Saving shock and expense

Nobody likes unpleasant surprises when buying commercial property. Neither clients nor their solicitors want to lose profit on the deal. However, property buyers who neglect or leave it too late to do environmental due diligence (EDD) risk this shock – and having profit on a purchase eaten up by environmental liabilities.

The practice of EDD originated in the United States in the 1970s. It is based on the principle that, if land is contaminated, the owner must clean it up. Critically, though, US courts have decreed that buyers or leasers of property can sometimes be on the hook for land remediation – even if it was a prior owner who caused the contamination.

The Irish picture

The story is slightly different in Ireland, where the EDD industry has grown out of development, and regulation is based more on the ‘polluter pays’ principle.

Kevin Cleary is Operations Director with Verde Environmental Consultants. Writing in the Gazette, he notes that there are legal pathways in Irelandfor a lender and a non-polluting owner/operator to become liable for contamination. Therefore, he argues, buyers need to know the condition of a site they’re purchasing and must price the risk of clean-up costs into their purchase price.

• Read the full article in the November 2017 Gazette

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