Contaminated Land – Duty to Notify

DBL Solicitors_Contaminated_Land

When acting for a seller preparing to sell land in Queensland, you must ensure they are aware of their obligations under the Environmental Protection Act 1994 (Qld). (the “Act”). Under the Act, a seller must, before a contract is entered into, disclose to any potential buyer if the property is listed on the Environmental Management Register (EMR) or the Contaminated Land Register (CLR). Sellers have a duty to notify buyers should the property be listed on contaminated land registers.

If the seller fails to disclose this, the buyer has a right under the Act to either terminate the contract at any time up till settlement. Alternatively, the buyer can elect to keep the contract on foot but require the seller to pay compensation to the buyer for the cost of remediating the land. Depending on the nature and extent of the contamination, these costs could be very significant.

If the seller becomes aware that the land is listed on the CLR or the EMR after the contract has been signed, then the seller may inform the buyer of this. In these circumstances, the Act gives the buyer a termination right for 21 days after being notified. If the buyer does not terminate during this time, then the buyer loses the right to terminate or claim compensation.

The standard REIQ terms and conditions attempt to alter the buyer’s rights slightly. However, it is not permitted to contract out of the Act, and so the terms of the Act would override the standard terms and conditions in the event of a dispute.

Traditionally the risk of contaminated land and the duty to notify buyers has been associated with the sale of commercial property. However, with increasing development in the Brisbane area of sites which have been used for environmentally relevant activities such as riverfront properties that were previously used as commercial shipyards, the matter is growing increasingly relevant for residential sales.

It is therefore important when discussing a sale with a potential seller that you make enquiries as to whether the land is included on the EMR or the CLR. If you have any concerns, DBL Solicitors can assist with the obtaining of a contaminated land search which will answer the question definitively.

Such a search will provide peace of mind and ensure that buyers are not given termination rights able to be exercised at any time until settlement.

Contact us for further information or a confidential discussion on whether a search is appropriate in your circumstances.

Alistair Cowen
Senior Solicitor

Alistair Cowen