Environmental issues in transactions

Environmental issues affect freehold and leasehold interests.

Environmental risk

Legal advice in property transactions requires identifying environmental risk which encompasses a broad range of environmental issues both natural and human induced such as:

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land contamination
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air pollution
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water pollution
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flooding
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asbestos
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exposure to hazardous substances
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subsidence and sinkholes

In a property context, environmental issues can arise from:

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historic use of the site (eg previous industrial uses)
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historic and/or current use of nearby properties (eg potential leaching of contaminants from other sites)
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the current or proposed use of the site (eg a potentially contaminating use or a use requiring specific permits/licences)
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regulatory requirements (eg Energy Performance Certificates, Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, Energy Savings Opportunity Scheme (ESOS), building regulations)

Legal advice in relation to property transactions requires a commercial assessment of the target's actual or contingent environmental risks and liabilities, including:

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potential impact on the value of assets (eg remediation or other clean-up costs)
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operational risks (eg transfer, suspension or revocation of an environmental permit or other necessary licence)
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reputational risks (eg pollution incidents or perception

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