The latest HSBC CML handbook change answers the question ‘Does the lender want to receive environmental or contaminated land reports?’
The complicated and confusing answer that HSBC writes is:
Japanese Knotweed – You will need to advise the Bank if you become aware that there may be Japanese Knotweed on or near the property and if not already done so we will instruct a valuer, who will follow the RICS guidelines to assess the risk where the weed has been identified on or near the property (generally within 7 metres) . Where Japanese Knotweed is identified we will only lend if there is a treatment schedule and a completion certificate that confirms the weed has been remediated with a guarantee in place for a minimum of 10 years. These documents need to be submitted to the Bank for consideration.
In an increasing trend of lenders using the CML handbook to apply more obligations on conveyancing panel lawyers, qualified solicitor (non-practising) and blogger Simon Seaton wrote:
‘I am particularly alarmed by the potential broad meaning of the phrase ‘if you become aware that there may be Japanese Knotweed ’ .This is very large hook on which to hang a potential claim in the future if it can be argued that you should have been aware of the problem. Is it not too large a leap to say that a lawyer is now expected to ask the buyer a specific question in this regard if the new protocol forms are not used?’
The worry now is that this trend of lenders either refusing mortgage applications for properties where Japanese knotweed is present or only accepting if a removal schedule is in place, has now moved to HSBC forcing the conveyancer to focus their attention on Japanese knotweed as an obligation of the CML Handbook and this could move other lenders to do the same.
To read Simon’s full blog post, go to: http://blog.aboutconveyancing.com/2014/03/latest-hsbc-cml-handbook-change-will.html