BUYER BEWARE!

Personal liability for life threatening illnesses, fines and a hefty bill for remedial works are the potential risks if you purchase a property built on contaminated land.

Because of the ancient rule of “buyer beware”, when buying a property, the onus is on the buyer to raise relevant enquiries with the seller. The seller is not under an obligation to provide any information to the buyer, though once an enquiry is raised the seller has a duty to answer truthfully.  This duty applies even where the truthful answer is not visible on inspection and/or may cause a negative impact on the property. It is therefore crucial that the buyer’s solicitor raises all relevant searches and enquiries and that the buyer has a survey and inspection carried out before signing the contract.

What is contaminated land?

Nowhere are searches and a survey more important than in the case of contaminated land.

Under Part 2 of the Environmental Protection Act 1990 (EPA), contaminated land is defined as “any land which appears to the Local Authority […] to be in such a condition, by reason of substances in, on or under that land, that:

• significant harm is being caused or there is significant possibility of such harm being caused; or
• significant pollution of controlled waters is being caused or there is significant possibility of such pollution being caused”.

In summary, contaminated land is land that has polluting substances in, on or under the land which is either harmful or potentially harmful to our health or to the environment.

How do you know if a property has been built on contaminated land?

When you purchase a property, your solicitor should request searches (mandatory if you are getting a mortgage but optional if not).  The environmental search and local authority search could indicate that the land in question is contaminated. In particular, local authorities have a duty under Part 2 of the EPA to inspect land and to check for contamination.

Even these searches though are not conclusive and it is therefore essential that your solicitor raises appropriate enquiries with the seller to try and obtain any relevant information on things such as the land use, both current and historic. Any indication that the land was once used for industrial purposes will often increase the risk that the land could be contaminated.

The “polluter pays” principle

Once land has been identified as contaminated, it is then up to the “contaminator” to remedy this.  But who is the contaminator and who is responsible for the contamination?  This is a difficult question to answer and often the person responsible for the contamination cannot be located, usually because the contamination dates back many years.  It is at this point that local authorities may look at the buyer (amongst others) to undertake remedial works to decontaminate the land or foot the bill for the clean-up.

For further information please contact Olivia Pisapia on +4420 7288 4754 or one of our other residential real estate experts.