Environmental search hitch leaves first-time buyer in dark

I am a first-time buyer in the process of purchasing a semidetached house built in 1996 close to the Clifton area of York.

A problem has arisen in that the Environmental Search requested by my conveyance has returned an adverse result. I am informed that either further information relating to investigations carried out by the original builder or an indemnity policy is required at a premium of £500 to £600. The seller of the property is unwilling to either instruct his conveyancer to make inquiries, as this will increase in the fee charged, or to pay for the insurance policy premium.

I am advised my mortgage lender will not accept the position and that I must either pay for the investigations or the policy premium. The seller bought the property in 2008. Accordingly, I do not follow why the search result is now still a major problem and why I have to pay either extra legal fees or a policy premium to sort it out. Can you shed any light on this for me please?

The Law Society has, since 2002, recommended an Environmental Search as part of the required searches when acting for a buyer in the purchase of a property. So a search should have been carried out in 2008 when the current owner of the property purchased it. It follows the search result would have revealed a Further Action report. This report requires further information to be provided to the environmental surveyor. The information enables the surveyor to further consider the property to ascertain whether or not the land it is built on is designated contaminated land within the meaning of Part IIA of the Environmental Protection Act 1990.

As the house was built in 1996 the National House Building Council (NHBC) guarantee would not cover environmental issues. Houses registered between April 1, 1999 and October 31, 2002 covered by the NHBC scheme will probably contain insurance cover against specified costs to deal with any contamination. However, as from January 1, 2003 NHBC will only provide cover if they also deal with the building control aspect of the construction of the property.

This, I am afraid, does not help you as the property you are looking to buy was built in 1996 and, as such, the developer probably did not make any investigations into the possible contamination of the site. An approach to the developer, assuming they still exist, should be made to ascertain if there is any available land investigation and land remediation reports. If so a copy of these report should be provided to the environmental surveyor to reconsider the need for a “Passed” certificate.

Unfortunately, from a practical point of view, the developer may take some time to respond to such a request and may not, after all these years, have retained their records. This situation will have arisen in relation to many properties within the development sold since 2002 and, accordingly, similar previous requests have been addressed to the developers.

It is entirely reasonable to request the current seller’s solicitors to investigate if an Environmental Search was requested when the seller purchased in 2008 and what subsequent investigations were made. As this is essentially writing one letter, the seller’s conveyancer would not ordinarily increase their fee.

If it can be established the conveyancer who acted when the seller bought did not request an environmental search then they did not comply with Law Society recommendation. This being the case they are potentially negligent. In these circumstances it is reasonable to request they pay the indemnity policy premium.

However, I totally agree this is not an issue you should have to pay either legal or policy premium fees to resolve. The quick fix is for the seller to pay the policy premium.