Canadian Lawyer

20 J A N U A R Y 2 0 1 8 w w w . C A N A D I A N L a w y e r m a g . c o m nvironmental contamination has become an increasing concern in real estate and the resulting liabilities could far exceed the original cost of the property. Often, it's simply not a consideration at the time of purchase because it may not be apparent by its current use. Once environmental concerns are dis- covered, it becomes a cumbersome bur- den. In some provinces, the new owner could be left paying the entire bill for the cleanup. In other provinces, such as British Columbia and Ontario, previous owners can be held liable. However, real estate lawyers can play a significant role to mitigate and help the buyer avoid unanticipated environmental issues early on. There is even potential to renegotiate the purchase price if the level of contamination is tolerable for the end user. "We've got a lot of these sites . . . and the issue is always cost; who should pay and how that should be dealt with in terms of the buyer, the seller," says Calgary lawyer Rob Omura, referring to unregistered and unregulated dump sites and old drilling wells. "The difficulty always is, when it comes to historical use of the land, sometimes that's not obvious. "Prior to 50 somewhat odd years ago, they just did not appear on maps." For residential properties, the pre- dominant rule has been caveat emp- tor. The buyer has the obligation and responsibility to make all the inquiries and investigate previous uses of the land, although the seller is required to disclose known issues. Commercial properties could be more complicated. In Alberta, for instance, old drilling wells predating 1950 were never mapped out or distinguished. And Omura says there isn't a clear record of wells drilled prior to 1970. The possibility of contamination, including historical problems, needs to be considered in every purchase, says James Mosher, a McInnes Cooper partner and office lead in Saint John, N.B., whose prac- tice focuses on corporate commercial law including real property. "In New Brunswick, if environmental contamination is discovered on a property, the owner of the property is liable for the cleanup irrespective of who actually caused the contamination. So, clearly, you can go after the cause of the contamination, but the owner of the property will be responsible as well. If you purchase a property and it's con- taminated, guess what, you just purchased a liability. So, it's a major concern," he says. Exploring provincial environment departments' files and contamination regis- tries ought to be part of the due diligence to R E A L E S TAT E ALEXI VELLA Managing contamination in a sale Lawyers have several tools to help buyers mitigate unanticipated environmental issues By Marg. Bruineman E

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