Check out risks of contamination before making purchase
Local authorities are now under a duty to identify and inspect sites that pose a serious risk of being contaminated and can issue notices to developers to carry out costly remediation works.
In the absence of an agreement to carry out the remediation work the site will be regarded as “Special” and the power to enforce the cleanup operation falls to the Environment Agency.
There are essentially two classes of liable bodies – Class A is the person or body (usually the developer) who knowingly contaminate or fail to remediate the land and Class B is the person who owns or occupies the land. Class B extends to a mortgage lender who has taken possession of a property.
In all purchase transactions our firm’s policy is to obtain an Environmental Search on behalf of our buyer clients.
This search is available online from a number of search suppliers.
These searches gather historic land use data and analyse the same to produce either a Passed” or “Referred” result. If the later a “Further Action” or similar statement will be issued to the conveyancer which then reveals there is a potential land contamination issue.
In June 2001 the Law Society produced a Green Card to conveyancers detailing guidelines and due diligence to be followed in both residential and commercial property purchase and mortgage transactions.
In short conveyancers must: advise of any potential liabilities associated with Contaminated Land and to assess the risks; enquire of the statutory and regulatory bodies; obtain a site history investigation report from a professional company; obtain a land soil test report; advise on Home Environmental Insurance availability.
If the land has a history which may result in contamination the buyer must be made aware as to the effect this will have upon resale, value and the potential liability to contribute towards the costs of the remediation works.
A suitable example is a development constructed at Blanefield near Glasgow in the 1960’s when no formal provisions were in place to test the land and remediate any contamination prior to construction.
Land contamination has been found as a result of leakage from a print works demolished 100 years ago.
Residues of lead, arsenic and other noxious chemicals have been discovered in the soil following investigation by Stirling Council in 2012.
The land is now designated Contaminated and the house owners are liable for the substantial costs of remediation under the Class B provisions as the developer company no longer exist.
So insist that an environmental search is requested by your conveyancer and make sure they report to you in full.
John Robson is Residential Conveyancing Manager at Ford & Warren, Leeds.