Climate change in Australia has become a significant topic of concern and discussion in recent years. The country's unique geography and ecosystems make it particularly vulnerable to the effects of climate impacts. While the effects of climate change are often only considered from an environmental and societal perspective, it's also reshaping the legal landscape surrounding property transactions in Australia.

In New South Wales alone, many locations are significantly exposed to coastal erosion problems. According to the Groundsure ClimateIndex^TM analysis, an estimated 13,000 + NSW properties are at risk of coastal erosion. In Wamberal, on the New South Wales Central Coast, multi-million-dollar beachfront homes sit on a cliff which is eroding at a rate of over 1 metre per year. Despite various engineering options being considered in 2017, a planned retreat appears to be the only viable solution, as all other options impose a net economic cost on the community. However, the future of this destination remains uncertain. A lack of government funding means homeowners are facing the dilemma of protecting their properties or losing them due to rising sea levels and severe weather events. While potential buyers may be interested in purchasing property in this, or similar areas, the high-risk ratings that these properties reveal must be considered.

What is your duty of care when advising your client?

The implications of climate change are echoed across all facets of property transactions, affecting real estate agents, vendors, purchasers, and property lawyers alike. The challenges presented are expansive, ranging from evaluating potential value depreciation to navigating buyer hesitancy and the unpredictability of insurance costs. The far-reaching effects of these changes emphasise the need for legal adaptation. Within this context, property lawyers hold a heightened duty of care to their clients, especially when it comes to property purchases.

The Law Council of Australia has stated:

“In accordance with their professional obligations, individual lawyers will need to be alive to the unfolding legal implications of climate change and its consequences and ready to assist clients on climate change-related matters within their areas of skills and competence.”

How can you support your client?

As temperatures rise and extreme weather events become more frequent, property lawyers and their clients are encountering these new challenges and require more intuitive solutions. Explore the various ways in which climate change is impacting property transactions and how tools like the Groundsure ClimateIndex^TM Report can aid legal professionals in navigating these complexities.

1. Changing risk assessment: As temperatures continue to rise and sea levels surge, traditional risk assessments for property transactions are evolving. Lawyers are now tasked with evaluating the long-term viability of properties in the face of changing climate patterns. Properties located in flood-prone or bushfire-prone areas may carry heightened risks, affecting their value and marketability.

2. Disclosure requirements: The legal obligations of property sellers and agents are also evolving. With climate change impacts becoming more evident, there's a growing need for transparent and comprehensive disclosure of potential risks associated with a property. This includes risks related to flooding, erosion, and other weather-related hazards.

3. Financing and insurance challenges: Lenders and insurers are becoming more cautious about properties that could be vulnerable to climate-related risks. Property lawyers now need to work closely with clients to ensure that financing and insurance arrangements are in place, considering potential climate-related complications.

4. Due diligence and title concerns: Property transactions are inherently dependent on secure land titles. However, climate change impacts such as erosion or shifting coastlines could raise concerns about property boundaries and titles. Lawyers must now conduct thorough due diligence to ensure that property titles remain accurate despite changing physical conditions.

5. Leveraging technology and data: The legal industry is adapting by leveraging technology to assess climate risks more effectively. To assist property lawyers and their clients in making informed decisions, InfoTrack offers the Groundsure ClimateIndex^TM Report. This innovative tool provides comprehensive data on climate-related risks associated with New South Wales properties, empowering legal professionals to navigate the complexities of climate change impacts in property transactions. This data-driven approach empowers lawyers and clients to make informed decisions in a changing landscape. Learn more about how the Groundsure ClimateIndex^TM Report can enhance your due diligence.

The effects of climate change are undeniable, far-reaching, and likely to increase due to the current trajectory. As property lawyers navigate this evolving landscape, tools like the Groundsure ClimateIndex^TM Report provide information to ensure the best outcomes for clients. By staying informed and proactive, legal professionals can adapt to these challenges and contribute to a more informed property market in the face of climate change.