Agents and sellers should be aware of the requirements of section 408 Environmental Protection Act 1994 which in essence requires a seller to provide a buyer with a notice advising if the property is affected by contamination.

Terminating A Contract Due To Contaminated Land

The section lists circumstances where such a notice is required which include the property being registered on the contaminated land or environmental management register, being subject to a show cause notice, an environmental evaluation, a clean up notice or environmental management plan. In such circumstances, a seller must provide the buyer with a notice in the prescribed form.

Failure to provide the buyer with such notice can lead to:

1. The seller incurring a fine (currently up to a maximum of $6,095), and
2. The buyer can terminate the contract before it settles or before the buyer is granted possession of the property, whichever is the first to occur. The buyer’s deposit must then be refunded.

The section gives a seller some relief if he/she has omitted to serve the notice on the buyer before the contract has been entered into by allowing the seller to serve the notice on the buyer after the contract has been entered into. In such circumstances, the buyer will have 21 days after receiving the notice in which the buyer may terminate the contract and recover the deposit. If the buyer does not terminate the contract within such period then the buyer is taken to have waived his/her right to terminate the contract under this section.

If agents or sellers are unsure whether the land is affected by the matters referred to above then they should undertake a search of the contaminated land register and the environmental management register to establish the position.

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This update is for your information and interest only. It is not intended to be comprehensive, and it does not constitute and must not be relied on as legal advice. You must seek specific advice tailored to your circumstances.

This article was originally published on the 27^th of March 2017. It was last updated on the27 ^th of October 2022.