Q&As

When is it necessary to carry out a pre-completion insolvency or bankruptcy search against a seller of property? If the seller is insolvent or bankrupt, what effect will that have on the contract which has been exchanged and on certification of good title to the buyer’s lender? If no search is carried out, does the buyer at arms-length get good title?

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Produced in partnership with Chris Bryden of 4 King’s Bench Walk
Published on LexisPSL on 15/03/2018

The following Property Q&A produced in partnership with Chris Bryden of 4 King’s Bench Walk provides comprehensive and up to date legal information covering:

  • When is it necessary to carry out a pre-completion insolvency or bankruptcy search against a seller of property? If the seller is insolvent or bankrupt, what effect will that have on the contract which has been exchanged and on certification of good title to the buyer’s lender? If no search is carried out, does the buyer at arms-length get good title?

When is it necessary to carry out a pre-completion insolvency or bankruptcy search against a seller of property? If the seller is insolvent or bankrupt, what effect will that have on the contract which has been exchanged and on certification of good title to the buyer’s lender? If no search is carried out, does the buyer at arms-length get good title?

A search for insolvency or bankruptcy (in the respective cases of a corporate and individual vendor) is good practice in all cases to determine whether that vendor has been made insolvent or bankrupt, or whether a petition has been presented against them. The reason for this is that a purported transfer of an asset such as a property will be voided by, respectively, sections 127 and 284 of the Insolvency Act 1986. These provisions provide protection to creditors for reasons of public policy that means any such sale will not take effect. This can result in the purchaser being placed in a difficult situation and a failure to carry out a search (both before

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