Further Action – How conveyancers can turn perceived obstacles into added value

By Robin Wells, Head of Sales, Future Climate Info (FCI)

When a conveyancer receives a ‘further action’ from a client’s environmental report, the first thought might be disaster. But, while a further action doesn’t make a conveyancer’s job any easier, it is also not the damning verdict it is often perceived as. In fact, with a little preparation and some basic knowledge of the most common risks that warrant a further action – ground instability, contaminated land, flooding and infrastructural risks – conveyancers are able to anticipate, understand and mitigate these risks for their clients and create a smoother transaction for all.

This is particularly important as risk assessments are becoming ever more precise thanks to developing technology and the effects of climate change create an environment that may make further actions a lot more common. But a further action shouldn’t be seen as a burden, instead see it as an opportunity to offer your client crucial added value.

Environmental flags may need a second opinion

Our world is changing, and with it so is the land on and around our homes. Examples of changing effects include a change in rainfall patterns, resulting in increased flood risk and a greater risk of ground stability issues. Importantly, these environmental issues are affecting a greater number of homes outside of historical flood plains or traditional areas of instability. For example, flood risk further actions affect one in six transactions, as data by Future Climate Info shows.

But, the key thing to remember is that an environmental further action is just that – it’s asking you to take a closer look at a potential problem. It is important to realise that some risk assessments can’t be made purely by looking at data, and that an evaluation onsite might quell any concerns a further action may bring. A flood consultant can offer an onsite assessment, such as an identification of flood mechanisms, flow paths and local ground conditions that may impact flooding at the property.  In some cases this might show that a property is less affected by risk than the general area it is located in and can render further actions unnecessary. If this is the case, then FCI can re-issue the environmental report changing the Further Action to a Passed search.

The same can be said for ground instability issues. It may take a professional second look to ascertain whether this is a real problem or something that can be more easily mitigated. It’s an opportunity to engage a client, have a conversation and ultimately help give them better peace of mind.

Energy and infrastructure risks may all be perception

Receiving a ‘Pass with Advisory’ for energy or infrastructure is never going to be a cause for thrill with conveyancers, but as far as further action go, this one should come with a bit of relief. This is because energy and infrastructure risk assessments are often ‘perceived risks’ instead of ‘real risks’ and require conveyancers to understand what their clients would regard as a deal-breaker and what they would be happy to live with. These all throw up negatives and positives depending on the client and their outlook.

Further to this, not every assessed risk is an actual risk: For example, an electrical substation might be flagged as a risk, many clients would not have a problem with it. Others might be concerned for their health around one.

As the UK’s infrastructure projects to serve the UK’s growing population and install green technology grow, further actions around them will grow as well. The key to overcoming energy/infrastructure further actions is to talk to clients, assess their appetite for whatever risk the report may have identified and move on from there.

Contaminated land – know your local authority

One of the most unpleasant risks that can arise with a property is contaminated land: an old gas works, a long-gone petrol station, anything that might have left the ground a house is built on sullied could require an environmental clean-up.

The most important point when it comes to contaminated land is to learn to what extent local authorities are, and need to be, involved in the clear up process. In legal terms, the responsibility falls with the entity who contaminated the land, but often those businesses or individuals have since ceased to exist.

A local authority’s funding, enforcement resources and status of investigation at residential properties are often uncertain. Conveyancers should therefore ensure to both enquire after, and make use of available search options prior to, ordering an environmental report, to be prepared for a potential contamination further action.

Should uncertainties persist after dealing with local authorities, the best way forward is through insurance policies and government assistance through tax relief or allowances. It also always serves to be aware of when properties were built, as a date after planning laws were tightened is less likely to lead to a further action.

Preparation and conversation is key

Ultimately, receiving a further action is not the end of the road for a property transaction; just a slight detour, that in most cases will lead to the same result of the property being sold, despite potentially having a slight delay.

There are a whole host of different environmental risks that can lead to a further action being issued. However, just as there are multiple possibilities for risk, there are also multiple different types of clients, each with their own subjective view of just how significant that risk is. For a conveyancer, having clarity around exactly what their client wants and needs and the options available to them should ensure that the next steps are clear; whether that be additional insurance or a reassessment of responsibilities.

Most importantly however, is that every conversation is approached from a solutions focused perspective, one that results in an outcome that doesn’t leave the client to deal with unresolved or unknown risks.

The right knowledge, insight and pragmatism are crucial in ensuring the process of understanding the risks behind a further action is as successful as possible for all parties involved.

For further information or to sign up to one of FCI’s ‘Understanding Further Action’ roadshows, please click here.

Kindly shared by Future Climate Info