Local authorities are under a duty to investigate for “contaminated land”. This is when a pollutant causes an unacceptable degree or risk of harm and there is an identifiable cause for the pollutant being in, on or under the land.
If contaminated land is found, the local authority will search for an appropriate person to serve a notice on to clean up the land. Those who cause or knowingly permit the contamination are usually the first to be notified but current owners or occupiers may inherit the liability. The local authority also has the power to carry out remedial work and recover costs in the event of failure to comply.
An environmental search will highlight risks of contamination. It will also show the presence of nearby landfill, risks of flooding or subsidence, if the property is in a coal mining area, the presence of radon gas and other useful information.
A mortgage lender will usually insist on the search providing a ‘positive result’ or it will not lend. Even if you are a cash purchaser, it is advisable for searches to be carried out to ensure you uncover any potential liability.
Once a search result is obtained, a solicitor can consider if further action is needed such as:
- raising enquires of the seller to get a clearer picture of the site history;
- obtaining a reduction in price;
- carving out contaminated areas from the purchase;
- undertaking a more extensive environmental search to identify potential remedial works; or
- obtaining an insurance policy to cover the potential cost to remedy the problem.
Sellers can remain liable, despite disposing of their interest, through causing or knowingly permitting the contamination. It may be possible to agree the extent of responsibility through contractual clauses or an indemnity against future contamination. This is especially relevant if the buyer intends to redevelop.
If you would like to discuss the risks surrounding contaminated land, please give us a call on 0116 289 7000.
Robert Flannagan, Trainee Solicitor