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Contamination – A Trap For The Unwary Lawyers Conveyancing provides a comprehensive pre-purchase advice service for consumers. A major area of concern for consumers is soil contamination, involving more issues than you might expect!
 Contamination is a problem for vendors and purchasers alike. For vendors it may worry potential purchasers resulting in a lower sale price. Most estate agents don’t bother to fully investigate contamination issues, and we have seen purchasers win bargains where the estate agent has been unable to answer crucial questions about the extent or nature of the contamination.
For a purchaser, buying a contaminated property may affect not only personal health, but also the resale value of the property. Careful investigations may reveal that the contamination is within acceptable limits, but what if the title is permanently marked as “contaminated”? Problems for the vendorA vendor who sells contaminated property will, in most cases, be required to make disclosure to potential purchasers through the Section 32 Vendors Statement.In some cases, the vendor’s lawyer may advise the vendor to pass responsibility for proper investigation to the purchaser, by way of a special condition. For example, we often find the following special condition in contracts: "The Vendor has not made and shall not be construed as having made any representation or warranty that the Property is free of contaminants. Prior to entering into this Contract the Purchaser has made its own enquiries and investigations as to the environmental state of the Property and the Purchaser has relied and relies entirely on the result of its investigations and on its own judgment in entering into this Contract."However, while this may limit the vendor’s liability, it may also have serious consequences for the sale. We provided advice to a client of ours regarding a contamination condition, and the result was described to us in an email he sent to us after he bought at auction: "Peter,In this case, the auctioneer’s failure to properly inform himself as to the extent and nature of the contamination, and his inability to allay the concerns of other potential purchasers, resulted in a loss for his client. (It should be borne in mind that the loss to the estate agent would have been minimal, as a full commission would have been paid, with only a small deduction for the thousands of dollars lost by the vendor.) Problems for the purchaserIn some cases, contamination information may be permanently on title. In other words, a search of the title will reveal a contamination problem. We recently reviewed a Section 32 Vendors Statement for a client, and noted that the title included reference to what is known as a Section 173 Agreement. The Section 173 Agreement in turn made reference to contamination on the property under the heading “Addressing Contamination”.The document made reference to an environmental audit, and to the “capping” of the contamination with “clean fill”. Under the heading “On-going Precautions” appeared the following: “The Owner must ensure that, at the Owner’s cost, the fill or other material constituting the capping the subject of Clause 2.8 is maintained properly and to the satisfaction of the Council so as to isolate any contamination.”Under the heading “EPA Involvement” was the following: ”The Owner must, at the Owner’s cost and to the extent required by the Council, comply with the requirements of the Environment Protection Authority in relation to matters relating to those the subject of this Agreement.”We advised our client to consider the following issues when deciding whether or not to bid at the auction: From a personal health position:
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