Lenders in the UK are being urged to update their conveyancing guidance around climate risk, environmental analytics business Groundsure has stated.

Practitioner in environmental law in the UK, Stephen Tromans QC, described the attitude of lenders to climate change risks as “critical”.

According to Tromans’ latest legal climate risk advice issued to Groundsure, conveyancers acting for lenders owe a duty to pass on to them information which may affect their security. If the lender requires an assessment of climate change risk in the letter of instruction, this is a “contractual responsibility” for conveyancers.

Tromans also said 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.

The advice states a conveyancer’s duty depends on the “nature and sophistication” of the client and that it will be higher for residential clients than experienced commercial clients. Given climate risks are more likely to be apparent to a conveyancer than to a lay client, Tromans suggested, a conveyancer should therefore be aware of these risks and should as part of their retainer take steps to warn their clients and advise on steps to respond to the risk.

Groundsure CEO, Dan Montagnani, commented: “Stephen Tromans QC is recognised as the practitioner in environmental law in the UK and is known as the author of the leading texts on the subject. 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.”

Tromans’ guidance also suggested that the emergence of search tools — such as Groundsure’s ClimateIndex — means there is a clear practical step which conveyancers can take to advise their client in respect of climate risks.

He also recommended that conveyancers make use of commercial search tools given the conveyancer’s duty is to undertake searches for the client and communicate the results and their implications to clients.

“Some 30% of residential and 20% of commercial transactions already have ClimateIndex contained within the existing conveyancing searches at no extra cost,” added Montagnani. “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.”

Share Story: