The Law Society has today published its long-awaited Practice Note on climate change and property transactions — a significant step in aligning legal practice with the evolving risks and responsibilities of climate-aware real estate work.
With climate risks (both physical and transitional) becoming increasingly relevant to due diligence, lease structuring, development viability, and funding, commercial property lawyers are under growing pressure to consider how these issues affect their advice. The new Practice Note provides long-needed guidance on how solicitors, should be identifying, addressing, and communicating climate-related risks in the context of real estate transactions.
Whether you advise on acquisitions, leases, development, or finance, this guidance sets clear expectations and offers practical tools to help navigate the complex and fast-evolving landscape of climate risk in property law.
Ten key takeaways for real estate lawyers
Here’s a summary of the Practice Note’s key recommendations:
- Define the scope of climate advice clearly
Clarify what you are (and aren’t) advising on — particularly in engagement letters and Reports on Title. This is vital when other professionals are involved or where the client has a defined risk appetite. - Incorporate climate risk into legal due diligence
Where risks are identified in searches, reports, or disclosures, we should address the legal implications — not just leave this to technical consultants. - Recommend climate risk searches where appropriate
Searches from Argyll, Groundsure, and Martello can highlight physical risks like flood or overheating. We should explain their role and limitations (without providing technical analysis). These may also evolve to cover transition risks linked to net zero — for example, strain on electricity infrastructure from EVs and heat pumps. - Advise on legal liabilities
Climate risks can give rise to legal issues such as MEES non-compliance, restrictive planning conditions, or loss of access. Our role is to advise on the legal consequences. - Direct clients to qualified experts
Use helplines and resources from search providers, and ensure clients are referred to appropriate environmental or climate risk consultants where needed. - Address EPC and MEES Risks
We should flag current EPC ratings, anticipate potential compliance issues, and understand how lease terms allocate these risks. - Tailor advice to client requirements
Understand the client’s purpose for the asset — development, occupation, investment — and reflect this in your advice. ESG and net zero strategies may also be relevant. - Review lease terms for climate resilience
Check whether the lease allows for energy improvements, contains suitable repair and insurance provisions, and addresses future sustainability works. - Consider lender and insurer expectations
Lenders are starting to require climate-related due diligence. We should also be alert to limitations or gaps in insurance coverage relating to known or emerging risks. - Record advice and instructions
Clearly document advice, search results, and client decisions — this helps manage liability and demonstrates that risks have been properly considered.
The Law Society’s guidance is a welcome move towards embedding climate awareness into mainstream legal practice and reflects a wider shift in how the property industry evaluates long-term asset viability. As climate change becomes a critical consideration for investors, developers, funders, and occupiers alike, property lawyers have an important role to play.
Join our upcoming webinar
To explore these changes in detail, we’re hosting a webinar on the new Law Society Practice Note, what it means for commercial real estate lawyers, and how to apply the recommendations in practice.
