30th October 2018
The answer – no you don’t!
A diligent property professional will always recommend undertaking searches for each transaction, so the purchaser can paint an accurate picture of any hazards and restrictions that may affect their future home. Certain environmental risks such as contaminated land, radon and flood are well understood and established in general due diligence during the conveyancing process, however other environmental hazards, namely mining, natural ground perils and planning are not.
A contaminated land search, and often a flood search are both commonly undertaken as standard, regardless of location, property type, size, proposed use or client. There have been attempts to screen this data so searches are only required in areas deemed to be ‘at risk’, however due to poor datasets and interpretation, more often than not you have to spend large amounts of your clients money when the risk to their property could be non-existent, all so you can make sure that you, your client and the lender are covered by adequate insurance.
However, when we assess environmental and ground hazards properly, we know that not every property is in an area deemed to be ‘at risk’ – it’s time to stop capitalising on poor data and increase transparency and awareness around these hazards.
We are not saying there aren’t risks posed by the environment – in fact, quite the opposite! Flood events can have a devastating impact on property value, use, enjoyment and livelihoods and it is essential the potential for them to occur is assessed by experts. The same goes for the risks the ground pose and for emerging ‘emotional’ risks such as Fracking and planning.
But why do you need to purchase a report in every case? Especially, when you purchase a report and it comes back with not only a ‘pass’ but looking deeper, it actually doesn’t identify a single point of interest. On average, this happens 30% of the time, which means almost a third of your disbursements could be reduced by between £50 - £100!
There is a big difference between a search being returned with a ‘pass’ with a professional opinion that has identified risk(s) and mitigated against them using expert interpretation; and a search being returned as a ‘pass’ that has not identified a single risk within several hundred metres. If you have the former, the client can be safe in the knowledge that they are making a sound purchase and you have undertaken your due diligence justifiably, the latter just feels like daylight robbery.
So how can we change this? Is it possible? – Absolutely. We have come a long way since the early days of searches, technology has become exponentially more advanced, the ‘data’ race and smokes and mirrors around who has more data has been disrupted and data interrogation and analysis is now so powerful that Terrafirma can monitor the ground moving in ‘real time’. This level of data interrogation allows for positive disruption of where, why and how you undertake ground and environmental due diligence.
For contaminated land and flood, it is likely that significant investments will be made over the coming years into refining data so that a search isn’t necessary on every case. But, for one group of environmental issues, this science-fiction future already exists. Ground risks have already been modelled and assessed by Terrafirma to a level that we can now confidently state that; for over 30% of the country, there is no need to carry out any additional due diligence by ordering a The Assure Certificate - you need only obtain a certificate that can be stapled to your Report on Title for a small cost of £15 +VAT.
This certificate will include robust terms and conditions, including £10 million Professional Indemnity (per certificate) and a professional opinion that will state that there no risks have been identified that will impact upon the ongoing use of this property or site. It will have still looked at all the data, but importantly not just data, it will have interrogated the advanced risk models that Terrafirma have worked tirelessly on for all ground hazards. Complete peace of mind, complete protection against liability, for a fraction of the price.
The risks the ground poses are still an emerging risk in the conveyancing process, a group of environmental issues that haven’t had the limelight that flood, and contaminated land has over the past two decades, but that isn’t to say it isn’t an issue that doesn’t deserve our professional respect. Recent changes to legal guidance and best practice around mining and ground perils is testament to the potential liabilities, similar in almost every way to the physical, legal and financial liabilities posed by flooding.
Importantly though, like all the other well-known environmental issues, these varied and complex risks posed by the ground like subsidence, mine shafts, landslides and radon are not an issue everywhere. There are huge numbers of properties, particularly in urban centres, that are free from any risk at all – even in places like Cornwall and the depths of the mining towns in Nottingham and Yorkshire.
So, it is here we begin our mission to educate property professionals and the public alike that you do not need to always undertake an expensive environmental search or mining report, instead getting a humble certificate – appropriately named: Assure.
Assure represents the future of environmental risk assessment, where advanced modelling has been able to instantly analyse the potential hazards present and remove the requirement for any additional expense, delays or reports in over 30% of cases. There is a long way to go before the same can be offered for all environmental issues, but Assure is a positive step in the right direction.