Climate risk and conveyancing: take part in our consultation
We’ve been working with conveyancing and environmental experts and groups to explore how a new climate risk and conveyancing practice note could support you with your professional duties and best practice.
Your views will be invaluable in helping us to scope out a practice note that reflects real-world issues, supports best practices and empowers you to better advise and protect your clients.
You’ve told us that you need:
- greater clarity on how climate risk affects your conveyancing practice
- practical guidance that fits into your existing workflow without requiring significant changes or added complexity
That's why we want to hear from you about the challenges you face and what further support you need.
On this page:
Background
In April 2023, we published climate change guidance for solicitors and firms.
Part B details the duties of solicitors concerning the growing legal risks associated with climate change.
It also said we would provide sector-specific guidance where members wanted help on the expanding legal risks around climate change, elaborating on how these duties apply to their practice area.
Feedback from members showed a need for more clarity on how climate risk affects conveyancing.
In response, we started work on a climate risk and conveyancing practice note to complement our practice notes on flood risk and contaminated land.
We started by engaging with groups with an interest in conveyancing and climate change, including local law societies and conveyancing associations, to best understand how a practice note can help members.
We are now seeking feedback from the whole profession on the structure and issues covered in the practice note.
Draft practice note overview
This section gives an overview of what the draft practice note plans to cover.
By following these principles, solicitors can better navigate the complexities of climate risks in conveyancing transactions, ensuring that clients are well-informed and protected against potential future impacts.
1. Physical risks
Climate change can lead to more frequent and severe weather events, impacting property resilience, value and insurability.
2. Transition risks
These occur when moving towards the UK's net zero by 2050 goal.
These risks are the changes (including policy, legislative, regulatory and market) made by governments, industries and consumers (among others) to respond to climate change.
In a property context, those changes may have an adverse impact on anyone with an interest in property, which can:
- affect property values and/or transaction costs, or
- lead to financial penalties or reputational damage
3. Liability risks
Legal risks are an actual or potential adverse impact for individuals or businesses arising in consequence of the physical or transition risks referred to above.
Such liability or legal risks may be, for example:
- a new financial penalty
- a development not being able to be implemented as originally planned, or
- a physical event impacting on the ability to enforce legal rights or comply with legal obligations
4. Professional duties
General advice: while solicitors are not normally expected to give detailed advice on physical risks, they should:
- warn clients about potential legal liabilities arising from climate risks
- discuss whether climate risks are within the retainer's scope and document this in writing
- discuss climate risk with the client and explain that one way to gain further information on the physical risks posed to the property is to order a climate search, explaining their importance and limitations
- report climate search results and direct clients to specialists for detailed advice
Specific actions:
- lender requirements: understand and comply with lender requirements related to climate risk
- scope of retainer: clearly define whether climate risk is included in the retainer
- engagement letter: explain potential climate risks and offer obtaining a climate search if the client wishes to understand more about the physical risks
- climate search refusal: write to the client if they decide against a climate search
- reporting results: inform clients of any risks found in climate searches and suggest consulting specialists
- written advice: provide all advice in writing, such as in the report on title
- lender instructions: if also acting for a lender, seek instructions if climate searches reveal concerns
5. Advising on climate searches
Solicitors are not expected to advise upon the content of the climate search, but should disclose its contents as part of the solicitor's professional duty to warn clients of risks.
6. Reporting and specialist advice
Solicitors are advised to direct clients to relevant specialists for any questions from the clients related to the detail of the report.
7. Client intentions and risk appetite
Solicitors are to assess clients' intentions for the property and risk appetite in relation to climate risks. Considerations include:
- duration of ownership: longer intended ownership may necessitate more thorough climate risk assessments
- access to expertise: determine if clients have or need third-party climate risk expertise
- net zero targets: for commercial properties, check if clients have set net zero targets or transition plans
8. Insurance and adaptation matters
- Advise clients on insurance terms and availability concerning climate risks
- Recommend discussing risks with surveyors, insurance brokers or specialists
- Consider suggesting specialist surveys for more detailed climate risk assessments
9. Specific client scenarios
Occupational lettings:
- tenants may face lease limitations on adapting properties for climate risks
- consider lease length, potential impact on occupation and the ability to incorporate green lease provisions
Purchasing capital value leases or freehold properties:
- assess potential income loss due to tenant claims, physical damage, transition risks and challenges in obtaining insurance or financing
Acting for lenders:
- understand lender requirements and conduct appropriate climate risk assessments
- ensure compliance with the UK Finance Mortgage Lenders' Handbook for residential transactions
- for commercial transactions, gather relevant information to meet lender needs
10. Enquiries and surveys
- Pre-contract enquiries: raise enquiries with sellers, landlords or borrowers regarding climate risks
- Valuations and surveys:
- recommend clients obtain building survey reports
- advise clients to get their own detailed surveys and not rely solely on lender valuations
- Specialist surveys: suggest consulting organisations like RICS to assist in recommending suitably qualified professionals who can provide specialist climate risk surveys and recommendations on adaptation measures
11. Climate searches scope and applicability
- Purpose and scope: climate searches provide future risk information not covered by standard environmental or flood searches, such as physical and transition risks
- Market variability: searches vary in cost, quality and comprehensiveness, as standards are still developing
- Selection considerations: factors include reliability, professional indemnity insurance, data relevance and clarity of advice
- Public data sources: data from agencies like the Environment Agency and Met Office may not be user-friendly or property-specific
How to take part
To take part in the consultation, complete the online form below by Thursday 31 October.
Your response will still be considered if you do not answer all the questions.
I want to know more
Climate change affects your clients, your practice and your professional duties as a solicitor.
Use our guidance and resources to understand the wide-ranging effects of climate change, as well as its potential impact on your organisation and the legal advice you provide.