Climate Change In Property Transactions
New guidance has recently been published by The Law Society, giving Solicitors and their teams further advice and guidance on how to handle climate risks in property transactions.
Souiful Alam, Director in the Commercial Property team at JCP Solicitors, explains what this guidance means for the property sector professionals.
The impact of climate change is a growing concern across industries and the property sector is no different. With increased climate risks making headlines, property professionals are being encouraged to more carefully consider the ways in which climate change could affect a property’s insurability, value and usability.
What Are The Risks?
When it comes to climate change’s impact on property, there are three main issues to consider when approaching a transaction.
Physical Risks: Is the area surrounding the property impacted by flooding, wildfires, coastal erosion, water/heat stress, ground stability/subsidence and related issues? If so, this should be communicated to the buyer and investigated prior to completion.
Transition Risks: As the Welsh and UK Government are aiming to mitigate and adapt to climate change, laws and regulations are constantly evolving. This includes legislation around energy efficiency standards and carbon emission reduction targets. Compliance with these can entail significant costs and impact property valuations, therefore, Solicitors and their teams should stay regularly updated.
Liability or Legal Risks: Property owners may face legal liabilities if they fail to manage climate-related risks adequately, and many homebuyers are being urged to order climate change surveys as risks rise.
How Can Solicitors Navigate These Changes?
As legal and property professionals managing residential and commercial property transactions, guidance from the Law Society recommends that Solicitors encourage clients to commission climate risks assessments if there are any concerns for the area in which they are hoping to buy, lease, develop or finance
Those guiding property transactions should also clarify responsibilities to determine whether the client has undertaken necessary climate risk evaluations, or whether they are expecting their Solicitor to do so on their behalf. Lastly, it is vital that Solicitors and other property sector professionals stay informed of evolving legislation and regulations.
By integrating these practices, Solicitors can better navigate the complexities of climate change in property transactions and ensure compliance.
For expert legal advice and guidance on property law, JCP Solicitors can help. Email souiful.alam@jcpsolicitors.co.uk or call 0333 209244.