLC services in England and Wales.
7 In 1997 the Efficiency Scrutiny Review of Consent Regimes
recommended the devolution to LAs of the Lord Chancellor’s power to set fees for LLCs. This was intended to reduce unnecessary bureaucracy for LAs. Furthermore, in December 2001 the Local Government White Paper Implementation Plan (Strong Local Leadership – Quality Public Services CM5237), announced that LLC fees should be set by LAs rather than by the Lord Chancellor to reflect the considerable variation in the methods of keeping the register and providing the other services for which fees are prescribed.
8 During a parliamentary debate on the Housing Bill 2004 (Standing Committee E Report, 10 February 2004, column 574) Keith Hill MP announced the Government’s intention to conduct a review of the fee payable for a personal search of the LLCR.
9 In 2005 the Office of Fair Trading (OFT) published ‘Property Searches – A Market Study’18which set out a number of recommendations. The
recommendations sought to ensure effective competition, access to registers and transparency in the property searches market. This followed the receipt by the OFT of a number of complaints from PSCs about restriction of access to property information and its effect on competition. The Government accepted these recommendations in full and reviewing the personal search fee is part of the overall response.
10 The 1975 Act was amended by the Constitutional Reform Act 2005 from 1 April 2007 to allow LAs the power to set fees for LLC services except the fee for a personal search of the LLCR. To accompany this devolution the Government issued Guidance for LAs on setting fees for LLC services in January 200719. This Guidance may need to be reviewed
following the outcome of these proposals as they may have implications on the existing fees.
18Government Response to Office of Fair Trading Property Searches Market Study December 2005, available at:
http://www.berr.gov.uk/files/file25861.pdf
19Guidance for Registering Authorities on Setting Fees for Local Land Charge Services in England – Cm 7026 –
11 The fee for a personal search of the LLCR in England is set by the Lord Chancellor on a cost recovery basis in accordance with HM Treasury’s Guide on Fees and Charges20. LAs are however permitted to take into
account any shortfall in income from the £11 fee for a personal search of the LLCR in calculating the total costs of providing LLC services.
12 The Lord Chancellor has retained the power to set personal search fee pending a separate review because these fees raised different issues to other LLC services. For example, some LAs consider that the fee should be significantly higher but many other registers and records held by the LA are available free of charge.
13 The fee setting powers for LLC services in Wales were transferred to the National Assembly for Wales on 31 December 2004.
14 The fee for a personal search of the LLCR is generally paid by the ultimate consumer (typically the buyer of a house, flat or other
property) as part of a fee for a property search report broadly equivalent to an official local search prepared by a LA. At present LAs have some flexibility as to the charges they may make for replies to enquiries of local authorities (such as CON 29) and for access to some registers and property information. This may enable LAs to recover all or part of any shortfall in income as against costs in relation to the fee for a personal search of the LLCR. A survey undertaken by OFT of LAs found that 83% said that the charge for personal searches of the LLCR by individuals or their agents does not cover the cost of providing the service. 69% of LAs also said that they cover the shortfall through revenues from charges for their CON29 forms, implying that consumers who buy LA compiled property searches may be cross subsidising those who buy PSC searches21. The financial attractiveness of property reports prepared
by PSCs may be affected by the comparative prices of local searches offered by a LA. Consequently, the fee for a personal search of the LLCR should not be considered in isolation and could be addressed by
introducing greater consistency in the ways that LAs charge for their unrefined and compiled property information and how the costs of these services are recovered.