Water water everywhere !!!

Throughout history, periodic flooding of land has occurred in some form or another. The Winter of 2013/2014 set a number of records including the wettest January in 250 years and the wettest Winter on record. Everyone will be aware of the flood events that occurred.

Property owners who are finally cleaning up after flooding and dealing with their insurance claims are being reminded that they will have to relive the experience when they come to sell.

Anyone buying or selling needs to be careful about investigations and responses when it comes to flooding. Although the general principle is “buyer beware” where a property owner tries to conceal the fact that their property has flooded in the past, when answering questions in the pre-contract stage, there may be a case for compensation if it is found that the answers were untrue or fraudulent.

Most property transactions use the Law Society’s pre-contract Property Information Form to collect information from the seller which nowadays includes specific questions about whether any part of the property has ever flooded. Where any flooding is reported the seller has to explain what caused it such as ground water or a river breaching its banks.

Sellers who have given false answers to pre-contract queries have found themselves facing the consequences. In a case that went to the High Court in 1983 Jones –v- Emerton-Court, the seller of a house in Devon said that there had never been any flooding to the property but when this was proved to be untrue, the Court awarded the buyer damages to cover a reduced value for the property as well as compensation for inconvenience.

Others involved along the purchase route may also have a responsibility to a buyer. Where a surveyor has been asked to undertake a full buildings survey, they could be potentially liable if they reasonably could have identified any potential for flooding at the property. Similarly the conveyancing process should include relevant searches and additional pre-Contract questions if an area is known to be subject to flooding and the buyer should be kept informed about the risk.

With one in six properties at risk of flooding and over half of those at risk of surface water flooding, (Environment Agency, June 2009) it is important for a buyer to know when they are acquiring a property if the risk exists and similarly for a building society or bank who is lending money on the security of the property, to have this information.

It has only been possible for the public, (and lenders) to access robust information on potential surface water risk since about 2011. The Environment Agency have some surface water data which they supply to local flood authorities but do not yet make available through their free online flood map. This contrasts with the information that they make available on river and coastal flood risk, and which is usually captured by the due diligence required by lenders. It is possible now for Conveyancers to access online flood risk reports which provide detailed information about the risk of flooding and the potential source of that flooding.

Conventionally home owners, businesses and lenders have turned a blind eye to all but the highest levels of flood risk and, unless there has been a recent episode of active flooding, they tend to assume that it will not happen again in their period of ownership and that if it did their home and contents insurance would put things right. These risks can no longer be ignored for a number of reasons including increased cost and availability of insurance, the availability of mortgages on properties at risk from flooding, planning policy, the increased risk of flooding due to climate change and heightened concern generally about flood risk, not to say the emotional upset the flooding of a property can cause.

In summary, anyone selling must be sure that they reveal all relevant information in their possession as to the flood risks for the property they are selling, and buyers should make sure that all necessary checks are carried out during the purchasing process.

Web site content note:
This is not legal advice; it is intended to provide information of general interest about current legal issues.