Legal loophole ‘blighting economic development in rural Wales’

Martin Shipton

A property owner who wanted to create sustainable holiday accommodation in rural Wales has lost hundreds of thousands of pounds because of a bizarre loophole in environmental and conveyancing law.

Now Sarah Lindsey-Smith has found herself in a complex legal web, uncertain which public body is responsible for her plight.

She believes hundreds of other landowners are also affected negatively by the loophole, aims to take collective legal action in pursuit of compensation, and wants the loophole plugged.

Her difficulties began when she decided to use money set aside for her pension to buy a house and adjacent land eight miles inland from the Ceredigion coast. She intended to build some holiday units on her property in conformity with Welsh Government policy aimed at fostering sustainable tourism.

Special Area of Conservation

Ms Lindsey-Smith bought the property after her solicitor undertook the usual conveyancing checks. But what neither she nor her solicitor realised was that because of a legal quirk, the checks did not show that the land concerned fell within the catchment area of a “Special Area of Conservation” (SAC) that in effect ruled out a development of the kind she proposed to undertake.

She told Nation.Cymru: “I am not referring to the actual SACs but their designated catchment areas, which have apparently been defined for a number of years, even though enacting regulations associated with them only came into play at the very end of 2021 – in my case relating to phosphates.

“SAC catchment areas are not covered by current conveyancing law and there are no land charges against such areas. There is no process for notifying landowners that the legislation, the rules or guidance associated with managing these areas of special environmental interest apply to them and thus landowners have no means of knowing they are responsible for managing such environments. Despite that, so many restraints are in place about what can be done with such properties.

“There is also no means for prospective buyers to discover that the land they want to buy is covered by this type of conservation area. In my case I had a rule applied to my property searches that meant I was excluding any properties that fell within conservation areas and were affected by environmental issues both now and predicted through data maps for the future.

“When a search was carried out by my solicitor there was nothing to indicate that the details shared did not relate to all catchment areas / conservation areas, thus giving me the mistaken belief that I could purchase the property with confidence.”

Loophole

Ms Lindsey-Smith said the loophole would affect hundreds of property owners in rural Wales: “In my case, the land I have bought is six miles from the River Teifi, yet for some reason falls within the Teifi catchment area. “Such rules over such vast areas means there is bound to be an economic knock on to the people living in such areas.

“If you don’t know something exists, how can you determine that it affects you? This lack of communication to landowners makes it a complete farce to have such legislation and SACs in the first place. The first time that landowners are aware they are in such an area is when they have planning applications turned down. Potential buyers are left completely oblivious to such restraints and if like me they are so far from a protected river, they will not have even been aware to ask about such environmental impacts, with solicitor and search companies not being obliged to even raise the matter with buyers and land charge data not reflecting the existence of such conservation areas either.

“Yet these rules and restrictions can impact owners so much that it halts their business, stops them bringing family members into the area, leaves families struggling to find ways of accommodating elderly relatives and trapped in properties they cannot sell as they are no longer of the same market value.

“About half of Ceredigion is affected already. I was advised when I started my research that there are plans to use another catchment area for restrictions for environmental reasons in Ceredigion that could be the catchment area to the marine conservation area that covers Cardigan Bay. I gather that area is dictated by the position of tributaries to the rivers that flow into the Bay. Thus, near my property where Mynydd Bach peaks and then slopes down towards the sea and is dissected by the river Aeron and associated streams etc, the area will fall into that catchment area and associated environmental restriction.

“My neighbours are also oblivious to this catchment area rule and the potential set of rulings that will limit what they can do on their land. Surely this will affect the wellbeing of all that live in the area, as without development progress and the economy is thwarted and the living standards for those who live here are bound to be affected.”

Trauma

Ms Lindsey-Smith said: “I have found out about this loophole the hard way, have lost hundreds of thousands of pounds and have been left with a house and property worth nothing, with no business and no income as well as trauma and stress-related health issues.

“I have spent over two and a half years fighting legal matters and researching what has happened to me. Not only has my home insurance company responded after two years of their solicitors researching the matter to say I cannot pursue my case through them, but having raised it at both Westminster and Senedd level I find I am no further on and nothing has changed, meaning I am still out of pocket – something which will affect me for the rest of my life.

“These issues probably affect hundreds of landowners who may still be oblivious to the issues that will affect them. It will also affect property developers, schools, hospitals and other places where people gather.

Not least, I predict it will affect areas like Ceredigion at all levels of the economy.”

Legal advice

Ms Lindsey-Smith is now trying to contact other landowners in a similar predicament with a view to getting more specialist legal advice in what is an immensely complex area of law and hopefully bringing a class action against the authority or authorities responsible for the loophole.

Ben Lake, the Plaid Cymru MP for Ceredigion Preseli, has corresponded with ministers about the loophole after being contacted by Ms Lindsey-Smith.

He told Nation.Cymru: “It is clear that the law is currently failing to ensure that individuals are adequately informed of regulatory designations that might affect their property. Given that such designations can potentially severely restrict the ability of an owner to develop their property, the Welsh Government should ensure that they are included along with other charges and issues notified by conveyancing checks.

“Furthermore, properties impacted by such designations should be notified by the public bodies responsible for overseeing the regulations so that they are made aware of the potential impact.”