By Alwyn Thomas,
commercial property specialist at award winning Harding Evans Solicitors.

We live and work in the shadow of the industrial revolution and in a “throw-away” society. Industrial pollutants and current waste management practices have rendered much of our land unsafe to develop and use without clean-up measures being undertaken. Buyers of land and property should be aware of the legal and financial consequences applicable to land which is already contaminated or of contaminating land which they already own.

1. What are the risks associated with contaminated land?

i. Civil liability for damage caused by migrating pollution. The House of Lords has decided that you will be liable if you bring onto your land any substance which may cause damage if it escapes. You will be liable even if you use state-of-the-art equipment, without proof of fault or negligence on your part.

ii. Criminal liability. The Environmental Protection Act 1990 imposes a duty of care on you to prevent the escape of waste from your control. Waste must be stored safely and securely.

iii. Statutory liability for clean-up costs. If you pollute land, or in certain circumstances merely own it, you may be required by the local authority to clean-up the site and costs could be considerable. In one case a developer purchased a site for residential development only to discover that it had at one time been used as a gas mantle factory and was mildly radioactive. The clean-up costs which he had to pay exceeded £11million.

iv. Where an offence is committed by a company under the Environmental Protection Act and a director, manager, secretary or similar officer either consented, connived or was negligent, he as well as the company is guilty of an offence.

All these risks may mean heavy financial liabilities on the owner or occupier of the land.

2. What can I do to reduce the risks?

. There is no public register of sites which may be contaminated, so there is a danger of buying, in ignorance, a contaminated site at a price which does not reflect the cost of necessary clean-up works. The following measure will reduce your risk:

i. A desk-top study. This involves making enquiries with various regulatory bodies e.g. Environmental Agency to see if pollution incidents have occurred on the site; making enquiries of the occupier and researching previous planning history and checking through the title deeds.

ii. Commission a detailed physical survey of potentially contaminated sites. The desk-top study should establish the likelihood of contamination being present in which case a physical survey should be considered. This will be very expensive but the risks involved are significant and the cost may therefore be justified.

iii. Obtain a contaminated land report from a specialist agency.

iv. Investigate the possibility of insurance cover being available.

v. Obtain an indemnity from the seller against any future clean-up costs.

It is clear to see that there are many issues to take account of and expert legal advice should be sought. In essence if you consider the risk too high, then withdraw from the transaction and buy something else instead!