Conveyancing and contaminated land

The introduction of the Environmental Protection Act 1990 Part 2A legislation has resulted in an increased awareness amongst mortgage lenders regarding possible liabilities associated with contaminated land. Consequently, it has become increasingly common for solicitors and conveyancers to undertake a third party environmental search when arranging the transaction of land or property.

The aim of these searches is often to help identify whether a site or property already is, or may be in the future, statutorily legally determined as contaminated land by the council under Part 2A. These searches are generally based upon information obtained from historical Ordnance Survey maps or records held by the council and the Environment Agency.

Over a period of time a particular site may have been home to a variety of industries, each of which may have left substances in the ground that may be hazardous to human health and the environment. More recent activities on the site may also have been identified which could also have had a detrimental impact on the environment.

If a search of these historical maps shows the presence of past industrial activities on or in the vicinity of a site or property, it raises the possibility that a source of contamination may be present.

The consequences of the council legally determining the land or property you own or occupy as contaminated land, could mean that you might be liable for remediation or clean-up costs. There are however many liability exclusions for the owners and occupiers who are not responsible for the pollution. The concern from mortgage lenders in particular, is that if the mortgagee defaults on repayments and the lender repossess the property, they may be left liable for these costs.

Please note that local authorities have been charged with the responsibility for making decisions on what constitutes contaminated land, not the company or individual undertaking the environmental search.

Conclusions

The final decision to purchase a property rests with the potential buyer and mortgage lender who need to be satisfied with the level of risk associated with the transaction. Many properties or sites which had a former use which could have left contamination are still bought and sold.

A certificate issued by an environmental search company does not constitute a guarantee that the site or property in question would not meet the statutory definition of contaminated land. It is only a statement from the company undertaking the search that a review of the data examined in the search did not identify an obvious potential source of contamination at the land or property in question.

An environmental search that indicates the potential for contamination on site does not prove that there is a problem. It is merely an interpretation based upon maps and other paper records. The key information informing that decision will be good quality site investigation and laboratory analysis data that confirms the presence or absence of significant contamination.

It is important to remember that your local authority is the primary regulator of Part 2A and is the best source of information when looking to make decisions relating to Part 2A.

Until local authorities complete their inspections they will not be in a position to inform you as to whether your land or property could be determined as statutory contaminated land. The council can help you make decisions about sites and properties by giving you the available facts and explaining the legislative position. However, it should be remembered that legislation and guidance can change and in the future standards may tighten.

Please also note that the land quality team can not provide you with interpretation of the factual information discovered during environmental searches. It can not therefore provide you with a "pass" or a "fail" certificate.

Local authorities will make a charge for providing information so it is worth checking with the relevant department before deciding what information is actually required and what the cost will be.

This page was last updated on 16 September 2010