In today’s dynamic world, the spectre of climate change looms large, casting a shadow over numerous industries, including conveyancing. Lenders and insurers have begun to acknowledge the potential future ramifications of climate change on property transactions, and the reasons behind this shift are abundantly clear.
The increase in both the frequency and intensity of storms continues to strain our infrastructure, causing extensive flooding. Simultaneously, episodes of extreme heat and prolonged drought have led to a significant surge in subsidence claims, with notable spikes in 2018 and 2022.
For many individuals, purchasing a property is the most significant and valuable financial transaction they’ll undertake in their lifetime. In an era of rapid climate transformation, property buyers are increasingly turning to solicitors for guidance in preserving the value of their investments.
The Law Society has recently issued guidance regarding the implications of climate change for solicitors. This guidance offers clear direction on the duty of care, the duty to warn, and the duty to disclose, underlining the importance of professional development and training to ensure solicitors possess expertise in this field. Change can be unsettling, but it also presents opportunities.
Solicitors who proactively integrate climate risk advice into their practices are positioning themselves for a future where climate change risks will continue to intensify.
Shaping the Future with Legal Technology
Solicitors can offer the most precise advice when they have access to the most relevant data, presented in a comprehensible manner. This is where legal technology comes to the forefront, making a substantial and invaluable contribution to this emerging realm of advice.
At PM Property Lawyers, we deliver essential insights by amalgamating public and proprietary data, empowering solicitors and their clients to make well-informed decisions with confidence. This encompasses critical information concerning physical property risks like contaminated land, enabling solicitors to educate and advise their clients throughout the conveyancing process.
By modelling future environmental hazards, legal technology unlocks the data solicitors need to help their clients comprehend how climate change could impact property values, financing, and insurance coverage.
Evaluating Climate Data: A Key Consideration
Solicitors frequently grapple with the question of how to evaluate the quality and applicability of climate data within their practices. What should they look for to underpin their advice?
Here are a few key considerations:
Assessment of Risks: The climate assessment employed should comprehensively address at least the three primary risks expected to exert the most significant influence on UK property as climate change unfolds: flooding, ground stability, and coastal erosion. While other factors may hold relevance, these three are the most likely to impact the future insurability or saleability of a property.
Consistency in Risk Presentation: A climate assessment should maintain consistency in its presentation of risks. This encompasses the use of emission scenarios, often referred to as RCPs (representative concentration pathways), to generate predictions. The time intervals over which these predictions are anticipated to materialise should also be applied consistently across the three key risk areas.
Wider Context: The tone and transparency of any climate risk assessment warrant close scrutiny. Ultimately, the impact of climate change hinges on global efforts to reduce emissions – or the lack thereof. While climate report projections provide significant value to the legal due diligence process, they are indicative rather than absolute. Solicitors should work in tandem with their clients to incorporate these projections into the broader context, making a balanced assessment of the diverse risks and opportunities associated with a property.
Meeting Client Needs: No two property transactions are identical, and solicitors must exercise judgment to understand their clients’ individual needs. This applies equally when evaluating climate-related property risks. Early client engagement to review climate search results and discuss potential implications is of paramount importance.
Obtaining Adequate Detail: Solicitors should ascertain whether the provider of the climate risk assessment is accessible for further analysis and data interpretation. This resource can prove invaluable in maintaining the conveyancing process’s momentum should detailed questions arise during the initial review.
A well-structured climate report serves as a crucial tool that solicitors should employ to enhance their understanding of climate risk. It empowers them to offer informed advice to their clients. By comprehending the risks and potential changes, solicitors and their clients can make decisions with confidence throughout the conveyancing process.
Helping You Whatever the Weather
At PM Property Lawyers, we remain steadfast in our commitment to equipping you with the resources and insights needed to navigate the evolving landscape of climate change and its implications for conveyancing.