New Builds on Brownfield sites – the pros, pitfalls and solutions

Written by Legal Bricks

Driven by policies focussed on the redevelopment of brownfield land, an increasing number of new homes (c.50-80%) are constructed on former industrial sites.

Whilst these developments aim to regenerate decaying inner urban areas and are seen by many to be preferable to developing on green space, they are not without issues. Houses built on brownfield sites can carry the risk of being on contaminated land, which is problematic not only for developers but potentially for the new owners too.  So what are the advantages and disadvantages of new build developments on brownfield sites and what can be done to mitigate the risks?

Brownfield land gained political significance after the UK government set a national target back in February 1998 to ensure that 60% of new developments were built on brownfield land.  The  regeneration of towns and cities by allowing vacant and derelict buildings to be repurposed quickly for much-needed housing, was championed.    In late 2020, as part of its policy agenda in relation to affordable housing, and its objective of constructing 300,000 new homes per year the government announced a £100m “brownfield land release fund” to promote urban regeneration and development on public sector land.

It’s no surprise then that brownfield sites are attractive to developers, especially as there is less likelihood of objections from neighbouring residents and the fact that there is no requirement to submit a “normal” planning application if the site is being used to build homes. The sites provide an ideal way to continue developing whilst preserving the countryside and there are plenty available.  Research from the Campaign to Protect Rural England (CPRE), has found England alone has enough brownfield land for one million homes.

Potential pitfalls

Whilst developers are encouraged and incentivised to redevelop brownfield sites, they can be costly to develop, not least because of contaminated land issues, the liability for which alters according to when the contamination is discovered.

The legal definition of contaminated land is “land where substances could cause: significant harm to people or protected species, significant pollution of surface waters or groundwater.” In simple terms this refers to land which has been polluted by substances such as: heavy metals, oils and tars, chemical substances and preparations, gases, asbestos and radioactive substances.

If a brownfield site is already contaminated upon purchase by a housing developer it will fall to the developer to ensure a safe site and rectify the issues. If contamination is discovered in the process of development, the developer could still be liable as the origins of the pollution or those responsible could be historic and/or difficult to locate. Owners of new build properties can also become liable if their developer ceases to trade/exist after they purchase their new build home. Even where no liability exists, a contaminated land issue can take years to resolve due to litigation. In the meantime, the new build owner suffers from loss of value, inability to sell or re-mortgage as well as disruption to the land.

Some notable examples include:

Bradford Landfill Development

A development of 13 houses in Odsal, Bradford, was built by Sherwood Homes, which has since ceased trading, on a former landfill site. Although the landfill has not been used for 40 years, a risk of methane gas being released still remains, and residents have been given a £0 valuation on their houses as a result.

Bawtry Gas works

A development of 11 houses in Bawtry, Yorkshire was found to have been built on land contaminated with carcinogenic coal tar, which was found by a resident digging in their garden in 2001. As the East Midland Gas Board (the original site owner) no longer existed and the developer had ceased trading, liability passed to the owners. Eventually remediation was undertaken at public expense because of the vast costs involved.

These cases serve to highlight potential pitfalls and highlight why it is imperative that all necessary steps are carried out before completion of the purchase of any new build property in order to identify and reduce such risks. Remediation of land can have significant financial implications and can make it difficult to re-mortgage or sell the property in the future. Contaminated land can also  of course cause long lasting and serious health issues.

Solutions

As the prevalence of developments on brownfield sites continues, the understanding of the importance of land contamination has increased. It has become more common practice for solicitors to make enquiries about land contamination. Environmental searches are carried out to identify contamination that might affect the property being offered for sale. These environmental searches are supplied with varying levels of detail, ranging from provision of purely factual information through to detailed interpretation of findings.

Searches will also generally include a study of old historical mapping, land use records and other information that might indicate matters of potential concern. As a result of these searches the provider may issue a certificate that the site appears to be at minimal risk of being affected by contamination. Alternatively, if contamination is suspected, a certificate may be withheld, but a warning issued that contamination may be present. This is not a guarantee that contamination is actually present, nor is the issue of a certificate a guarantee that no contamination is at the property.

Legal Bricks offer a free follow up service where a “Refer” is reported back on any of the Environmental searches supplied to law firms.  This means that the internal team liaise with the contaminated land officer at local council level, NHBC, or other relevant bodies, to hopefully obtain enough information to provide the client with a Pass result.

As well as thorough searches, purchasers of new build homes on brownfield land may also consider Land Contamination Insurance to mitigate the risk of becoming liable for any remediation work needed.

For further details on this, land contamination searches and processes as well as a more in depth look at some of the pitfalls of new builds on brownfield sites, join Legal Bricks for a webinar on Thursday 17th June @11:00am. Register here: Registration (gotowebinar.com)

1 Comment

  • test

    It is not entirely correct to say that the contamination will cost the developer…it is only the case if they have not done their due diligence before purchase and have not taken into account the financial liability associated with contamination in their offer price. Unfortunately of late there has been a race to the bottom price with underscoped ground assessments being completed which increases the risk of finding additional contamination during construction.
    WDE Consulting have been undertaking pre acquisitional ground assessments for 20 yrs now and would be happy to answer any further questions.

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