Local Authority Charges for Property Searches

• The Government has this week published a further consultation on local authority charges for property searches. The report outlines the Government’s preferred approach to future charging arrangements and sets out the draft legal framework to implement them.
• The report focuses exclusively on amendments to the existing 1994 regulations on charging for land searches. It does not take forward the wider proposals set out in the January consultation ie charges for personal searches of the local land charges register. These will be the subject of separate consultation by the Ministry of Justice.

Overview

• The main body of the consultation document reiterates the Government’s commitment to implement the 2005 OFT recommendations for reform of the search market. In particular there are commitments to delivering the framework for open and fair competition, open access and a level playing field.
• The Government clearly sees cost as being intricately linked to access, and uses the consultation document to send some very clear messages to all parties. Local authorities are told bluntly that the introduction of a transparent framework for the recovering of ‘reasonable costs’ removes any justification for restricting access. For Personal Search Companies the message is uncompromising - cost recovery is the price to be paid for full and open access. Finally, other professionals are told that these proposals will remove any objection they may have to the quality and completeness of personal searches.

The Legal Framework

• The draft regulations set out a clear and transparent legal framework for LAs to charge for the provision of access to unrefined data. Nothing in the regulations imposes a duty on them to grant access to property records, but if they do grant access they are allowed to charge a fee to cover the costs of that.
• Local authorities will be able to charge for allowing an individual to inspect physical records, making a copy of relevant records or for electronic transmission of data. This applies to all records excluding LLCR and free statutory information. They may also charge an additional fee for compiling answers to specific enquiries about a property, for dealing with urgent requests or different fees for different levels of service.
• The cost must be no more than the cost to the local authority of granting access to property records – staff time, creation and maintenance of records and potentially any capital investment in electronic infrastructure. The consultation also states that the LA and private companies should pay the same unit cost for the same data set.
• The unit cost will be based on an estimate of the likely total costs to the LA in granting access divided by the estimated number of requests received in a year. At the start of the financial year, the LA must publish the estimates on which this calculation is based and subsequently in July the actual figures for income, costs and number of requests received in the preceding year. Over a 3 year period, income received must not exceed the costs of providing the service and any over/under estimate in any given year must be reflected in the unit charge for the following year.

Implications for Personal Search Companies

• Before introducing new legislation, officials are obliged to carry out a regulatory impact assessment to determine its likely effects. The impact assessment for these proposals makes clear that no other charging mechanism has been seriously considered.
• If all data is charged for, local authority revenue could rise by £20-22 million but they are likely to lose £9-11 million of duplicate search revenue. In contrast, Personal Search Companies will pay £20-22 million more for data and only realise savings of £3-4 million from the ending of the insurance requirements. If this cost is fully passed on to the consumer, then the true cost of a Personal Ssearch search could rise above the current average cost of £101 towards something closer to the average LA compiled search cost of £115.

To read the consultation document click here

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