Flooded building

Who pays flooding costs 'could be a legal minefield'



Deciding whether a property developer is liable to pay for flood damage could cause a variety of problems, one development finance lender has warned.

Earlier this month, MPs called for developers to be held liable for flood costs if they failed to comply with planning requirements.

Russell Martin, managing director of Finance 4 Business, agreed that developers should be held responsible.

“Yes, I do agree they should be made accountable.

“The planning requirements are in place for a reason, especially when it comes to flood risk areas.

“You should also question why planning consent was passed in the first place, if it’s an area that is susceptible to flooding.”

Ashley Ilsen, head of lending at Regentsmead, added: “While they can be a hindrance, planning requirements are there for a reason, so I can understand if there are repercussions for developers that don’t comply, particularly if ignoring these requirements puts other people at risk.

“Ultimately they are there to protect the consumer, … the local area and stakeholders, and it’s essential that developers comply with these requirements.”

Who is to blame?

Andrew Scotting, head of loan origination at Zorin Finance, felt that if conditions were not adhered to, then ultimately the developer should be liable to pay damages, but he also felt local authorities should be responsible.

“Flood mitigation requirements are clearly defined within a planning consent obtained by a developer, so I find it hard to see how a developer could flout these requirements without the knowledge of the local authority.

“Additionally, the local authority has the ability to take enforcement action during the … development and stop works.

“Therefore, if it fails to take action, then it has to take some of the blame.”

'Legal minefield'

Russell also focused on the role of those who grant permission on an area that could be at risk of flooding.

“The planning officer would have viewed the construction, ensuring it complies, therefore making it very difficult to place this on the developers.

“Are purchasers of the property now legally responsible, rather than the developers? What about if they are buy-to-let? What is in the agreement? [It’s] very complex.”

Andrew highlighted the problems that could arise if MPs voted to bring in such legislation.

“The problem that may occur is deciding who is actually liable if future flooding has occurred due to works not been carried out by the developer.  

“The developer for the breach of the flood planning condition or the local authority for not ensuring that its conditions were satisfied in the first place?

“It could be a legal minefield both in time and cost.”

Russell thought it would be good for the development market, concluding: “If enforced, it would certainly make all developers think about full risk assessment.

“Tightening regulation would be good for the industry.

“But rules need to be clear, concise and involve all sizes of developers.”


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