Environmental issues in transactions

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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:

  1. •

    land contamination

  2. •

    air pollution

  3. •

    water pollution

  4. •

    flooding

  5. •

    asbestos

  6. •

    exposure to hazardous substances

  7. •

    subsidence and sinkholes

In a property context, environmental issues can arise from:

  1. •

    historic use of the site (eg previous industrial uses)

  2. •

    historic and/or current use of nearby properties (eg potential leaching of contaminants from other sites)

  3. •

    the current or proposed use of the site (eg a potentially contaminating use or a use requiring specific permits/licences)

  4. •

    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:

  1. •

    potential impact on the value of assets (eg remediation or other clean-up costs)

  2. •

    operational risks (eg transfer, suspension or revocation of an environmental permit or other necessary licence)

  3. •

    reputational risks (eg pollution incidents or perception

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