The Contaminated Land Regime has been in existence since 1990 when the Environmental Protection Act 1990 came into force on 1 April 2000. The regime was put in place to identify contaminated land which causes an unacceptable level of risk. It is for a local authority to enforce, requiring those who have contaminated the land to remediate.
In order for land to be designated as contaminated, it has to appear to be in such a condition, due to hazardous substances being in, on, or under the land, that cause significant harm to human health or to the environment or there is a significant possibility of such harm being caused.
The Environment Protection Act 1990 also covers contamination of controlled waters, but we are only referring to the contamination of land in this article.
The objective of the regime is to ensure that any contamination is cleaned up. It does not impose criminal liability on a person who has contaminated land and does not seek to punish those persons.
It is for local authorities to identify contaminated land and to serve a remediation notice once it has identified who is responsible. Liability for remediating contaminated land first rests with those persons who have caused or knowingly permitted contaminative substances to be present on or under the land. If such persons cannot be found, liability will then rest with the current owner or occupier of the land.
In practice, very few remediation notices have been issued and the writer, in almost 20 years of practice, has never seen a positive response to whether a contaminated land notice applies. According to a report produced by the Environment Agency in April 2016*, 511 contaminated land sites had been identified with 493 of those sites remediated. These results should be treated with a 'pinch of salt' as not every local authority surveyed responded. Instead, local authorities will usually deal with any possible contamination through the planning process by including a condition to planning permission for the development of land requiring any contamination to be remediated. It is likely that more contaminated sites have been remediated under the planning process rather than under the contaminated land regime.
So, what should a buyer or a tenant look out for?
As part of the searches carried out on a purchase or lease, an environmental search will be obtained which will identify if the land is considered as contaminated land. This will be assessed on previous uses of the land and its surrounding area as well as the overall environment sensitivity by looking at the underlying geology.
Should the search identify a possible risk of contamination, depending on whether you are purchasing for your own use, for development purposes, or are leasing the property, consider the following:
- If you are buying for your own use – it will usually be agreed as part of the contract that any liability for remediation will be passed to the buyer provided that the seller has revealed any information that it may have on any possible contamination. This includes providing responses to the usual enquiries raised. In the event replies to enquiries and the environmental search raises possible contamination, extra steps may be required such as a Phase I Ground Investigation report to identify the extent of contamination and what remediation should be carried out. If contamination is present, a buyer may wish to renegotiate the purchase price due to the cost of remediating the land.
- If you are buying for development – in addition to the above, as part of the planning process, as well as a Phase I Ground Investigation report, a Phase II Ground Investigation report may also be required. These reports will also identify if any protective measures such as if a membrane or alternative foundations would be required. The local authority may also require a condition to be included in the permission that if contamination is identified during development, details of how to deal with such contamination will be submitted to the relevant planning authority for approval prior to development continuing.
- If you are entering into a lease - as a tenant, if you are taking on a full repairing and insuring lease, under the terms of the repairing clause, if the land on which your building sits is designated as contaminated land during the term of your lease, you will be responsible for remediating the land if the original polluter cannot be found. When negotiating your lease, always carve out of the repairing obligation, any liability for pre-existing contamination. However, please note that should you contaminate the land during your use of the building, this will be your responsibility to remediate.
- If you are obtaining a mortgage – the bank will ask the valuer to consider whether the risk of contamination affects the value of the land. A lender may require detailed investigations to be carried out, indemnity insurance, or a combination of these in order to lend on the land. If there are significant issues, a lender may refuse to lend unless remediation is undertaken.
*Dealing with contaminated land in England. A review of progress from April 2000 to December 2013 with Part 2A of the Environmental Protection Act 1990. April 2016.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.