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Environmental Due Diligence

Environmental Due Diligence should be a key consideration for any transfer of land and property as environmental liabilities can have a significant bearing on land value. Whether a purchaser is simply looking to make an investment with an ongoing use for financial return, or to redevelop the site to an alternate use, an understanding of risk would be a prudent early stage consideration.

Why is Environmental Due Diligence Important?

Environmental liabilities relate to the risk of regulatory enforcement and associated clean up of residual contamination from a past use. This can occur even with an ongoing site use, as to knowingly pollute and thereby a requirement to remediate is enforceable under the Environmental Protection Act 1990 (Part 2A). Local development on a neighbouring site, or impact to groundwater abstractions can trigger a Local Authority investigation, likely leading to enforcement and mandatory clean up. Depending on the extent of Contamination clean up bills can run into significant sums, an abnormal which can be overlooked.

Why Consider Environmental Due Diligence?

Beside immediate the financial cost for clean up, the presence of contaminated ground can have an indirect impact via reduced property value, a limit on future sales due to association with a known impacted site, and loss of rental income whilst remedial works are undertaken.

In addition, Environmental, Social and Governance (ESG) factors may mean that association with Environmental liability could have reputational impact in terms of stakeholder perception.

Change of use implications:

The current land use of a site has a bearing on the level of risk deemed acceptable for current and future site users. Whilst the risk to Controlled Waters remains in either scenario, the use of a site for a commercial industrial estate is of a lower sensitivity than those used for a residential end use with gardens. Whilst an out of town commercial piece of land may look an ideal location for infrastructure links, its historical heritage and what is in the ground must be fully considered.

Due Diligence Assessments:

Early stage review of a site can highlight the most common sources of contamination at an early stage via an initial Phase 1 Desk Study. Depending on timeframe, a site inspection can be undertaken within a few days of instruction, allowing a summary of risks to be highlighted to the client in a tight timeframe.

Typically the following risk features can be identified from a site audit by one of our Geo-Environmental Surveyors:

  • Fuel Storage Tanks
  • Good housekeeping in relation to chemicals;
  • Oil Interceptors and association hydrocarbon infrastructure
  • Stockpiled wastes, and earth bunds
  • Back up generators and containment features
  • Invasive species such as Japanese Knotweed
  • Proximity of drainage features allowing transfer off site alongside identifiable damage.

Speak With Our Team

Tim Mitchell

Director

Environmental Consultants

Read our Due Diligence case study written by the team