Contaminated Sites:  The ‘Get Out of Jail Free’ card for Innocent Landlords

In BC, owners of contaminated land are magnets for liability. If your site is found to be dirty, all eyes are on you. This is because current owners are specifically named in the Environmental Management Act (The Act) as ‘responsible persons’ where their land is contaminated. This is a title nobody wants because both civil and regulatory exposure attach to responsible persons. Fortunately, not all owners are created equal. 

Some owners, such as landlords who are victims of their tenants’ polluting activities, are exempt from responsible person status and the joint and several liability that comes with it. The Act provides lessors with this lifeline through section 46(1)(e), where an exemption is triggered if the site at time of purchase was not contaminated, and the owner doesn’t go on to contaminate it. This holds true unless the owner knew or ought to have known that a tenant would use the land in a way that would cause contamination (see Contaminated Sites Regulation). This means that to be exempt as an innocent owner or lessor one really has to be innocent, and allowing a tenant to pollute your land or being willfully blind to it simply won’t cut it. To enjoy the exemption, you will have to take a couple of steps to protect yourself, at the very least. 

The first step is trying to determine what a tenant will do on-site. If a tenant’s operation is environmentally risky, as lessor you may attract liability under the Act. However, whether you obtain sufficient information about the tenant’s operation or not, the second step is to use your lease document to prohibit ‘uses’ that may cause contamination. Couple this language with a lease term making the tenant responsible for all contamination that occurs during their tenure. Sounds simple, but the standard ‘keep the premesis clean’ clause may not be sufficient to protect you. 

In short, make it clear what the tenant can use the land for, what you can do if the tenant uses it for something else, and who is responsible if the tenant pollutes the place. Most tenants understand it’s a no-no, so they should agree in writing, and this is one of the best ways to protect yourself as a landlord.   If you find that your site is contaminated, we would be happy to help you utilize the lessor exemption, and craft a lease paragraph that protects you from a potentially polluting tenant.