Important call for evidence for landowners

United Kingdom

In England and Wales in certain circumstances liability in respect of the removal and clean up of waste deposited at a premises can attach to landlords where the tenant disappears or becomes insolvent. There is also the issue of “fly tipping” where there is no legitimate authorised use of the land and where offending parties are difficult to trace or in any event have no assets to contribute to removal costs. The problem of dealing with the deposit of unlawful waste is increasingly an issue for those far physically removed from the land itself and should be a consideration at the forefront of institutional investors and commercial landlords alike when leasing premises.

In addition to any clean up costs, attention should also be drawn to unwittingly attracting criminal culpability. In the context of environmental permitting there has been one reported instance where in effect a corporate landowner has been prosecuted by the Environment Agency for a criminal offence in that it had “knowingly permitted” a demolition company to operate on its land without an environmental permit. Last year the Court of Appeal held that the prosecution did not have to prove that the landowner knew the activity was unauthorised but simply that the law required that the company ensure that what was happening was compliant with the conditions of an environmental permit. The questions posed at first instance were not criticised: (1) Did the Company have knowledge of waste operations occurring on its land? (2) If so, did the Company permit, i.e. allow or fail to prevent, those waste operations? (3) Were the waste operations of which the Company had knowledge in accordance with an environmental permit?

Many may be surprised by this ruling but very often environment law is predicated on the basis of strict liability. In this instance had further questions been raised by the Landlord of the demolition company or checks been made with the Environment Agency it is possible that action could have been avoided.

Until 6 May 2015 DEFRA and the Welsh Assembly Government are consulting on significant changes to the powers of the Environment Agency and Natural Resources Wales. In particular, in seeking views on a range of issues, they have raised the ability to require the removal of waste from land (which may fall onto landlords) and raising awareness of potential liabilities for landlords. The consultation documents are available online

The Consultation: Mandatory removal of waste

It is proposed to change the law so that the regulators have powers to require the removal of waste where the initial deposit was lawful but the continued presence or storage of that waste subsequently becomes unlawful. The consultation identifies that landowners may have to deal with waste removal and associated costs, which is touched upon in the call for evidence.

The Call for Evidence

The call for evidence acknowledges good practice which may already be in place such as carrying out due diligence of potential tenants; agreeing lease terms which may cover evidence of the lawful deposit of waste and provide appropriate rights of redress; obtaining a bond/sinking fund or personal guarantees and alerting regulators to issues arising. Nevertheless it also acknowledges that bringing a lease to an early end may result in the abandonment of the site by the operator. It also recognises that unlike in Scotland, a liquidator of a company in England and Wales has the power to disclaim onerous property and the courts have previously held that a waste management licence (now an environmental permit) was capable of being disclaimed. The regulators consider that the same principle would apply to environmental permits which could mean that the landlord is left with clean up liabilities.

Specifically both DEFRA and the Welsh Assembly Government have asked for proposals on mechanisms to increase awareness of landlord liability in relation to waste management operations. They are also querying whether regulators should require an applicant for an environmental permit (and the registration of waste operations) to provide evidence that they have notified the landowner of their intention to carry out a waste management activity or evidence from the landowner that they consent to the activity.

This is a genuine opportunity for landowners to engage in the debate and potential solutions to the increasing issue of abandoned waste. It may also prove timely to review lease provisions and check activities on premises to reduce future liability.