RICS Draft Guidance Note: Japanese knotweed and residential property, 1st edition

4 A new assessment framework

4.1 Rationale

As with the RICS information paper published in 2012, a key objective of this guidance note is to enable valuers to report to lenders objectively and consistently when Japanese knotweed is encountered in the course of a mortgage valuation inspection. The House of Commons Science and Technology Committee report called for 'a much more nuanced and evidence-based' approach. Meanwhile, the Defra report recommended that Japanese knotweed should be re-framed as a mitigatable environmental issue, rather than solely as a property or social issue, calling for guidance which would 'provide clarity for lenders and enhance coherence in lending policy.'

Again, as with the 2012 RICS information paper, however, the new assessment framework is not only for use when valuers report to lenders but it is also intended to support the decision-making process across the range of inspections and surveys carried out by RICS members. In addition to utilising the framework for assessment, RICS members carrying out inspections for reasons other than lending purposes should report to and advise their clients in accordance with their Terms and Conditions of Engagement and section 5.3 of this guidance note. Once established, this new framework can be flexibly utilised by stakeholders to suit their own business objectives.

The new assessment process enables the valuer or surveyor to carry out a structured assessment that leads to an objective categorisation of any given infestation. The assessment utilises a decision tree and the accompanying notes form an integral part of the assessment process. The notes clarify and define the terms used in the decision tree, assisting the valuer, surveyor, or other user to place the property being inspected in the appropriate Management Category.

Research has demonstrated, and it is now generally accepted, that Japanese knotweed poses little or no risk of structural damage to buildings with substantial foundations, such as dwellings. The so-called '7m rule' focused more on what has been demonstrated to be an overstated risk of Japanese knotweed to buildings rather than its sometimes-serious impact on amenity.

There is also a recognition that the most appropriate objective when Japanese knotweed is encountered is to ensure proper control rather than to automatically strive for eradication. In some circumstances, for example, when construction is proposed, proper control may involve physical removal but in many domestic situations effective control can be achieved by the managed application of herbicides. As part of normalising expectations in relation to Japanese knotweed the assessment directs the valuer or surveyor to outcomes related to the management of Japanese knotweed rather than emphasising risk to buildings.

Important note: The Management Category assessment framework is intended to provide guidance but should not be regarded as definitive. The valuer or surveyor must use their professional judgment when faced with circumstances that do not fit neatly into the framework and apply whichever Management Category they consider appropriate.

4.2 Assessing damage to structures

Substantial structures are rarely damaged by Japanese knotweed. When Japanese knotweed is found in the vicinity of damage to a structure the assessment process seeks to differentiate cases where damage has actually been caused by the growth, for example, where expansion of the rhizome/root mass has pushed over a garden wall, from those where growth is simply present in areas which are already in a poor or defective condition, irrespective of the Japanese knotweed.

Like most plants, Japanese knotweed will follow the line of least resistance as it develops, preferring to go around obstacles rather than through them. As it seeks light and water it may grow through pre-existing cracks in brickwork or concrete but its presence does not necessarily mean it has caused the cracking. The Fennell et al paper categorically dispels one oft-quoted Japanese knotweed myth by explaining that it is 'impossible for it to grow through intact concrete'.

An increasing appreciation of this important distinction between damage caused by Japanese knotweed and simply finding it present in areas of pre-existing damage should help to further reduce the perception of the risk it poses.

4.3 Assessing impact on amenity

By focusing on the distance of an infestation from buildings and boundaries the previous assessment process did not address one important problem sometimes caused by Japanese knotweed, that of its impact on amenity space, such as lawns, paths and driveways.

If amenity space is being affected by Japanese knotweed there may be an impact on value even when it is remote from buildings, especially on smaller plots. Lenders will want to ensure that appropriate measures are taken to mitigate any impact on amenity that will affect the value and saleability of a property. The assessment process acknowledges this wider impact of Japanese knotweed rather than simply focusing on buildings.

On the other hand, if Japanese knotweed is present within established areas of planting on larger plots, or on larger estates, it may not have any impact on use and enjoyment. In such circumstances, while individual homeowners may wish to seek advice about future management, for lending purposes there may be no justification for requiring any remedial action.

