Uh oh, I bought contaminated land: Who must pay cleanup costs?

Only if the seller knew about the problem and lied to you might you be off the hook for cleanup costs.

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Question

"I just bought a piece of land to build a house on, but the construction crew has unearthed some buried garbage, and it's seeping an awful green color. Who must pay to clean this up, given that the problem is not my fault?"

Answer

Sorry to deliver bad news, but when it comes to environmental problems on a piece of land, the basic rule is that the current owner is responsible for its clean up.

This is why it’s important to obtain an environmental assessment before purchasing. Since it sounds like you did not do so (you must have missed Nolo’s article Before Buying Vacant Land: Getting an Environmental Assessment”), you’re now stuck with a problem you didn’t create.

An exception might help you if the seller knew about the problem and outright lied to you about the condition of the land before you purchased. If this is the case, you might get the seller to pay for the clean up. However, this might require litigation (or the threat of litigation) against the seller. An experienced attorney in your area can help you determine the merits of a possible legal action and assist you in a lawsuit against the seller if warranted.

If you can’t prove that the seller knew about the problem, you will need to hire an environmental engineering company and get an estimate of cleanup costs. The engineers will examine the site and analyze the soils and water to determine the extent of the problem.

The best scenario is that the green ooze is nontoxic, harmless, and won’t affect your construction plans. If not, however, you might be in for some expensive remedial work, such as removing and replacing the contaminated soils. Federal and local laws are likely to regulate the extent and type of cleanup required and who must perform it. (For example, the laws might require a licensed professional to complete the clean up, or prescribe certain allowable excavation and fill methods.)

If you don’t want to invest the time, money, and energy generally involved in a cleanup operation, you can attempt to sell the land. Because you are aware of the problem, however, you will be legally obligated to disclose it to any potential buyer.

Also, a sophisticated buyer might obtain his or her own environmental assessment of the property and a cleanup cost estimate before purchasing. Most buyers will demand a discounted sales price (to make up for the cleanup costs) before completing the sale.

Even though it’s unhappy news, be glad you discovered the contamination before completing your home. The consequences of unwittingly living on contaminated land could be worse than the potential cleanup costs. You might get sick from drinking contaminated water, or cause illness to people or animals who come into contact with the contaminated site.

Hopefully, upon further investigation you’ll find the green ooze is harmless, the site requires minimal cleanup, and you can go ahead and safely build your dream home.

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