Purchasing contaminated land.

• Author: Currie, Adrian

Imagine: you have found three acres of lightly treed suburban land -- the perfect place for your dream house. What you don't know is that nearby industries have used the area to dump their wastes for thirty years.

Imagine: you intend to buy a defunct service station to transform it into a restaurant. You don't realise that 50-year-old gas tanks are still buried deep beneath the property, where they have been leaking traces of petroleum.

What are you buying in each of these cases? Trouble

Environmental law and enforcement have become important considerations in buying and selling land. Heightened public support for environmental protection has led to legislation involving the strict enforcement of environmental offences through civil or even criminal action.

The Pitfalls in Buying Contaminated Land

A purchaser of land runs the risk of acquiring a costly contamination problem and environmental liability under current or new legislation. Even though the contamination was not caused by the purchaser, it may become his/her responsibility. The land may become burdened by stop orders and other regulatory controls, and require expensive reclamation by the purchaser before any other development the purchaser might wish to carry out.

Furthermore, the purchaser may be the target of adverse publicity and law suits for negligence, nuisance, or strict liability. A purchaser may be liable for damages caused by a non-natural or inherently dangerous use of land if another person has established that he/she has suffered injury. That person need not establish any negligence or lack of reasonable care to be successful in a strict liability claim. It's therefore prudent for individuals and companies involved in land transactions to keep environmental standards in mind when making a land purchase decision.

When purchasing land, the purchaser will require access to all information relevant to the property, the right to inspect the environmental status of the land, and the ability to walk away from the purchase agreement if an inspection of the land is unsatisfactory.

How to Protect a Purchaser - Identifying the Risks

The most meaningful way in which a purchaser can protect his/her investment in land is to be aware of all the possible risks related to environmental liability when contemplating the purchase. In addition, the purchaser should have knowledge of the possible methods available to manage those risks. Establishing the environmental status of the land...