Contaminated land and indemnity insurance.

EC120

Hi All,

I am looking for some advice regarding the issue of buying an indemnity policy to cover possible contaminated land. I will give a brief outline of our current situation...

Currently going through the process of purchasing a victorian semi detached property. Our environmental search has brought up that the land in close proximity to the house has the possibility for contamination. The likelihood is this is due to a historic gasworks in the locality (no longer present).

Our solicitor initially gave us three options, 1) walk away, 2) ask the seller to carry our further investigations with the hope of the land getting the "all clear" or 3) get indemnity insurance.

Our preferred option was to carry out further searches however having spoken to the environmental search company they have advised that the next level search would likely still be inconclusive and even if we were to go the the next stage of having soil samples analysed these would probably show up some contamination as the house is close to a railway line.

Basically we are unlike to ever receive a definitive yes or no as to wether that land is actually contaminated. We have approached the council (anonymously and not in writing so as not to invalidate any future indemnity requests) and they have advised that the local authority currently has in excess of 6000 sites for possible contamination on their list, of which ours is not near the top and they do not foresee any action being taken by them in the near future.

The house is located in the North West where I believe this issue of historic land contamination is quite prevalent due to its largely industrial past.

The neighbouring house was purchased approx. 5 years ago, so I'd assume they faced the same issue. We did approach the current owner in writing about how they dealt with it but they have not responded, perhaps not wanting to get involved in a neighbours house sale which can be understood.

The only way that we can now secure the property (which we love!) is to take out an indemnity police against the land contamination. Based on advise taken so far its seems to be about 50/50 so would really appreciate any guidance.

We don't want to lose a house we love because we are too nervous to take out the policy but we equally don't want our hearts to take over our heads too much....

AdrianC

An indemnity policy doesn't make contaminated land somehow suddenly clean. It doesn't mean that, when you come to sell, another buyer won't be just as wobbly as you're being now.

It just means that some insurer somewhere'll pay for the legals if you find it is contaminated somewhere down the line. Always assuming you can find the paperwork and it doesn't fall under a big long list of get-out clauses.

People have been living in that house, and all the surrounding ones, for 120+ years. How many of them have three heads?

DaisyBrown

We had a contaminated land report but I looked closely it said that the 1936 survey suggests there may have been something in the area that could contaminate the land. No one has tested the land and since 1936 hundrea

DaisyBrown

Sorry - hundreds of houses have been built in the area. We went for an indemnity policy.

stator

Take out the indemnity policy. These companies flag up so many 'possible contamination' locations in a city that it's really not unusual. The chances of there being serious problems with your land are very slim.

EC120

Thanks Adrian. As you say, the indemnity policy obviously doesn't make the land clean but it does address some issues. I guess our main concerns are...
1. Future costs should we be required to clean up - this would be covered, providing we read the small print etc
2. Health concerns, as you say people been living there without growing extra heads so realistically I'm not overly concerned about this aspect.
3. Future saleability. As you point out we are being wobbly but I think we'd have been less concerned if when the issue first presented itself the current owner were already aware of the issue and was in possession of an indemnity. If we were to go ahead, if/when we came to sell we would be able to pass on our experience and it would feel slightly less like unknown territory for the property. Possibly.

Rambosmum

Depends what it is. Our friends had a similar issue - the house backed on to an office block which 50+ years ago had been a tobacco factory. They didn't even bother with an indemnity policy. It's unlikely to ever be an issue if the area is well populated.

Atomix

EC120 wrote: »

2. Health concerns, as you say people been living there without growing extra heads so realistically I'm not overly concerned about this aspect.

Insurance won't be any use to you if you get cancer though?
Or can't sell the house-on in future...
http://www.landmarkinfo.co.uk/corp/graphics/corp2/case_2.pdf

There are so many cases up and down the country relating to old gasworks / and cancer, its frightening. We turned down a property (over 10 years ago) after we received the environmental report (which is an added expense, that some people don't bother with). You'd never know anything was there before.

Not worth the risk imho. (other examples like a cigarette factory etc are NOTHING compared to an old gasworks - trust me. The soil samples might be off the scale for all you know - Horrible, horrible carcinogenic chemicals used in gasworks:

table example:
http://www.contaminatedland.co.uk/std-guid/kelly-l.htm

sorry - not worth your health I'm afraid.

Atomix

x2 mins on bbc / google enough said...

http://www.expressandstar.com/news/local-news/2015/05/08/willenhall-residents-vow-to-take-legal-action-over-former-gas-works/

http://www.liverpoolecho.co.uk/news/liverpool-news/calls-probe-fears-over-health-4881335

http://www.bbc.co.uk/news/uk-england-surrey-11375915

http://news.bbc.co.uk/1/hi/scotland/4426260.stm

http://news.bbc.co.uk/1/hi/england/cambridgeshire/6171884.stm

http://news.bbc.co.uk/1/hi/scotland/south_of_scotland/7281840.stm

Atomix

Just to add, this 60 year old grandmother had lived there since 1982! and she and some neighbours sadly have got cancer - )So the neighbour living there for 5 years who doesn't have x3 heads means nothing)...

The 60-year-old grandmother-of-three, who has lived in Kemble Close since 1982, said: “We are all so angry. We want someone to be held accountable. It’s frustrating that it has still not been resolved after this long. “We are now taking legal action. It is in the hands of the solicitors. The priority is to get it cleaned up.” She also blames the contamination for some residents of the estate, including herself, being diagnosed with cancer in recent years.

Heavy metals, tars and a gas-manufacturing by-product known as Blue Billy were found in the soil at the former gasworks site.

It shut down in the 1960s and the homes were built shortly after. It was declared as contaminated land in 2012.

Atomix

EC120 wrote: »

Our solicitor initially gave us three options, 1) walk away, 2) run away 3) sprint.

option 3 applies here. Plenty of houses out there that aren't built on former gasworks.