, Property
Half an acre behind a row of shops, previously a motor factor's yard and before that, according to the 1938 map, a small gasworks. The agent says there is interest and wants offers by Friday. The price is a third of what the same plot would fetch on a green field two streets away.
That discount is not a bargain. It is the market's estimate of what is underneath, made by people who also do not know.
Liability follows ownership, not just the polluter
Part 2A of the Environmental Protection Act 1990, inserted by the Environment Act 1995 and brought into force in England in April 2000, is the regime you need to understand before you make an offer.
It requires local authorities to inspect their areas and identify contaminated land, meaning land in a condition where significant harm, or a significant possibility of significant harm, is being caused, or where pollution of controlled waters is occurring or likely. Where land is determined as contaminated, a remediation notice can be served. Particularly serious sites are designated special sites and pass to the Environment Agency, or SEPA in Scotland and Natural Resources Wales in Wales.
The part that matters commercially is who pays. The regime identifies an appropriate person. Class A is the person who caused or knowingly permitted the contamination. Class B is the current owner or occupier, and Class B becomes liable where no Class A person can be found after reasonable enquiry.
The gasworks operator from the 1930s cannot be found. The motor factor's company was dissolved in 2004. That leaves the owner, and if you buy on Friday, that is you. Statutory guidance adds exclusion tests that can move liability between parties, including where a seller sold with information, which is one reason sellers of brownfield sites are keen to hand you a survey report before exchange.
In practice most contamination is dealt with through planning rather than Part 2A. A permission on a site with a history will carry a condition requiring investigation, a remediation strategy and a verification report before occupation. That is a better outcome for you, because it is a process with a defined end, but it is still your money.
The two surveys do different jobs and only one of them finds anything
A phase one, properly called a preliminary risk assessment, is a desk study plus a walkover. Historical Ordnance Survey maps back to the nineteenth century, trade directories, landfill records, mining records, borehole logs, records of authorised discharges, and a visit. It produces a conceptual site model: what the likely contaminants are, where they might be, what the receptors are, and whether there is a plausible pathway between them.
It costs a few hundred pounds and takes a week or two. There is no sensible reason to bid on a brownfield site without one.
What it does not do is tell you what is there. A phase one identifies risks, and its useful output is a recommendation: either no further work, or a phase two.
A phase two is intrusive. Trial pits, boreholes, soil samples, groundwater monitoring wells, ground gas monitoring over several visits across varying atmospheric pressure, and laboratory analysis against generic assessment criteria. The cost range is wide because the scope is wide. A small site with a simple question might be a few thousand pounds. A former industrial site with ground gas monitoring, multiple rounds and a detailed quantitative risk assessment is a different order of magnitude, and it takes months rather than weeks because the gas monitoring has to happen over time.
That timing is the problem. A phase two cannot be squeezed into a four week exchange, which is exactly why sellers of difficult sites like short deadlines.
Remediation is priced by the lorry load
Once you know what is there, the options run roughly from cheapest to most expensive as follows. Leave it and break the pathway, typically with a clean cover system and a gas membrane, which is the standard answer for residential gardens over mildly contaminated made ground. Treat it in place, using bioremediation or stabilisation. Treat it on site and re-use the material, which avoids the disposal cost. Or excavate and take it away.
The last one is the one that ruins appraisals, because the cost is driven by landfill tax rather than by haulage. The standard rate of landfill tax was £126.15 per tonne from 1 April 2025, against a lower rate of £4.05 per tonne for qualifying inert material. The rates are uprated annually, so check the current figures, but the shape does not change: whether your material qualifies for the lower rate is worth more than any negotiation with the haulier. Hazardous waste costs more again and has its own consignment paperwork.
Add to that the things a phase two does not price. Asbestos in buried demolition arisings, which is common on any site cleared before the 1999 ban took full effect. Underground storage tanks, which have to be emptied, cleaned, gas freed and removed. Japanese knotweed, which is not contamination at all but behaves like it commercially, since it affects lending and the excavated material is controlled waste under the duty of care in section 34 of the Environmental Protection Act 1990.
One genuine offset is worth knowing. Land Remediation Relief gives companies a 150% deduction against corporation tax for qualifying expenditure on cleaning up land acquired in a contaminated state, with a payable credit available to loss-making companies. You cannot claim it if you caused the contamination, which is the point of it. It does not make a bad site good, but it changes the after tax cost of a marginal one.
Pricing a site before you know what is in it
You will frequently have to bid without a phase two, because the seller will not give you the time. There are three ways to handle that and only one of them is reckless.
The reckless one is to guess at a remediation figure and put it in the appraisal. You will guess low, because everyone does.
The first sensible option is to make the offer conditional on satisfactory investigation, with a period to carry it out and a right to withdraw or renegotiate. Sellers dislike it, and on a competitive site you will lose. On a site that has been on the market for eight months, you will not.
The second is an overage or clawback the other way round: agree a price with a mechanism that adjusts for remediation costs above an agreed figure, capped and evidenced by a jointly appointed consultant. It is more work for the lawyers and it gets deals done that otherwise do not.
Whichever you use, put the phase one in front of your lender early. Lenders have their own environmental policies, and finding out at valuation stage that the security is unacceptable is a late and expensive discovery.
Where this shows up in the game
Housebuilding and development arrive in Business Baron with the Property & Construction Track, an add-on to the full game. Buying land is a negotiation with a seller who has a hidden reserve and a reason for selling, and the reason is not always the one you are told. Paying to find out before you bid is the oldest decision in the trade.