Contaminated Land and Environmental Liability

Land that has been used for industry, fuel storage or similar can be contaminated, and the liability for cleaning it up can be significant. For commercial property buyers, this is a due diligence essential.

The liability

Under the contaminated land regime in Part 2A of the Environmental Protection Act 1990, those responsible for contamination can be required to clean it up. The starting point is that the polluter pays, but where the original polluter cannot be found, liability can fall on the current owner or occupier of the land. So buying contaminated land can mean inheriting a clean-up liability.

Due diligence

Environmental risk is a core part of due diligence, especially for industrial sites, former petrol stations, and anywhere with a history of potentially contaminative use:

• Environmental searches flag past uses and known issues.
• A site investigation may be needed where risk is identified.
• Contract protections, indemnities and insurance can allocate the risk between buyer and seller.

Managing the risk

• Investigate before you buy, and price the risk in.
• Consider environmental insurance for identified risks.
• Take specialist advice where contamination is possible, particularly on industrial or previously developed land.

Take advice

Contaminated land liability is complex and potentially very expensive. Use environmental consultants and solicitors experienced in the area before committing to a site with any contamination risk.

Who is liable for contaminated land?

The polluter pays first, but where they cannot be found, liability can fall on the current owner or occupier, so buying contaminated land can mean inheriting a clean-up cost.

How do I manage contaminated land risk?

Investigate before you buy with environmental searches and, if needed, a site investigation, and consider indemnities or insurance.