Risk management

Checking title

Resist the temptation to cut corners when checking title.

You could end up facing a negligence claim.

Check for unusual restrictions on use

Edward had set his heart on buying a charming and beautifully located chalet at a quiet resort on the coast.

The property formed part of a holiday park, with on-site amenities including a bowling green, a swimming pool and a clubhouse.

Edward instructed Tim, his solicitor, to deal with the purchase of the chalet on a long lease and at first everything seemed to go smoothly.

Tim assumed that Edward intended to use the chalet for his holidays and let it out for the remainder of the year to supplement his income.But in fact Edward was planning to retire and hoped to indulge his passion for bowls by occupying the chalet permanently and letting out his existing home.If Tim had read the lease properly and had taken full instructions as to his client's intentions, he would have realised that the lease prohibited Edward from occupying the chalet for more than nine months of the year.Be on guard when dealing with converted buildings Another classic problem is the agricultural occupancy restriction.

Some properties can only be occupied by someone who is employed in farming or agriculture.

In one case, an owner decided to supplement his income by offering bed and breakfast and contacted the local authority to check that he would not be in breach of any regulations.

They responded by informing him that he shouldn't be living there at all, because the property was subject to an agricultural restriction.

He sued his solicitor.

Be particularly careful when buying a converted building - watch out for tell-tale names like The Old Smithy, The Oast House, Willow Farm.

A condition could have been imposed when permission was given to convert the property.

Watch out for bargain basements

Don't forget to check the planning conditions that relate to the physical description of a property.

Several claims have arisen from transactions involving refurbished basement flats.In one example, fire regulations specified that premises were to be used as a one-bedroom flat, with a bathroom, kitchen/diner and a large storeroom.By the time the flat came up for sale, the occupier had begun to use the storeroom as a second bedroom.The purchaser believed he was buying a two-bedroom flat, only to learn that he was not permitted to use the second room for anything other than storage.If his solicitor had bothered to check the conditions, and shown the client any plans attached, this would have been apparent.X For information on claims prevention, contact Richard Gerrard at St Paul International, tel: 020 7645 6800.