Model clause

Report on Title Climate Change Clauses

Marni's Clause

Where climate change risk searches are unavailable, standard climate change statements should be added to a report on title to make buyers aware of the future risks that may affect the property.

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Why use this?

Reports on title are used in the acquisition of all UK property from commercial to residential and freehold to leasehold.

Standard Reports on Title for the acquisition of property in the UK do not include statements relating to the future risks of climate change that may affect the property.

Given the wide acceptance of climate change science and the articulation of climate change risks by the Bank of England and others, this is something buyers should be aware of prior to purchase.

How it promotes a net zero future

The clauses will ensure climate change risks are brought into mainstream transactional awareness. The identification of risks will also mean there has to be a new focus on solutions such as how the property could be made more resilient to the effects of climate change. This should result in investment in buildings to make them more energy efficient.

Disclaimer - please read

The clauses on this website (and published in our Climate Contract Playbook) have been prepared in good faith on a pro bono basis and are free to download and use. The clauses have been drafted and edited by a variety of lawyers and, as such, the approaches to drafting may not conform to any particular drafting norms. We acknowledge this as a consequence of the collaborative drafting process.

The clauses on this website (and published in our Climate Contract Playbook) are provided on an ‘as is’ basis and without any representation or warranty as to accuracy or that the clauses will achieve the relevant climate goal or any other outcome.

This website (and the Climate Contract Playbook) does not comprise, constitute or provide personal, specific or individual recommendations or advice of any kind, and does not contain legal or financial advice. The clauses are precedents for legal professionals to use, amend and negotiate using their professional skill and judgement and at their own risk.

While care has been taken in the drafting of these clauses, neither The Chancery Lane Project nor any of its contributors owe a duty of care to any party in relation to their preparation and do not accept any liability for any errors or omissions, nor for any loss incurred by any person relying on or using these clauses or any other person. Users should use their own professional judgement in the application of these clauses to any particular circumstance or jurisdiction or seek independent legal advice.

At present, all the clauses are based on the laws of England and Wales. We encourage the conversion of these precedent clauses for use in other jurisdictions.

The clause

Additional provisions to add to a report on title:

Interpretation

1.1 The following terms are used in this report:

Climate Change: the long-term and material changes in global or regional weather patterns including, temperature, humidity, precipitation, or wind.

Scope of the Review and Limitation of Liability

3.1 [No searches are available to clarify the risks to the Property from Climate Change and] we have not sought advice from Climate Change scientists or consultants specialising in climate risk analysis. We have generally summarised the general risks to the Property from Climate Change based on the Bank of England risk analysis but have not taken any steps to verify these risks and express no opinion on the likelihood of their occurrence.

[Note: Property searches are likely to become increasingly available for climate risks to properties, at differing levels of granularity.]

Climate Change Risks

The Property could be subject to the following risks in the future as a result of the impacts of Climate Change and the transition to a net zero emissions economy. These risks could affect the future value as well as the ability to obtain future borrowing against the property and policies of insurance.

4.1 Physical Risks According to the Bank of England, Climate Change “means we may face more frequent or severe weather events like flooding, droughts and storms” and gradual onset changes. As such you should consider whether such events could interrupt your intended use of the Property. For example, it may be more likely that the risks identified in your Flood Risk Report will occur as a result of Climate Change. You may also like to discuss with your surveyor how the Property could be made more resilient to the effects of Climate Change.

4.2 Transition Risks The UK government policy has set a target to achieve net zero emissions by 2050. The Property has an Energy Performance Certificate Rating of [    ]. It may be that as a result of policy changes required to achieve net zero you will be required by law to invest in improving the energy efficiency of the Property such as using additional insulation, installing solar panels etc.

4.3 Future Liability Risk If you are buying the Property as an investor or business you should report the potential Physical and Transitional Risks to your investors, shareholders or funders so that you have adequately disclosed the Climate Change related financial risks to them.

Glossary references: Climate Change

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