Law Society releases new flood risk practice note
The new flood risk guidance released by The Law Society of England and Wales is designed to provide solicitors with information that will help clients understand the flood risk that may be associated with owning or occupying property. It will inform clients of the investigations, searches and reports that may be necessary to minimise the risk of property transaction in areas that are a high flood risk.
Desmond Hudson, Chief Executive of The Law Society 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.
“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 government is currently undergoing negotiations with the insurance industry on the Statement of Principles. The government’s aim is to ensure insurance cover is affordable for even the properties most at risk of flooding.
Without successful negotiations to produce an agreement of new measures between the government and the Association of British Insurers (ABI) before the 31st July 2013, the insurance market is likely to drastically change for properties deemed to be at a high risk of flooding.
The recently revised date of 1st August 2013 for the Statement of Principles which was due to expire on the 1st July 2013 has given the ABI an extra month to negotiate terms with the government. However, if an agreement cannot be reached or a further extension granted, the insurance market is once again likely to drastically change for properties deemed to be at a high risk of flooding.