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For several years now, councils have been investigating sites for potential contamination, and if it is unearthed, the financial implications can be severe and far-reaching.

The legislation introduced under Part IIA of the Environmental Protection Act 1990 stated that if contamination is discovered, the crippling cost of remediation would potentially fall to householders if the local authority was unable to trace the original polluters.

But for homeowners looking to sell their house, the real issue is that the discovery of contaminated land can blight their property. Regardless of who eventually foots the bill, there can be major delays as the local authority has to establish exactly who is responsible for the cost of clean-up. This will make the property difficult or impossible to sell until the situation is resolved, and could lead to a loss in its value.

Property sale thwarted

One current example of this is a property in Lincoln. The owners intended to put their house up for sale in 2012, but were thwarted due to a letter from the local authority saying that their home was built on contaminated land and required remediation.

The local authority applied for funding from the Department for Environment, Food and Rural Affairs (DEFRA), but their application was unsuccessful. Although it seems that the local authority may have identified the party responsible for the contamination, trying to get the culprits to fund the remediation is likely to be a lengthy process.

A helping hand

Thankfully, the homeowners in this case are covered by our Home Environmental Liability Policy (HELP), and our Claims team is currently considering a number of options, including 'voluntary remediation' to free the property of contamination. This involves the owners undertaking remediation with the assistance of an environmental consultant and the local authority. The cost could run into thousands of pounds, but in this instance, is covered by our insurance policy, as is any loss in value of the property after work has been completed. The case is ongoing, and we will provide more details in a future edition of intouch.

What is covered by HELP?

HELP is designed to cover all costs involved in complying with a remediation notice issued by the local authority, or for carrying out works to prevent a notice being served. Our policy also covers any loss in market value of a property when sold in the future, following a claim.

Whether or not you've got an environmental report, providing there's no official investigation or activity underway, our cover is freely available and protects both the purchaser and lender. Find out more about our contaminated land policy.