Japanese Knotweed – What you need to know when buying or selling property.

Background

Japanese Knotweed was introduced into Great Britain in the 19th century as an ornamental plant. It is now the most invasive plant in the UK. It is a perennial plant that spreads rapidly by its roots (rhizomes) and stems and is extremely difficult to eradicate from land. It can grow up to 10cm a day between the months of April and October. The roots can extend to a depth of three metres and up to seven metres laterally. If even a small piece of root or stem is left in the ground, it can re-infest the land. Its vigorous roots and top growth penetrate foundations, concrete hardstanding and walls, causing considerable damage. The costs of knotweed removal and treatment are substantial. The government has estimated the costs of eradicating it from all of the UK at £2.6 billion.

Japanese Knotweed affect on house sales

Japanese knotweed can adversely affect the value, marketability and insurability of land and buildings.  And is a real problem if one is buying or selling a house in the UK that maybe subject to Japanese Knotweed in its garden or yard.

Lenders view on the matter

There is no blanket policy from lenders which prevents them from lending on properties that have knotweed, although it is true that some lenders will not lend, but the majority will dependent on the severity of the issue. UK Finance (incorporating the Council of Mortgage Lenders (CML)) has stated that mortgage lenders will expect the presence of knotweed to be noted on a residential valuation report. Lenders determine their individual policies on this issue. If knotweed is present, it is usually one of a number of factors the lender will consider. The level of severity may be a factor. If a mortgage lender agrees to lend on an affected property, it will normally require evidence of treatment that will eradicate the plant as a condition of lending

Building Insurance

Buildings insurance policies generally do not cover damage and problems caused by knotweed.

Use of Specialists to eradicate

When work is done to eradicate knotweed, one should always use a specialist company that provides a guarantee of ongoing treatment cover if the knotweed regrows or the original work was faulty. This guarantee may be backed by insurance, and so can offer protection if the original company has ceased to trade, that way one has a better chance of meeting the demands of banks and building societies lending on properties

Neighbours’ Gardens

Given the ability of Japanese Knotweed to spread easily one should be aware that while it may or may not be in your garden or the garden of the property you are interested in buying but rather in a neighbouring garden its mere presence is as cause of concern and just treating your garden would not solve the problem if the neighbouring garden is also affected.

Disclosure to a Buyer

The common law principle of caveat emptor (buyer beware) means that (subject to some exceptions), where property is sold or let, the seller or landlord is not under a duty to disclose any information about the physical condition of the property. However usually enquiries are raised which affect s that basic principle.

In a residential context for example, Enquiry 7.8 of the Law Society property information form which is used on under the Law Society Protocol which most solicitors doing residential conveyancing have signed up to Protocol asks whether there is knotweed on the property and, if so, whether there is a management plan in place to control The answer options are "yes", "no" or "not known" (which may imply that the seller has at least made reasonable checks).

One problem with this wording is that it is not clear from this wording whether there is need to declare previous Japanese knotweed problems if the plant has been treated by appropriate excavation and there has been no re-growth within a certain period.

What advice can you expect of a Residential Surveyor

As stated above UK Finance (incorporating the Council of Mortgage Lenders (CML)) has stated that mortgage lenders will expect the presence of knotweed to be noted on a residential valuation report. Red Book guidance from the Royal Institution of Chartered Surveyors (RICS) requires the valuer to indicate the presence of "invasive vegetation".

In 2012, RICS published an information paper, Japanese Knotweed and residential property. The information paper sets out a standardised methodology for assessing the risks and quantifying the costs associated with knotweed on residential property when carrying out valuations and surveys.

The RICS information paper defines four risk categories, based on:

• Whether knotweed is observed on the property itself or neighbouring property.
• How far the knotweed is from buildings on the property (seven metres is the critical distance as far as many lenders are concerned how much damage knotweed has already caused.
• How much damage knotweed has already caused.

If you would like more information on any aspect of commercial property please do not hesitate to contact me David Leviten.