4.4 Assessing Japanese knotweed on adjoining land

The problems associated with Japanese knotweed growing on adjoining land were highlighted in the House of Commons' report. Valuers and surveyors must remain mindful of the difficulties that property owners may encounter when infestations are present on adjoining land.

The extent of any investigation in relation to adjoining land during a valuation or survey inspection will be determined by the type of inspection, by the particular constraints of the site itself (see section 3.6) and, importantly, by what is practical and reasonable in the circumstances. Within these limitations the assessment process specifies 3m beyond a property boundary as the distance within which Japanese knotweed would be reported to a lender when seen by a mortgage valuer. 3m has been agreed as the most appropriate distance to adopt, based on the latest research.

If the mortgage valuer sees Japanese knotweed further than 3m beyond the property boundary there is no automatic requirement to report it to the lender. In most circumstances it will be sufficient for the mortgage valuer to make a file note of the observation.

If a visible infestation located more than 3m from a boundary is particularly widespread, mature, and showing no signs of effective management by the adjoining owner, there may be broader concerns about the possibility of a serious impact on the future value and saleability of the subject property. Situations where this may typically arise are when the adjoining land is being rented from an absentee landlord, land with a non-residential use, land owned by a statutory authority or perhaps when the land is a derelict or unused site. In such exceptional circumstances the valuer should advise the lender of the situation by assessing the infestation at Management Category D: Report, in accordance with accompanying note 7.

When reporting to clients who are not lenders, typically for pre-purchase surveys, valuers and surveyors will usually have more flexibility in reporting to complement the Management Category assessment. Whether or not to report infestations seen beyond 3m from the boundary, and the detail of reporting, will be determined by the type of inspection and report as well as the nature of the infestation.

For the avoidance of doubt, it may be worth stressing that the change in the assessment process to a 3m distance beyond a boundary does not imply any greater inspection requirement than under the previous 7m distance.

4.5 Japanese knotweed Management Category assessment

4.6 Accompanying notes

NOTE 1: On-site or off-site?

  1. For assessment purposes any infestation along a boundary, within boundary hedging, or affecting boundary walls should be assessed as 'on-site'.
  2. If Japanese knotweed is seen both on-site and off-site the assessment should follow each strand separately. Report as appropriate in respect of the off-site component and then adopt the highest on-site category outcome for the overall assessment.
  3. Remediation of any infestation found off-site is unlikely to be the responsibility of, or to be within the control of, the owner or occupier of the subject property.

NOTE 2: Actually causing visible damage to a structure?

  1. Is Japanese knotweed causing visible damage to any significant structure (a living space, conservatory or any ancillary permanent structure such a garage, outbuilding or store) or associated structures such as paths, retaining walls, boundary walls and so on?
  2. As far as possible determine whether the Japanese knotweed is the direct cause of actual damage (e.g. pushing over a boundary wall) or simply located where damage was already present(e.g. due to neglect, disrepair or deterioration for reasons other than Japanese knotweed)?
  3. If Japanese knotweed is simply present in an area of pre-existing damage and not the direct cause of the damage the assessment decision response should be 'NO'.

NOTE 3: Likely to prevent use of or restrict access to amenity space?

  1. For the purposes of this guidance note amenity space is regarded primarily as open areas intended for recreation, leisure or convenience within the boundaries of a property. Typically, lawns, patios, paths, driveways, hard standings, etc., are included in this definition.
  2. Areas of garden planting may or may not be adversely affected by the presence of Japanese knotweed, depending on the size of the plot or the nature and character of the planting. If Japanese knotweed is present but not adversely affecting amenity space there may be no significant impact on the property.
  3. Considering the number and sizes of individual stands of Japanese knotweed (as described in section 3.8) may assist in reaching a decision on this point.
  4. At properties with larger plots or, for example, on country estates even relatively large areas of Japanese knotweed may be not regarded as unacceptable if the plant is not adversely affecting amenity space.
  5. The process of undertaking remediation work might itself adversely affect the usability of that amenity space for the duration of the remediation process, for example, while herbicidal treatment is carried out over a period of years or during the course of excavation and reinstatement works.

