Are You at Risk Where a Tenant Breaches its Environmental Permit?

Are You at Risk Where a Tenant Breaches its Environmental Permit?

Published:

Author: Sophie Wilkinson

Landlords could be at risk of significant liability where tenants operate environmental permits on site.

We have seen a number of cases where tenants operating waste processes on site under environmental permits have gone into administration or got into financial difficulty. Often the tenants are in breach of the terms of their environmental permit and have been for some time. Sites have been left piled with waste.

As landlord you could face the following liabilities:

  • liability for "knowingly permitting" the deposit of waste (potentially an unlimited fine and up to 5 years in prison)
  • liability for meeting the costs of removing the waste (if liable as "knowing permitter" or if the occupier cannot be found)
  • nuisance and negligence claims from neighbouring properties
  • liability for causing a public nuisance

In addition it will be difficult to re-let the land or release any development value until the site has been cleared.

The cost of removing bales of waste from site can mount up, in some cases to millions of pounds!

What can landlords do to protect themselves?

  • carry out due diligence on potential tenants
  • ensure that there are suitable provisions in the lease, including obligations to provide copies of environmental permits, to comply with environmental law and to provide copies of any environmental notices served
  • visit the site regularly and take action early if issues arise
  • enter dialogue with the tenant and the Environment Agency as soon as an issue arises

What issues Should Administrators Consider?

Administrators will need to consider:

  • whether there is a requirement to inform the regulator of the administration
  • whether the permits need to be transferred or surrendered
  • who is responsible for complying with permit conditions as "operator"
  • whether appointment could result in personal liability

Early dialogue with the Environment Agency is advisable.