The CML initiative – how does it affect geo-specialists?

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In order to prevent homes being sold and occupied before completion, the Council of Mortgage Lenders (CML) initiative was implemented in April 2003 and has wide ranging implications for anyone involved in property transactions involving brownfield sites, and in particular house builders. Before providing a mortgage on a property, funders now require confirmation by solicitors and licensed conveyors acting on behalf of purchasers, that a new property has been signed off or ‘finalled’ (see below) and has a full warranty in place. This is often an NHBC warranty or similar from another warranty provider.

Prior to April 2003, the standard approach to brownfield redevelopment was to remediate the site with development progressing behind the remediation works as sections of the site are completed. It is usual to carry out appropriate validation testing by a third party, typically a geo-environmental consultant, to demonstrate compliance with outstanding planning conditions relating to contamination. On completion of the whole site, the planning authority and its statutory consultees, including the Environment Agency, would then review the validation data and indicate their acceptance of the work as complying with the relevant planning conditions. In addition the consultant responsible for the validation process may also have been required to complete an NHBC Form of Validation, or similar, to enable the developer to obtain a warranty for the property. Therefore, on medium size and large developments, many of the properties would be completed and occupied before the site warranty was signed off. This will no longer be possible.

In order to prevent developments becoming unmortgageable, remediation designers need to take a staged approach to both remediation works and validation, so that sites can be completed in sections. Each section is then signed off individually on completion. However, this approach has to be agreed in advance with the Regulators so that the implications of phasing on both completed areas and on-going remediation works can be considered.

It is suggested that phasing is introduced as a concept in any remediation statements and mirrored in planning applications, to avoid any future confusion as to how the site is to be redeveloped and released for sale. This may have been implied previously, but must now be clearly identified in development and remediation proposals. This places an onus on developers to have well developed plans before planning submission, where possible, so that changes to proposed phasing are minimised, or to ensure that proposals are sufficiently flexible to incorporate future changes, without compromising previously ‘approved’ phasing and remediation methodologies.

Similarly, environmental consultants acting on behalf of developers should include reference to validation also being completed in phases. In this case, validation documents may be structured such that they can be issued in sections relating to each individual phase. For large projects the validation report may be a series of volumes or a ‘log book’ style document with several addenda.

By taking this approach, which in reality only represents a minor but potentially critical modification of previous protocols, the planning authority and statutory consulates will be accepting the premise of staged development and validation and should be well placed to be able to sign off planning conditions piecemeal. As a result, delays to ‘finalling’ and the all-important sale should be prevented.

Jo Strange Card Geotechnics Limited