Contaminated Land

Introduction

The Contaminated Land Regime applies to all land, regardless of use. It can affect owners, occupiers, developers and lenders. Liability under the legislation is retrospective as well as prospective.

Local authorities must inspect and identify contaminated sites. They (or the Environment Agency in some cases) can require the removal or other remediation of contamination. Remediation can be costly, and may result in costs that exceed the value of the property. In addition, the possibility of contamination may make the land difficult (or even impossible) tosell, let or mortgage.

Who is liable?

Liability falls primarily on the company or other person who has caused or knowingly permitted the presence of a substance in, on or under land such that the land is posing significant harm or a significant risk of significant harm to human health, water, property and designated ecological sites (“Class A person”).

If the authority cannot identify a Class A person, liability falls on the current owner or occupier of the land (including lenders in possession) (“Class B person”).

There are complex exclusion provisions for transferring liability from one person to another. In simple terms, if a Class A person cannot be found by an enforcing authority after “reasonable enquiry”, the owner or occupier of the land (a Class B person) is liable.

Investigations

There are broadly two ways of establishing the possibility of contamination:

  • Enquiries of the current owner/tenant - We will make preliminary enquiries of the current owners/tenants relating to a variety of environmental issues. However, sellers are often reluctant to reply to such enquiries expecting you to rely on your own independent investigations.
  • Enquiries of statutory and regulatory bodies - We will obtain a site report from a commercial search company (often called an “environmental desktop report”). This will provide information from the statutory registers kept by the Environment Agency, local authorities, Natural England and various other sources. It will provide basic information that includes past and current land use, nearby landfills, pollution incidents, and whether the land has a nature conservation designation.

The cost of searches varies from £150 to £250 depending on the complexity of the report. We will undertake which of those available we consider appropriate to the property you are acquiring. In addition you should inspect your site carefully, alerting us to any activity or occurrence which may indicate that contamination is present (e.g. dead areas of vegetation, leaking containers or pools of chemicals).

It is important to note that these enquiries and searches will not provide a simple answer to the question “Is the land contaminated?” Even if the results give no indication of contamination, this does not guarantee the site is not contaminated. The reports from commercial search companies are compiled solely from paper records, with no inspection of the site itself.

Interpretation of the enquiries

We are not surveyors nor environmental consultants and are therefore unable to advise on whether the results of the initial searches and enquiries necessitate a full site investigation. However, those results will normally provide indications as to whether reference to environmental consultants is advisable. Such consultants will provide interpretation and guidance on the advisability of an in-depth desktop study and/or intrusive investigations. Once you have reviewed the environmental desktop report, please let us know if you are
commissioning further investigations or wish us to do so on your behalf.

Risks in particular transactions

Selling:

Selling property whether freehold or leasehold will not automatically absolve you from liability under the contaminated land regime. If you have caused contamination or if you have knowledge of contamination at your property and have not remediated it, you can, in most cases, transfer your remediation liabilities. If this situation applies to you, please let us know so we can discuss how to transfer those liabilities. We have specialist environmental lawyers who are able to advise and draft the necessary documents.

Buying:

We will be undertaking the enquiries and searches outlined in this note. If, as a result of those investigations and the advice of your surveyor or environmental consultant it seems there is a risk of contamination, then let us know as you may decide not to proceed at all or, if you do proceed, the terms on which you do so. Again, we have specialist legal experts who can advise you on the legal consequences of any issues arising from the technical information revealed by your investigations and provide guidance on the most appropriate way forward.

Leases:

You should not assume that just because you are a tenant, you have no liability for contamination. You will be liable for any contamination you cause or knowingly permit. In addition you may be liable as a Class B person; many leases place liability for remediating existing contamination on the tenant.

Conclusion

This briefing note is not intended as an exhaustive statement of the law and should only be used as a starting point for considering the contamination issues to be addressed when dealing with land.

This information is necessarily brief and is not intended to be an exhaustive statement of the law. It is essential that professional advice is sought before any decision is taken.

© Stevens & Bolton LLP August 2012

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