New flood risk guidance will help solicitors protect clients

The Law Society of England and Wales has produced a practice note to help solicitors protect clients from flood risk, increasingly a concern for those owning or occupying property and those looking to buy property in flood prone areas.

The Environment Agency estimates that one in six homes in England are at risk from flooding with land increasingly at risk from different types of flooding.

The Law Society practice note provides solicitors with information to help clients understand their flood risk and identify searches, reports and investigations that may be needed to mitigate the risks of property transactions in flood prone areas.

Law Society chief executive Desmond Hudson said:

'Flooding has the potential to impact a huge swathe of property transactions. Some clients may perceive that flooding only occurs if you live near a river but the majority of damage caused by flood is from groundwater, surface water or sewer flooding, none of which necessarily relates to rivers or low lying ground.

'Solicitors play a crucial role in the conveyancing process to help clients understand flood risk and what steps they can take when buying property.'

Chair of the Law Society's Conveyancing and Land Law Committee Jonathan Smithers said the Law Society's practice note is a valuable resource for the profession and comes at a time when an estimated five million properties in England are at risk of flooding.

'It may not always be obvious that a property is at risk of flooding and this is where a solicitor can really help people to understand the risks and the investigations they can make so they can make a more informed decision when they are buying a property.

'Apart from the physically damaging impact of floods, if a property is at risk it may be difficult to obtain a mortgage, obtain suitable insurance cover or sell the property. Solicitors are there to help buyers, tenants and lenders in residential and commercial transactions to understand the options available to them.'

The practice note precedes a long awaited announcement from the government about its negotiations with the insurance industry on the Statement of Principles, which aims to ensure affordable insurance cover is available to properties, including those at highest risk.

If the government and the Association of British Insurers (ABI) do not negotiate new measures before 31 July 2013 (when the current Statement of Principles expires), or agree to extend the existing agreement, the insurance market is likely to change adversely for properties perceived to be at risk of flood events.

The ABI recently announced a one month extension of the Statement of Principles which was due to expire on 1 July 2013. If the government and the ABI do not negotiate new measures before 1 August 2013, or agree to further extend the existing agreement, the insurance market is likely to change adversely for properties perceived to be at risk of flood events.

'These adverse changes could mean higher insurance premiums and both buyers trying to obtain a mortgage and sellers in areas perceived to be at risk of flooding will face increased uncertainty. Solicitors will need to encourage buyers to investigate the insurance options for property they are looking to buy at a much earlier stage in the transaction. We hope that the ABI's extension of the negotiation period will mean an agreement on a more sustainable scheme can be reached.' Mr Smithers said.

Read the practice note on flood risk