intouch

The contaminated land regime, introduced by the Environmental Protection Act, is now in its 13th year, and it's certainly debatable whether it has ever delivered the desired outcome.

From the start, it caused confusion in the conveyancing market, with everybody involved seemingly wishing to wash their hands of the issue. Surveyors made it clear that they give no advice on contamination issues, and lenders too have been careful not to lay down specifically what procedures and protection they would like to see. It all leaves the issue in the conveyancers' hands, without any clear directives or guidance from the central bodies. Conveyancers, for their part, have at least been doing something by obtaining environmental reports.

In my view, although environmental reports are useful for revealing what is known, they don't actually solve the problem in a conveyancing transaction. These desk-based reports use only what environmental history is available, and do not definitively prove whether contamination exists or not. Recognising this, lenders do not request these reports, and have made it clear that they do not wish to see them.

So what is the answer? In my opinion, the only real one is insurance. Legal indemnity policies are used these days to deal with all sorts of conveyancing problems, so why not contamination issues too? After all, it is cheap, freely available, and our policy does not even need an environmental report to be underwritten.

Insurance protects both purchaser and lender, and in addition to the potential clean-up costs, it covers other vital perils like blight caused to the property following the discovery of contamination. There are in fact thousands of properties already blighted in this way, where an insurance policy would have ensured a speedy clean-up and covered any resulting blight.

Of course, some stronger guidance from lenders and other central bodies would help, but it seems to me that only insurance can solve what is such an unclear issue in almost all conveyancing transactions.