Environmental due diligence—leases
Produced in partnership with ELM Law
Environmental due diligence—leases

The following Environment practice note produced in partnership with ELM Law provides comprehensive and up to date legal information covering:

  • Environmental due diligence—leases
  • Land contamination liabilities
  • When is a landlord liable?
  • Environmental due diligence—acting for a landlord
  • Can a landlord carry out intrusive site investigations during the term?
  • When is a tenant liable?
  • Liability under the contaminated land regime
  • Environmental due diligence acting for a tenant
  • Asbestos in buildings
  • Who is the dutyholder?
  • More...

Environmental due diligence—leases

A number of environmental liability issues can arise in property transactions. See Practice Notes: Environmental issues in property transactions—acting for a seller and Environmental issues in property transactions—acting for a buyer.

This Practice Note focuses on the key environmental issues that practitioners should look out for when undertaking due diligence of leases, including:

  1. land contamination liabilities

  2. asbestos in buildings

  3. CRC energy efficiency scheme

Land contamination liabilities

There are numerous potential liabilities associated with land contamination that are summarised in Table A.

Table A: Summary of the main land contamination liabilities
Regulatory actionThird-party liabilitiesContractual liabilitiesOther liabilities
Planning obligations and conditions in respect of developmentPrivate nuisance claimsLease disputesClean up, investigation and monitoring costs
Contaminated land regime, Part IIA of the Environmental Protection Act 1990 (EPA 1990)Public nuisance claimsAgreement for lease disputesLoss of property value
Environmental damage regulations, EDR (England), SI 2015/810; EDR (Wales), SI 2009/995Negligent professional adviceLicence to enter indemnity claimsDelay or aborted transactions
Anti-pollution works notices, sections 161–161D of the Water Resources Act 1991 (WRA 1991)Personal injury claimsRemediation agreementsAccounting provisions
Environmental permit obligations, EPR 2016, SI 2016/1154MisrepresentationInsurance policy disputesNegative publicity

For further information, see Practice Notes:

  1. Land contamination—potential liabilities

  2. Water pollution—potential liabilities

  3. Private nuisance—general principles

  4. Public nuisance—general principles, and

  5. Environmental damage regulations—overview

  6. Environmental permits and exemptions—overview

When is a landlord liable?

Landlords will be concerned that tenants’ activities can:

  1. cause new pollution

  2. mobilise existing contamination

  3. reduce

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