Jonny Davey at Geodesys looks at the quality of information provided in drainage and water searches and discusses how conveyancers can ensure the full picture for their clients
Avoiding risk for your law firm, your client and their lender
There’s currently an unprecedented focus on the conveyancing industry and the quality of the service provided to home buyers. The Law Society has recently rolled out the three new core values for the Conveyancing Quality Scheme (CQS), along with the new Core Practice Management Standards, and the various conveyancing bodies are working on initiatives to respond to the whitepaper on Modernising the Home Buying Process.
The importance of drainage and water information
Hidden underground, drainage and water issues may not be the highest priority for home buyers, but the quality of information provided can have a real impact on a property’s value, title and maintenance costs. Without getting the full picture on drainage and water connections and assets, the lender, the conveyancer and the home buyer can all be exposed to risk.
Home buyers that experience problems can find themselves dealing with major disruption and considerable financial outlay to put things right.
For example, assumptions can be made about the household connections. If a property isn’t connected, then it may be reliant on a cesspit or septic tank for its sewerage. Obviously not the ideal choice for many homeowners, there’s also a maintenance cost involved with both, and the risk of leaking and flooding. If there’s an environmental risk, the Local Authority has the power to force a homeowner to connect their property to the public sewerage system, so the new homeowner can have the double whammy of paying for both the connection and cleaning up the mess.
How this impacts conveyancers and lenders
A law firm’s Professional Indemnity (PI) insurance can generally be relied upon to cover the cost of any remedial work required (e.g. a new sewer connection). PI insurance, however, cannot cover the cost to a law firm of the time and effort required to deal with the claims and reputational damage that follow. The fact that the conveyancer went through the due diligence process is insignificant if the information and data relied upon is incorrect.
As lenders increasingly focus on property risk, having transparency on the drainage and water status of a property is a key component of the lending decision. The Lender’s Handbook requests that “necessary searches” are carried out and that any “adverse” entries are reported to the lender, however without the full information, it can be difficult for conveyancers to identify any adverse findings!
Using the appropriate searches
The CON29DW was introduced by the Law Society in 2002 to promote a consistent approach to property-specific drainage and water information. It uses water company data to provide answers to all 23 Law Society-copyrighted questions. Yet not all drainage and water searches on the market answer all of these questions. Information can be inferred from the proximity of pipes or answers may not be provided at all, with insurance being used to cover any risks.
The importance of a CON29DW
The CQS core values state that members “effectively manage risk” and “demonstrate best practice and excellence in client care”. The Drainage and Water Searches Network (DWSN) is a membership trade body responsible for compiling complete responses to the CON29DW. It works closely with the Law Society, The Property Ombudsman, UK Finance and other associations to raise standards for home buyers, conveyancers and lenders, and ensure the CON29DW continues to offer this best practice and excellence.
It’s your call, but if you’re using any drainage and water report other than the CON29DW…good luck!
Geodesys is an official sponsor of the Law Society Conveyancing Quality Scheme, and offers a full range of property searches (including CON29DW) and compliance services.
Osprey House, 1 Percy Road, Huntingdon, Cambridgeshire PE29 6SZ
Tel: 01480 326093
Mobile: 07802 857411
Email: jonathan.davey@ geodesys.com
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