The Importance of Ordering a Planning Search on a Conveyancing Transaction

In June 2015 Bird and Bird were sued for approximately £2m after they were found liable of failing to advise their client of a successful planning application, which, it was deemed, would negatively affect the purchase.

Rebecca Chow, of Orientfield Holdings, had paid a £2.75m deposit on a £25m seven-bedroom property in St John’s Wood, London. In 2011, Chow discovered that planning permission for a six -storey Academy School for some 1,400 students, had been granted nearby to the property. She felt this would have an adverse effect on the property and subsequently pulled out of the purchase. The issue was that she had already paid the deposit. A settlement was agreed to split the deposit between the two parties, Orientfield and the vendor.

Orientfield proceeded to sue their Solicitors who had represented them (Bird and Bird) for not informing them of the development, which they felt would have had an adverse impact on the property and that the property’s risk profile may have been altered.

Bird and Bird had undertaken a search, and were aware of the existence of the planning permission, however, they hadn’t advised their client of the information stating nothing had been identified which would adversely affect the property.

Judge Pelling QC ruled that this was a breach of duty, and that “it is for the client to judge the impact of the material that may be relevant, not the solicitor. Whether the solicitor agrees with the client’s judgment, or with the grounds on which it is arrived at, is immaterial”.

It’s essential for conveyancers to make sure their clients have access to the most comprehensive information available in order to make an informed purchasing decision.

Groundsure searches are clear and concise, with expert consultants on hand to assist with any queries connected with the findings of the search report and what this could potentially mean for the client.

If you have any queries or would like to speak with one of our specialists, please contact us.