Encyclopedia
Contaminated site
Land with substances in soil or water above provincial standards. The Environmental Management Act sets out responsibility for cleanup, which can reach past and present owners.
For example: A buyer of a lot that once held a gas station asks for environmental reports before removing subjects. (Illustration only, not a real deal.)
Official source: Site remediation (Government of BC)
Example only, not a real client. Say you are buying an old service station property. Records suggest past fuel storage. You order environmental testing and learn cleanup is needed, then negotiate the price and who pays before you commit.
What I’d tell a friend
Find out about contamination before you buy. Cleanup can be costly, and liability can follow owners.
Why it matters to you
Cleanup costs can be large, and responsibility can fall on current owners as well as the polluter. It can also make lenders cautious and slow a sale.
How to use it in your deal
Buyers should get a site disclosure statement where required, order a Phase I environmental site assessment, and do a Phase II if the Phase I finds potential issues. Under the Environmental Management Act, current and past owners and operators can be responsible for remediation, so legal advice matters. Lenders often require environmental reports before financing. Sellers should disclose known issues.
Landlords should require tenants to comply with environmental laws and to clean up anything they cause, and should document site condition at the start and end of the lease. Tenants with operations that use chemicals should expect environmental clauses and possibly baseline testing. The province's site registry shows some sites with environmental records. Redevelopment of a contaminated site may require provincial approvals before permits are issued.
Mistakes I see
Skipping environmental assessments. Assuming the seller is responsible. Not documenting site condition at lease start.
In BC and Vancouver
The Environmental Management Act and Contaminated Sites Regulation set responsibility and standards.
Official sources: Environmental Management Act (BC Laws) · Contaminated Sites Regulation (BC Laws) · Site remediation (Government of BC) · Site information and the Site Registry (Government of BC)
What it means
A contaminated site is land where substances are present above levels allowed under environmental standards.
In BC, the provincial environment ministry oversees contaminated site rules.
Protecting yourself
Order a Phase I environmental assessment and, if needed, a Phase II with testing.
Get advice from a BC lawyer on liability, indemnities and contract terms, and ask lenders about their requirements.
Questions to ask before you sign
- What's the site's history?
- Has a Phase I been done?
- Is it on the registry?
- Who's responsible for cleanup?
- What does the lease say?
Allocate cleanup in the contract
When land may be contaminated, the deal has to say who investigates, who remediates, who talks to the regulator, and who pays if costs overrun. Directors of a property company can face personal exposure in some fact patterns—another reason not to improvise.
Price and structure follow the risk allocation. A cheap purchase that leaves you with an open cleanup is not cheap.
Environmental counsel and a qualified consultant should lead; I help keep the commercial dates workable.
Keep reading
Related terms: Environmental Site Assessment (Phase I), Phase II ESA, Site disclosure statement
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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.