Money down the drain?

Money down the drain?

Wesley Timothy, underwriter at First Title Insurance Plc looks at the recent changes to water and drainage management, and asks whether it might be storing up problems for the future.  
Thank you to First Title and Mr Timothy for allowing us to republish this article.
The burden of responsibility for the upkeep and maintenance of domestic sewerage and drainage pipes rests with water companies.  But, says Wesley Timothy, that doesn’t mean that homeowners are off the hook.
By now conveyancers will have noticed the disclaimers adorning post October 2011[1] drainage searches. 
Pipes that serve two or more properties and lateral drains[2] are now the responsibility of the relevant water companies.
However, these bodies cannot guarantee the accuracy of their records, as they do not know where the newly adopted pipework is located; in most cases it is probable that the homeowner will be similarly in the dark as to the position.
Some undertakers estimate that it will take 10 years to update the sewer records using information provided by local authorities, developers and housing associations. However, this has happened before, in the 1930s. Due to public health concerns pipes that serve two or more properties constructed prior to the enactment of the Public Health Act 1936[3]became vested in the local authorities. The cost of maintaining these pipes was borne by the impoverished public, however the local authorities had very little knowledge as to the location of the pipes and sewers. Fast forward a few decades and public sewers became vested in the water companies as a result of privatisation in the 1980s; these companies had even less idea as to the location of the historic sewers. Even in the subsequent decades the only way to unearth them and carry out appropriate repairs and maintenance was when a problem rather nastily revealed itself.
The great news for homeowners is that they will no longer be directly responsible for the costs of maintenance and upkeep. They will no longer bear the hassle of entering neighbouring property (including the public highway) to carry out repairs, or getting into disputes over who should pay what where responsibility may previously have been unclear.
The water companies are now responsible; will they be swallowing the costs for this significant extra liability? No, they will calculate the increased financial burden and, lo and behold, this will be passed on to all of us in the form of higher water rates, once these have been signed off by OFWAT.
This is not the only double-edged sword created by the new arrangements. These sewers will now be protected by statutory easements. This will be positive for homeowners, protecting their pipework and ability to drain through third party land, particularly if there is any doubt as to the route of these.
However, consider the homeowner whose land contains a newly adopted sewer and is now burdened by a statutory easement three metres either side of the centre line of the apparatus – the purpose of which is to allow sufficient room to access the pipe to facilitate repairs. This places additional restrictions on how that owner makes use of their home. We know that it is necessary to apply for a build over agreement where development proposals will encroach on this easement, but properties extended prior to October 2011 over or near a private sewer will now be in breach of that statutory easement. As set out above, in most cases it is unlikely that the homeowner or prospective homeowner or even the water company will know this is the case until a leak floods Mrs Jones’ carefully manicured lawn. 
Some water companies suggest that they may take a relaxed stance where the works were carried out in accordance with building control consents and measures taken to protect the pipes. Will ticking these boxes always be straightforward? How often are we unsure whether extensions or conservatories have building regulations approval? 
Conveyancers will therefore need to undertake additional checks to clarify whether structures could be built over or near a newly adopted sewer. There are some options such as:
dig trial holes to determine the exact location of a sewer (and potentially destroy the patio or garden in the process);
apply to the water company for a retrospective build over agreement once all other necessary consents have been obtained.
But these sorts of solutions incur significant costs and cause substantial delays for what could well be nugatory enquiries.
A more robust (and less stressful) solution might be to consider specialist legal indemnities. First Title’s Home Owners’ Protection Policy (HOPP)â is a case in point. It covers risks that are difficult or impossible to unearth during the usual due diligence process, including those associated with sewers and drainage. This means prospective homeowners will be protected in cases where it emerges that a structure previously built over or near a formally private sewer is required to be removed by the water company, or where a now public sewer has to be diverted. 
It’s not the only solution but it is certainly one that conveyancers would do well to mention to their purchasing clients in an effort to stem the flow of risks.
Wesley Timothy LLB is an underwriter at First Title Insurance Plc

[1] As per Section 102 of the Water Industry Act 1991, as amended by the Water Industry (Schemes for Adoption of Private Sewers) Regulations 2011 (SI 2011/1566)

[2] Pipes serving one property that crosses third party land 

[3] Section 24 Public Health Act 1936  

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