Commonsense approach to contaminated land

New requirements in the Council of Mortgage Lenders Handbook mean it is no longer possible for solicitors to ignore the issue of contaminated land

The Journal, April 2003, page 30

Some time ago the Law Society of England & Wales issued a “Warning Card” on contaminated land. This followed the bringing into force of Part II of the Environmental Protection Act 1990, as amended by the Environment Act 1995.  These provisions have been in force in Scotland since 14 July 2000 and the Council of the Law Society of Scotland have now decided to issue a similar leaflet on contaminated land.  This leaflet can be found in this month’s Journal, is reproduced on page 32 of this month’s Journal and is also available on www.lawscot.org.uk.

Many proprietors and their solicitors are already aware that there are liabilities attaching to contaminated land because contaminated land legislation has been considered by the legislature since 1990, albeit that the legislation was not brought into force until 2000. As pointed out by Kenneth Ross in his article, Defining Contaminated Land (JLSS August 2000, volume 45, page 36) there was considerable difficulty in bringing this to the stage of implementation. As a result, many solicitors believed that the issue could be ignored. This however is not the case and the matter has now been further highlighted by the introduction of new requirements in paragraph 5.2.6 of the Council of Mortgage Lenders’ Handbook. For all new instructions from 1 January 2003, a solicitor should ensure that the property enquiry certificate includes a series of questions relating to contaminated land. The Second Edition of the Handbook is now only available on the Internet at www.cml.org.uk, and the new requirements laid down in the Handbook are as follows:

5.2.6    You must ensure that the property enquiry certificate answers the following questions relating to contaminated land.  You should advise us only if any matters are revealed by the answers in the same way as you would advise the borrower:

5.2.6.1    Please list any entries relating to the property in the Register maintained under Section 78R(1) of the Environmental Protection Act 1990.

5.2.6.2    Has the Council served or resolved to serve any notice relating to the property under Section 78B(3)?

5.2.6.3    Has the Council consulted, or resolved to consult, with the owner or occupier of the property under Section 78G(3) in relation to anything to be done on the property as a result of adjoining or adjacent land being contaminated?

5.2.6.4    Has any entry been made in the Register, or any notice served or resolved to be served, under Section 78B(3) in relation to any adjoining or adjacent land which     has been identified as contaminated because it is in such a condition that harm or pollution of controlled waters might be caused on the property?

The Society’s Conveyancing Committee is aware of the difficulties in obtaining this information because of the different stages which the councils have reached in the compilation of their contaminated land registers and a lack of uniformity in the way that they respond to the queries. This has to be balanced against the CML’s firm belief that both lender and borrower clients should be made aware of any information held by local authorities on contamination, based on the overall risks involved. In view of this the Conveyancing Committee asked the CML to put a moratorium on the introduction of the questions but they have not agreed to this request. Nevertheless, the CML accepts that solicitors cannot be expected to provide more information about possibly contaminated land than is disclosed in property enquiry certificates.

Practitioners need to be aware that:

• Liabilities attach to those who cause or knowingly permit contamination as pointed out by Kenneth Ross in his aforementioned article.
• If the causer or knowing permitter of the contamination cannot be identified liability attaches to the owner/occupier of the land.
• This is the home ground of the conveyancing and property lawyer. It will be for the property lawyer to know when his/her client is the owner/occupier and give his/her client some indication of the responsibilities arising.  

Whilst some solicitors may wish to develop a specialist practice in relation to contaminated land and advise on the detail, all property solicitors will require to know that there is at least an issue and have a basic knowledge. Solicitors cannot be expected to be experts on historic manufacturing processes and experts on the debris of chemical processes but as men/women of business they are required to use local knowledge and common sense and to liaise with other professionals, to identify problems, give good practical advice to clients and ultimately enable the client to take an informed decision.

There are commercial companies active in the market place, which give detailed information about the risks of contamination in particular areas, and indeed at particular addresses. The Conveyancing Committee has some concerns about the actual practical value of some of these reports. While they do provide information, there is a question mark about their immediate relevancy and the practical interpretation of the information provided. Many do not include an assessment of the overall risk. In the majority of cases a purchaser will find it more useful to know whether he or she is living in a noisy, crime-ridden area than to know the chemical constitution of the sub-soil. The Conveyancing Committee considers that it is only in a minority of cases that significant expenditure on a report from a specialist company will be required in a typical domestic transaction. If practitioners acting in residential property transactions are requested to provide such reports, the Conveyancing Committee suggests that advice should be taken from fellow practitioners specialising in this area. Linsey Lewin may be contacted at the Society in order to obtain a list of such practitioners.

The Handbook also deals with the issue of contaminated land reports at paragraph 5.2.5.  Lenders will confirm in their Part 2 instructions under the Handbook whether they want to receive environmental or contaminated land reports undertaken by third party specialist companies. If the lender does not, the solicitor does not need to commission such reports on the lender’s behalf. In practice, many lenders do not want to receive such reports.

Linsey Lewin, Secretary Conveyancing Committee