By Rob Stafford
Are you protecting your clients from risk as well as you could be?
Most conveyancers are fully aware of the risk the legacy of coal and mineral mining poses to homeowners in England and Wales. Examples of the worst-case scenario abound: the “St Albans sinkhole” which appeared on the same residential street in 2015 and 2016, the sinkhole on site at Liverpool docks in February 2017 and recent cases in Norwich, High Wycombe and Reading.
Add the subsidence threat posed by fracking into the equation and it is clear conveyancers need to be more diligent than ever in advising clients on subsidence risk, whether your clients are home buyers or businesses.
This is the part most conveyancers are good at, identifying that the client’s property is in a part of the country with potential risk and ordering a ground stability report (whether that be from the Coal Authority, Terrafirma or Cornwall Consultants).
So far so simple. However, the question that puzzles some of our clients is what to do next if the initial report comes back as having identified a risk?
Of course, it’s very important that you notify your client, but for them to make an informed, decision, it’s likely you’ll need to seek further information and the opinion of an expert subsidence consultant. How to go about doing this, and why should you bother?
I’m going to use Terrafirma’s escalation structure to explain. For two reasons: firstly, their reports interpret the risk posed by over 60 mining hazards across the UK, so you’ll be able to apply this process wherever you are. Secondly, because the process is incredibly simple.
So, picture the scene; Mrs J Jones has instructed your firm for her purchase of 10 Privet Drive, Saltburn by the Sea, an area notable for its history of ironstone mining. You’re aware of the area’s history and duly order a Terrasearch Assure (Terrafirma’s basic postcode-specific certificate).
The report returns with a “further action required” finding. We often see conveyancers relay the information to back their client at this point and leave it at that. This despite the certificate’s warning that it is a search alert and not to be used as evidence in a property transaction.
The response I usually receive to pointing this out is “all very well, but I now have to ask my client for further funds and it’s likely the site will only return a minor risk when I order an investigative report anyway, so why bother?”
Both are true. However, Terrfirma estimate that 1 in every 100 sites they survey requires manual risk assessment by their consultants. Good odds on the face of it, but with an estimated 25 million homes in the UK, there’s still a huge margin for error. Can you really afford to gamble with your client’s investment and the reputation of your firm?
Instead, ordering a comprehensive risk assessment (in this case a Terrasearch Assess) will quantify the risk for both lender and purchaser. If the risk is a minor one, then at least all parties are aware of it and your firm has fulfilled its obligations. If it demands further action, manual assessment or even a site visit, then your diligence in pursuing it further has possibly stopped your client from making a costly mistake or moving into an unsafe property.
The order process is usually a case of inputting an address and most providers will allow you to order via their online platform. For the sake of a 2-minute order process, you could give your client a vital insight into the safety of their property, and in doing so, protect your business from the threat of litigation. Not only that, but Terrafirma (and most established providers) will refund the money for the original certificate of risk. Softening the request for further funds from your client a little.
If this all sounds simple, it’s because it is. Protecting your clients from subsidence risk has never been so simple. Yet many firms gamble for the sake of a “quick win” in not having to ask clients for further funds. Can you afford to be one of them?
For more information on subsidence risk or Terrafirma products please speak to your Brighter Partner or head on over to Terrafirma.