In a timely step, the Law Society have recently updated their practice note on flood risks effective from 31 January 2020. The practice note aims to help property solicitors and conveyancers take steps to protect their clients from potential flooding hazards.
As the current scenes of flooded landscapes, most notably in Wales and the Midlands demonstrate, there is an increasing concern about flood risk for property buyers in England and Wales. It has been reported by the Environment Agency that approximately 5.2 million homes and businesses in the UK are at risk from flooding. Also, that 22,275 properties were protected by flood defences last year costing taxpayers around £600 million.
We advise all prospective home buyers to access information regarding the risk of flooding and to have preventive measures in place. Exploring various sources of information for insurance and searches prior to moving into a new home is an absolute necessity.
What conveyancers should be doing to check for flood risks?
We are not technically qualified to report on flood risks, however, we provide guidance and provide relevant information to help clients make decisions in respect of these matters.
We undertake the following steps to ensure that our clients are aware of potential flooding risks:
• conducting searches and obtaining reports from relevant government bodies;
• making enquiries of the sellers;
• advising buyers to instruct a surveyor to carry out a physical inspection; and
• advising buyers to establish the terms upon which building insurance (including flood risk cover) is available.
Flood Searches
The mandatory searches we carry out are the Local Authority Search and the Environmental Search which also comes in the form of an Avista Search. The Avista search contains flood data and if this does indicate a flood risk, we recommend that buyers order the more detailed Flood Risk Report.
The Flood Risk Report will tell buyers about the:
• level of risk there is that a property may be subject to flooding;
• risk ranges from minimal to very high;
• risks from surface water, groundwater, coastal and river flooding; and
• likelihood of a property obtaining insurance on normal terms.
Enquiries of the Seller
Any indication of flooding risk from the flood search will prompt us to make additional enquiries and we shall collate as much information as possible from the seller.
Physical inspection, Survey and Valuation
A general environmental search result may provide limited information about flood risk, whereas inspecting the property may also give an idea about potential flooding.
Lenders will have a mortgage valuation carried out and the valuation report and survey may contain useful information about potential flood risk. Although, if a basic valuation is requested, it will not reveal flood risks. A specialist survey, can be carried out to provide further information in relation to flood risk. Organisations like the Royal Institution of Chartered Surveyors (RICS) and the Chartered Institution of Water and Environment Management may be able to assist in providing professional advice on flood risk.
Buildings Insurance
There have been concerns for new build properties, especially those built since 2009, which may not be covered by the Flood Re Scheme. This is a scheme set up by the insurance sector along with the Government in which properties situated in high flood risk areas provide potential buyers with affordable insurance that covers flooding. Buyers should therefore check that flood cover is included as part of their buildings and contents insurance.
In certain leasehold properties tenants face a challenge in relation to flood risk if a landlord does insure but the flood becomes an uninsured risk, the tenant may be liable for repairs for any damage to the property as a result of flooding. We urge all buyers buying a leasehold property in flood risk areas to investigate the terms upon which building insurance is available through their landlord or management company for all risks but especially flood risk; this should be confirmed prior to exchanging contracts.
It is also vital to note that insurers may not offer insurance on properties that are at a high risk of flooding. They may demand high premiums with high excesses and impose other conditions. Organisations like The British Insurers Brokers Association and the Department for Environment, Food and Rural Affairs may assist in locating specialist brokers if potential buyers encounter difficulties in obtaining insurance cover.
For further information regarding flood risks when purchasing property, please contact Bill Dhariwal or Syed Hoque on 01489 864100 or by e-mail to bill.dhariwal@lawcomm.co.uk or syed.hoque@lawcomm.co.uk.
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