In a recent poll conducted by leading property data and service provider TM Group, it was revealed that almost half of the conveyancers polled did not realise how serious a client’s flood risk could be.
Flooding is the biggest natural threat the UK faces and in England alone, more than 5 million properties are at risk, equivalent to nearly one in six.
However, despite most environmental property searches containing an indication of a property’s likely risk of flooding, many conveyancers are still unaware of the likelihood of their client’s property flooding.
This flood risk indicator, found in many environmental search results, typically references ‘1 in 200’, ‘1 in 100’ & ‘1 in 75’ chances of flooding but it emerges that many conveyancers do not fully understand this risk and its potential implications for home owners.
The poll asked conveyancers the question: “What does ‘1 in 75 year chance of flooding’ actually mean?” (See below).
52% of conveyancers correctly identified that the statement means that there is a ‘75/1’ chance of the property flooding.
However, a significant proportion – 39% – thought that it meant that ‘the property is likely to flood once every 75 years’.
A further 9% of those polled believed that the statement meant that ‘the property has actually flooded once in the last 75 years’.
The reality is that the statement means that if there were 75 properties on the same hypothetical plot of land, it is likely that one of them would flood each year.
This is a far bigger threat than if a given property was deemed likely to flood ‘once every 75 years’ and the distinction is an important one to make.
Not only can the financial consequences of flood be potentially disastrous for homeowners – typical repair costs range from £20-50k – but it can also prevent home owners from obtaining a mortgage or house insurance. In some cases, it can make the property more difficult to sell.
In its flood risk practice note, the Law Society states that “solicitors are not qualified to give advice on flood risk or interpret technical flood reports.”
However, although the Law Society does not expect conveyancers to give advice on flood risk, failing to accurately express the level of flood risk to a client can have negative implications on yours and your firm’s reputations. Not only that but it could expose your firm to litigation and the subsequent effect on your PII premiums.
Indeed, the practice note suggests that “you should also liaise with clients in relation to which, if any, flood searches or other investigations, may be appropriate”.
And so it is important to recognise the threat of flood and suggest further action if applicable.
If you and your firm would like to learn more about flood risk in property transactions, why not book a free in-house CPD session with TM Group?