Contaminated Land &
Water Working Group
Part IIA in Relation to Conveyance Searches
Third party environmental searches
The introduction of the Part IIA legislation has resulted in an
increased awareness amongst mortgage lenders of 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 to help identify whether a site or
property already is, or may in the future, be determined as Statutory
Contaminated Land by the Council under Part IIA.
These searches are generally based upon information obtained from
historical Ordnance Survey maps, Local Authorities 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 determining the land or property you
own or occupy as Statutory Contaminated Land, could mean that you might be
liable for remediation or clean-up costs. 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.
Will an environmental search tell me whether my land will be
determined as Statutory Contaminated Land?
No.
Simply identifying the possible presence of a source of contamination
will not be sufficient to inform a decision as to whether a site or
property is likely to be determined as Statutory Contaminated Land.
Local authorities have been given the responsibility for making
decisions on what constitutes contaminated land, not the company or
individual undertaking the environmental search.
What will an environmental search tell me?
An environmental search, sometimes referred to as a desk study or Phase
1 investigation, will provide an indication as to whether your site is a
potential source of contamination. In order to understand the
significance of this, it is necessary to consider the Part IIA legislation
in a little more detail.
A key element within the Part IIA regime for determining whether a site
poses a risk, is the pollutant linkage concept. Under the Part IIA regime,
without the clear identification of all three elements of the pollutant
linkage, land cannot be identified as Statutory Contaminated Land. The
three components required to establish a pollutant linkage are a source,
a pathway and a receptor:
- the source is the actual contamination which could be
located in, on or under the land
- the pathway which is the route by which the
contamination reaches the receptor; and
- the receptor which is defined as living organisms,
ecological systems or property which may be harmed.
Environmental searches generally focus on identifying the first part of
a pollutant linkage, a source of contamination.
It is important to note that these searches are based upon paper
records such as maps or registers and do not consider any physical site
data obtained from investigation of the site itself. Therefore, without
physical evidence of contamination obtained from sampling and analysis,
the presence of a source of contamination is only inferred. In general
this type of search would only indicate the likelihood as to whether more
detailed site investigation would be required. Detailed investigations
would include soil testing and analysis, together with a risk assessment.
The third party environmental search will either find,
- There is no evidence that a potential source of contamination
may be present at the site
- There is evidence that a potential source of contamination
may be present at the site
By eliminating the possibility of your site having previously been the
source of an industrial activity you are simply providing documentary
evidence that one element of the pollutant linkage could be missing.
What if I receive a certificate from a search company saying
contamination is not likely to be present?
If no contaminative past uses are identified, then the site or property
may be given certification by the company who undertook the search that
contamination is not likely to be present.
This certificate does not constitute a guarantee that the land does not
meet the statutory definition of contaminated land. Instead it is 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 in question.
What if a potential past contaminative use is identified?
Where a past potentially contaminative use is identified on or adjacent
to the site or property the company undertaking the search will not issue
a certificate.
The search company may offer recommendations on who to contact for
further information. On matters relating to Part IIA it is advisable to
contact the appropriate Local Authority.
If I am refused a certificate what should I do next?
The decision whether to proceed with or without third party
certification is ultimately an issue between yourself and the mortgage
lender. However, there are a variety of other sources of information to
help you make a decision.
1. You could conduct additional enquiries, including contacting the
appropriate local authority
Local authorities have begun to inspect land within their boundaries
with the aim of identifying all areas of statutorily Contaminated Land
before securing appropriate remediation. This is a lengthy and involved
process and councils will be at various stages of the work programme. The
appropriate local authority will be able to advise you as to whether the
site or property in question has been inspected as part of its
Contaminated Land Inspection Strategy. MAPAC Local Authorities have
adopted a strategic approach to this inspection. This ensures that where
land or properties have historically been the site of a potentially
contaminative industrial activity that they are inspected first.
Your local authority will generally have access to the same historical
map data that the search company will have used to make their decision. In
addition they may have more detailed maps along with supplementary map
data and detailed local knowledge.
2. You could make enquiries with the developer of the site or property
in question
The original builder or developer may have some information on any
contamination found and any remediation undertaken at the site. If you are
dealing with a transaction involving a recent development then a site
investigation report might be available. If the property was built after
April 1999 then the National House Builders Council (NHBC) may have
information on contamination, or may have provided a warranty against
contamination.
3. You could employ an environmental consultant to provide actual site
investigation data
In the absence of any site investigation reports, either you or the
seller may wish to arrange to undertake your own site investigation. This
will give more specific information about the site and can help indicate
if the site may be determined Statutory Contaminated Land. An
environmental consultant would normally provide such services. If you use
such a service, check that the environmental consultant can provide a
suitable level of indemnity and liability cover. It should be noted that
there could be significant costs involved in following this course of
action which may be inappropriate for a house purchase.
Unfortunately, local authority officers are unable to recommend the use
of specific consultants but can assist with more information about what
will be required.
4. You could try to insure against any potential risk
Environmental insurance is available which provides cover against the
Council determining the site or property as Statutory Contaminated Land.
This should cover you against any remedial costs. It should be noted that
insurers would require information on the site's history before providing
this insurance and may not be willing to underwrite land where significant
contamination is suspected.
Conclusions
The final decision to purchase a property rests with the potential
buyer and mortgage lender who both need to be satisfied with the level of
risk associated with the transaction.
A certificate issued by an environmental search company does not
constitute a guarantee that the site or property in question does 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 conclusively prove that there is a problem. It is merely
an interpretation based upon map and other paper records. The key
information informing that decision will be good quality site
investigation data that confirms either the presence and extent, or
absence of significant contamination.
It is important to remember that your local authority is the primary
regulator of Part IIA and is a good source of information when looking to
make decisions relating to Part IIA.
Until local authorities complete the inspection of their land as
detailed in their Contaminated Land Strategies, 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. Finally, it should be remembered that
legislation and guidance can change and in the future standards may
tighten.
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.
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