Environmental issues in property transactions—acting for a seller
Produced in partnership with ELM Law
Environmental issues in property transactions—acting for a seller

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

  • Environmental issues in property transactions—acting for a seller
  • Types of environmental liabilities
  • Transfer of environmental permits
  • Contaminated land liabilities
  • Law society practice note
  • Licence for environmental investigations
  • Liability bounce-back after the sale of a property
  • How to transfer liability for contaminated land
  • Options for environmental liability transfer
  • Sold with information test
  • More...

Types of environmental liabilities

There are several types of environmental liabilities associated with land, buildings and fixtures.

Under the caveat emptor/buyer beware rule, these liabilities and any capital expenditure requirements will generally pass to the buyer as the new owner of the property.

However, whether the seller retains liability will depend on the particular regime, and whether the transaction is an asset sale or share sale. For example, in an asset sale, if the seller has not complied with an environmental permit or has caused or knowingly permitted pollution, these liabilities may attach to the seller company or individuals, even after the sale.

The different types of environmental liabilities are summarised in the table below.

SourcesExamples
LandContamination, asbestos in soil, water pollution, environmental damage, landfills, fly-tipped waste, flooding, ground subsidence, sinkholes, coal mining, unexploded ordnance, radon, Japanese knotweed, wildlife and habitat protection, riparian ownership, shale gas, energy projects, planning conditions, high speed 2, cross rail, compulsory purchase.
BuildingsAsbestos in buildings, air conditioning inspections, energy management and reporting, energy performance certificates, minimum energy efficiency standards, display energy certificates, CRC energy efficiency scheme, energy savings opportunity scheme, F-gases and ozone-depleting substances.
FixturesOil storage tanks, underground storage tanks, septic tanks and sewage treatment plants.
Environmental permits and licencesNoncompliance with the conditions of an environmental permit or other environmental licence or authorisation or carrying on polluting activities without the necessary

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