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Environmental Liability

When purchasing or leasing agricultural land, one of the main unknowns can often be the environmental condition of the land in question. Farming practices often make agricultural land vulnerable and susceptible to contamination from waste products or potentially harmful materials that are used as part of intensive farming.

Whilst a visit to the land and inspection is often a good starting point, it is worth bearing in mind that agricultural process often results in unseen contamination and environmental issues.

Seeing is believing

A detailed site inspection should give you a good starting point as to the general condition of the land. It should be obvious from the same what type of agricultural practices are or have been carried out. Some important things to look out for are;

Slurry and manure stores - there is the potential for contamination from these natural products particularly if they are located close to watercourses;

Fuel/ chemical stores - the potential for contamination from such unnatural products is high and the potential consequences of the same can be grave as can the costs of cleaning up such contamination can be extensive; and

Infilled land - this may not be easily apparent from an inspection, but if land has recently been infilled or there are unusual looking areas to the land, there may be an issue of infilling which if unauthorised can result in costly fines.

Above all a site inspection should give you an indication of the further enquiries that you may need to carry out in order to satisfy yourself that the land in question is indeed what you anticipate and if not, then to allow you the opportunity to resolve the issues prior to completion.

Enquiries and Searches

Finding out as much information as possible about the land is also a prudent step. Agricultural land is usually a significant investment for any individual or business and carrying out full due diligence is very important to ensure that there are no hidden or unknown issues that will cause problems.

In relation to the environmental condition of the land, an environmental assessment is a recommended search and will report on any potential contamination of the land, the flood risk status of the land, any infrastructure and developments in the area (renewable energy installations and the like) and also things like the Radon status of the land. There are tailored agricultural environmental searches that look more in depth at agricultural specific risk factors and the use of the land which are advisable for a high level of due diligence.

In addition, it is standard practice to raise certain enquiries with the Seller/Landlord prior to completion, these usually take the form of Commercial Property Standard Enquiries 1 ('CPSE 1') and there is an agricultural specific version of CPSE 1, which raises specific enquiries regarding entitlements, nitrate vulnerable zones, stewardship agreements and known contamination. Such enquiries are advised and knowledge of any compliance schemes in place for the land is necessary when considering any potential issues regarding environmental liability.

Conclusion

In summary it is vitally important to make sure that you have as much information about the environmental condition of agricultural land prior to completion of any lease or purchase of the same. As the owner/occupier you could find yourself open to liability for any contamination and also potentially regulatory and criminal sanctions.

Inspections of the land together with detailed agricultural specific searches and enquiries are strongly recommended so that you know exactly what you are buying and that any environmental issues are uncovered at the earliest possible point.

For more information contact Michael Rutter in our Commercial Property department via email or phone on 0333 207 1147. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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