Purchasers cutting corners when buying commercial property and using residential environmental and water reports only have liability cover of £5,000.
If anything should subsequently go wrong, the purchaser is massively under-insured - leaving them to foot a possible bill of £1.9 million.
Mike Richards, managing director of Richards Gray, advised: “We estimate that ten per cent of transactions do not have sufficient cover – and this is leaving the purchaser open to what could be a major financial loss. Quite simply, it is not a risk worth taking.
"Our commercial search pack is one of those products that has genuinely come about because the market wanted it. Solicitors who use our packs for residential sales were asking if we could put together something similar for commercial deals, because they realised how many transactions did not have sufficient liability cover."
Richards Gray's pack includes all the surveys needed for a commercial transaction, and most importantly it is covered by up to £2 million-worth of liability cover, as well as £8 million of professional indemnity cover and £2 million of Information Accuracy indemnity cover.”
GroundSure, who provide environmental risk management services for the UK property market, supply the environmental searches for the packs. Paul Livett, managing director, said: “We are delighted to be working with Richards Gray on this. There is a clear need in the market for this type of service and by combining a leading local authority search company with a leading environmental survey company the customer is getting a high-quality end product.
“The product should be especially relevant to commercial developers, because it is important that they realise that the land they are building on could be contaminated. If it is, the later the developer finds out, the more it is going to cost them – we would always recommend an environmental report be carried out at the earliest possible stage.”
