Environmental due diligence and insurance

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For further guidance on how environmental issues may crop up in sales, leases, corporate transactions, real estate finance and property development, Environmental issues in transactions—overview. For further guidance on the various energy schemes in relation to buildings and renewable apparatus, see Energy and renewable apparatus in buildings—overview.

The purpose of environmental due diligence

The purpose of environmental due diligence is to:

  1. •

    assess the risk of contaminated land liabilities

  2. •

    investigate other risks associated with land and buildings such as asbestos, fly-tipping, subsidence, Japanese knotweed, storage tanks and energy performance issues

  3. •

    identify any material non-compliance issues or threatened proceedings or claims associated with the property or target

  4. •

    highlight any capital expenditure requirements to comply with permits or legislation, such as works to comply with minimum energy performance standards

  5. •

    check if any environmental permits need to be applied for or transferred

  6. •

    provide recommendations to help mitigate these risks as far as possible through contractual protections, price negotiations, further investigations or environmental insurance

For further guidance, see Practice Notes:

  1. •

    Environmental issues in property transactions—acting for a buyer

  2. •

    Environmental issues in property

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