ClimateIndex clause 3 - D, E and F ratings

Introduction

In July 2022 Groundsure instructed Stephen Tromans KC In The Matter Of Conveyancers Duty Of Care To Advise Clients About Climate Risk And How To Discharge This Duty. Stephen is the UK’s foremost environmental law practitioner. His advice is available to download here: https://bit.ly/3CY7Ynm

Section F of Stephen’s advice relates to the practical steps which property lawyers can take to discharge their duty to advise clients on climate risks. The advice provided is as follows:

• Given the existence of a duty to advise on climate risks, what practical steps should conveyancers take to discharge that duty?
• The first step seems to me to become familiar with what search services are available and then to advise the client on the need for such a report. Obviously then if the client does not wish to incur the cost, that is their decision, but the conveyancer should in my view state clearly the risks (both physical and transactional) in not doing so – and should record that advice in writing.
• Assuming a report is obtained, it is not enough simply to pass over the results to the client – these need to be explained and the risk put in context. For example for a coastal property it may be necessary to explain the risk that whilst coastal defences may now be in place and maintained by an authority, that will not necessarily continue to be the case in the medium or long term.
• If there are issues arising outside the conveyancer’s own professional expertise, such as valuation or insurance or flood risk, it may be necessary to recommend the client considers taking such professional advice. This would of course depend to a large extent on the size and nature of the transaction.
• It is very important in order for the conveyancer to protect their own position to ensure that all this advice is clearly recorded in writing. The Report on Title would seem the most obvious place to do this.
  
  

Point of information

The following clauses are provided for illustrative purposes. They are intended to help commercial and residential property lawyers to consider how the increasing use of climate searches may justify making some changes to their standard conveyancing enquiries, certificates and reports. Property lawyers may wish to develop their own clauses or to modify the illustrative clauses. Please note that Groundsure assumes no legal duty to any person who uses or otherwise relies upon any of the following clauses.

Certificate of Title for Lenders

The Property did not pass a climate search dated [insert date]. The search is attached.

The impact of climate change is likely to exacerbate the risks to this property. This is due to [insert risk(s) here].

Report on Title

TCLP's Marni's Clause (Amended)

1. Interpretation

The following terms are used in this report:

Climate Change means the long-term and material changes in global or regional weather patterns including, temperature, humidity, precipitation, or wind.

2. Scope of the Review and Limitation of Liability

A climate search is available for the Property to assess it for certain future physical impacts arising from Climate Change.

Please note that the climate searches do not currently cover all of the above climate risks. We have summarised the the findings of the climate search:

The Property did not pass a climate search dated [insert date]. The search is attached.

The property has [moderate (D) /moderate-high (E) /high (F)] risks due to [insert risk(s) here].

This means you may experience issues obtaining insurance and mortgage lending in the coming years.

We are not qualified to comment on the technical aspects of climate change risk. We recommend the following:

Insert the recommendations based on the identified risk(s) from the report.

Shorter clause for Report on Title

The Property did not pass the climate search dated [insert date]. The search is attached.

The property has significant risks due to [insert risk(s) here]. This means you may experience issues obtaining insurance and mortgage lending in the coming years.