NOTE 4: Management Category A: Action

  1. When visible damage has been caused it is anticipated that most lenders will require, as a condition of a mortgage advance and subject to a retention, an inspection by a remediation specialist who is a member of a recognised trade body and the completion of any recommended works under a Japanese Knotweed Management Plan, with the benefit of an insurance-backed guarantee.
  2. The value of a property is likely to be affected when an infestation is assessed at this category. Valuers should take account of all relevant factors, including current market conditions, when considering the impact of an infestation on value at this category (see section 7).

NOTE 5: Management Category B: Action

  1. When Japanese knotweed is likely to prevent use of or restrict access to amenity space it is anticipated that most lenders will require, as a condition of a mortgage advance and subject to a retention, an inspection by a remediation specialist who is a member of a recognised trade body and the completion of any recommended works under a Japanese Knotweed Management Plan, with the benefit of an insurance-backed guarantee.
  2. The value of a property may well be affected when an infestation is assessed at this category. Valuers should take account of all relevant factors, including current market conditions, when considering the impact of an infestation on value at this category (see section 7).

 NOTE 6: Management Category C: Manage

  1. An assessment at this level indicates that an infestation is:
    • not causing damage to significant structures within a site and
    • not likely to prevent use of or restrict access to amenity space.

It can, therefore, be considered as having a low impact on the property.

  1. Lenders routinely accept the normal risks posed by large trees and other plants. In the same way there ought to be no requirement that borrowers should carry out remediation work as a condition of a mortgage advance at this category, so a mortgage retention ought not to be imposed.
  2. When reporting to clients other than lenders, the valuer or surveyor should recommend an inspection by a remediation specialist who is a member of a recognised trade body so the property owner can be advised about future management and control. This is particularly relevant if the growth is within 3m of a boundary (see section 5.3).
  3. There may be some impact on the value of a property when an infestation is at this level but this will usually be modest and more likely to be a reflection of the cost of any remediation rather than any direct effect on the use of the property itself. Valuers should take account of all relevant factors, including current market conditions, when considering the impact of an infestation on value at this category (see section 7).

 NOTE 7: Management Category D: Report

  1. An assessment at this level indicates that an infestation is not present within the subject site. The situation should be reported to the lender or client but remedial action on land beyond the subject property is not within the control of the property owner.
  2. Proximity to the boundary means that there is a possibility that there may be future spread from the off-site infestation onto the subject site. The likelihood of any possible spread will largely depend on the extent of the adjoining infestation. If an infestation on neighbouring land is limited there may be relatively little prospect of spread but if the adjoining infestation is extensive the probability of spread may be greater.
  3. In some circumstances it may be appropriate for advice to be sought from a remediation specialist about the merit of taking defensive measures against possible future encroachment.
  4. In most cases there is likely to be limited impact on value unless a severe adjoining infestation makes expensive defensive measures desirable (see section 7).
  5. In certain situations, there may possibly be implications for remediation and, rarely, perhaps even potential legal action. This could increase the impact on value, but only in exceptional circumstances would an infestation at this category be expected to be made the subject of a mortgage advance condition.
    • Irrespective of the extent of an adjoining infestation, and if discussion or negotiation are not successful, there is no practical way for a property owner to impose remedial measures on an adjoining owner without taking legal action of some sort. Consequently, it is not appropriate for lenders to require remediation of an infestation on adjoining land as a condition of a mortgage advance because it is effectively beyond the control of the mortgagee/property owner to impose this.
    • Even when an adjoining owner is willing to undertake remediation it may not be possible to ensure that work is carried out by an approved contractor or with the benefit of an insurance-backed guarantee (typical lender requirements). Additionally, remediation undertaken by statutory bodies or local authorities may be carried out by their own contractors, which are unlikely to meet this requirement in any event.

NOTE 8: Record presence and location in notes but no action required for lending purposes.

  1. No specific action is required when reporting for lending purposes if the visible infestation is off-site and more than 3m from the boundary, but the surveyor or valuer should make an appropriate record in the site notes.
  2. Recording the apparent number and sizes of individual stands of Japanese knotweed (as described in section 3.8) may assist with this process.
  3. Exceptionally, if there are concerns about infestation further than 3m from the boundary possibly affecting future value and saleability, assess as Management Category D: Report and follow note 7 (see section 4.4)
  4. Reporting or advice to clients for purposes other than lending will depend on the specific instructions relating to the inspection and, if appropriate, the survey level (see section 5.4).