Groundsure, UK environmental and climate data authority, said that it had received updated legal climate risk advice from Stephan Tromans QC, a leading practitioner in environmental law.
Tromans said that the attitude of lenders towards climate change risks was “critical”, and his advice states that conveyancers acting for lenders are duty-bound to share information which could impact the lender’s security.
Therefore, if lenders require an assessment of climate change risk in the letter of instruction, then this should be a “contractual responsibility for conveyancers”.
He added that solicitors and licensed conveyancers owe a duty to clients to “provide warning and advice as to risks which they are, or should be, aware of and which may adversely affect the property being purchased”.
Tromans said that a conveyancer’s duty depends on the “nature and sophistication of the client” and the duty would be higher for residential clients than experienced commercial clients.
He said that climate change risks were likely to be more apparent to a conveyancer, so they should be aware of these risks and as part of the retainer should take steps to warn client and provide advice on how to mitigate risks.
Failure to act on climate risks damage claims
Tromans pointed to search tools such as Groundsure’s Climate Index as a “clear practical step” conveyancers could use and also recommended commercial search tools.
He added that failure of conveyancers to do the above could mean they risked damage claims for professional negligence, increased insurance premiums and possible reputational damage.
Tromans noted that while conveyancers can exclude climate risk from the retainer, it would be an “unattractive course to take” as customer’s informed consent would be required, which could mean a full and clear explanation of climate risk.
Dan Montagnani, chief executive of Groundsure said: “This important intervention marks a watershed moment in ensuring clients are protected through their legal advisors on the potential forward impact of climate change on the property transaction.
“It’s time for lenders to update their conveyancing guidance. Lenders need to request that their panel conveyancers follow this advice. There is no question in my mind that this impacts their TCF compliance.”
He added that 30 per cent of residential and 20 per cent of commercial transaction have Climate Index within their existing conveyancing services at no extra cost.
Montagnani added: “Lenders should be benefiting from this via the report on title from the conveyancer and stipulating its requirement and importance at the point of instruction.”
