Are solicitors
and those working with property doing enough to protect homebuyers?
Most solicitors will obtain an
environmental search result and this will disclose whether the property to be
purchased is close to or within a flood plain. But however many of those
solicitors actually check to see whether the result includes areas where over
the past ten years land and property has suffered damage from pluvial or flash
flooding?
Flooding is
probably the most significant natural hazard we face in the UK and around 2.8
million people are at risk from pluvial, or rain related, flooding, which
represents around one- third of all flood risk in the UK. This figure could
increase by 1.2m by 2050 due to a combination of climate change and population
change. Population change has the potential to put three times more people at
risk than climate change.
Since 2000,
insurers have paid out £4.5 billion to customers whose homes or businesses have
been hit by flooding. The 2007 summer floods were responsible for £3 billion of
payments alone. It is estimated that the total value of assets under flood risk
is more than £200 billion.
Pluvial flooding
occurs when an extremely heavy downpour of rain saturates the urban drainage
system and the excess water cannot be absorbed. This can occur without warning
and in the worst cases, such as happened in Glasgow, York and Hull can cause
huge destruction.
So what does
this mean for the homeowner?
Increased
Premiums
To begin with
those in affected areas are likely to see increase in premiums and others
continue to remain at risk of being priced out of insurance in twelve months’
time.
Possible
non-availability of insurance
The ABI and the
Government are still locked in negotiations over whether the insurance industry
should continue to guarantee insurance for those who live in high-risk areas.
Without a new
approach, the ABI estimates that up to 200,000 property owners will struggle to
get affordable flood insurance when the current agreement with the Government
ends in June 2013.
Possible
non-availability of mortgages
The Council of
Mortgage Lenders warned that the “big and significant issue” surrounding the
potential lack of flood insurance would inevitably impact upon the housing
market. Significant increases in
premiums or excesses "could compromise the affordability of the
mortgages" and make it harder for the homeowner to find a mortgage.
Possibly left
with an ‘unsalable’ Property
Realistically if
a property has been flooded in the past it is unlikely that someone will be
interested in taking the property on particularly when there is a risk
insurance cover could be expensive or possibly unavailable. You also need to ask would you want to
be living in a property when there is a risk that your home could be affected
by flooding?
So this brings
me back to where I started, are lawyers doing enough to protect clients from
these possible consequences? As a
buyer what should you be looking to do to make sure your lawyer is carrying out
checks on flooding?
If you are
selling a property that has a flood history then this needs to be disclosed
since if you fail to do so and the buyer relies on the representation the
transaction could be set aside if the buyer later found out you had misled him.
If you are
buying then you should make sure your lawyer carries out an environmental
search and that the search result contain information on flash flooding. If the property is in
or close to a flood plain you should always invest in a flood report to obtain
greater detail of the flood risk.
Paying £40 for a report is a small price to pay for the comfort of the
information it will provide.
Check on Google
as to whether there have been any reports of flash flooding in the area.
Visit the Flood Agency website
though make sure any information you rely on includes the risk of flash floods.
Check with your
insurer in advance of exchanging contracts to make sure the post code of the
property will not lead to you having to pay more for your insurance or whether
there is a risk that the property may become uninsurable.
Inspect the
property carefully or better still get your surveyor to report to you on
whether there is evidence of past flood damage.
The message is
that we should all exercise more care when we look at purchasing property to
ensure the flood risk is given the priority is clearly warrants.
Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk
