Buying land without understanding the environmental contamination on site is risky business – leaving you vulnerable to steep remediation costs. Learn how commercial and residential land buyers are often left standing with the bill, and how environmental investigations can help you avoid this for your next property purchase.

Get the full picture of contamination on your site.

 

Falling into a contaminated land trap

 

Rushed and poorly informed.” That was the NSW auditor-general’s verdict in its assessment of contaminated land purchased by Transport of NSW for the Parramatta light rail project in 2021. The state body paid three times the land value – excluding remediation costs that have since reached over $100 million – without seeking professional advice.

Buying land without the full picture of on-site contamination can leave new land owners with the responsibility of remediation. It can also significantly reduce the land value. For example, delayed removal of contamination in Sydney’s Hunters Hill, caused by the Old Radium Hill Refinery, reduced residential land value by over 20%. 

A professional environmental consultant will identify on-site contamination and outline the necessary remediation costs before you buy. Without one, land buyers can be left at serious financial risk.

Why new land buyers can be left holding the buck

 

As usual, the devil is in the legal details. Vendors must disclose all relevant information about contamination on site that they’re ‘knowledgeable’ about. If the seller has ‘no knowledge’ of contamination, this can be used as grounds for a defence against paying remediation costs after the sale.

In NSW, the responsibility for dealing with contamination and remediation first sits with the polluter. If the polluter cannot be found, this responsibility shifts to the land owner or mortgagee in possession. 

NSW has a long industrial history and there are potential contamination sites all over the state – not to mention thousands of forgotten service stations. Contaminated land will be subject to environmental requirements from both NSW EPA and local council. 

The new owner will need to meet these clauses and remediate contamination before the land can be rezoned or sold.

NSW Land Buyer, Beware:

In many instances, the property owner will seek to pass all liability for contamination onto the incoming purchaser or tenant. This is an unfair position for a vendor or landlord to take, as in most instances, they would most likely have significantly more information about the site, its past usage and any contamination issues than any incoming party.”

Colin Biggers & Paisley Lawyers

NSW land buyers rights

 

Under Australian Consumer Law and Fair Trading, all land buyers have the right to necessary information disclosed before purchasing land. 

There should be a ‘subject to an investigation’ clause in the Contract of Sale before settlement. At this point, land buyers should negotiate: 

  • Who will pay for the environmental investigation. 
  • How the environmental team will gain full access to the land.
  • Who will cover remediation costs for contamination found on site. 

Recommendations for NSW service stations: Environmental Site Assessments (ESA)

Buying land that has been used for service stations will require an Environmental Site Assessment (ESA). An ESA Stage 1 will examine the site’s historical land use, land contamination registers, EPA records and more. This includes an on-site investigation including walkover and broad sampling of potential contamination areas then tested in NATA accredited laboratories. ESA reports should be created by expert environmental specialists, including Certified Environmental Practitioners (CEnvP). 

An ESA Stage 2 report builds on ESA Stage 1 findings and is only required when significant contamination is expected. This includes additional on-site sampling and testing to understand the extent of contamination, reporting findings and recommendations to remediate and validate the site.

Make sure you have a trusted environmental service provider who will take the necessary scope to ensure all risk of contamination on site has been tested and accounted for. 

Recommendations for residential and commercial sites: Environmental Site Investigations

Compared to an ESA, environmental Site Investigations will have more stringent requirements to meet local council and NSW EPA standards. 

A Stage 1 Environmental Assessment or Preliminary Site Investigation (PSI) will assess the site’s history and potential for contamination.. You will receive a professional report outlining areas of potential contamination with recommendations. If the results show or there is assumed potential presence of  contamination, then a Stage 2 Environmental Assessment or a Detailed Site Investigation (DSI) will be conducted. This includes sampling and testing of high-risk areas on site, outlining the full extent of contamination, and specifying the necessary steps for remediation and site validation. 

Both Preliminary and Detailed Site Investigation reports should be reviewed by an experienced CEnvP.

Before you buy, always ask for an environmental investigation report

 

Before purchasing land, know what you’re paying for. A comprehensive environmental investigation can save you a fortune in future remediation costs and lost land value.


NEO Consulting serves residential and commercial land sites across Greater Sydney and NSW. We’re fast, Council connected and hold a deep understanding of the local ecology. For the full picture on contaminated land before you purchase, reach out to our local team of environmental experts.

Stay compliant with NEO Consulting.