A landowner agrees terms for the sale of a former agricultural holding. The parties are aligned on price, funding is in place and completion appears straightforward. Then the buyer’s environmental consultant raises a question: was part of the land once used for firefighting training, waste disposal or industrial activity?
Further investigation follows. Soil and groundwater testing is commissioned. The reports identify the presence of a strange-sounding substance called ‘PFAS’.
Suddenly, what appeared to be a routine transaction becomes an environmental risk management exercise involving consultants, lawyers, insurers and lenders. This scenario is increasingly common as awareness of PFAS grows, and these previously unheard of substances are becoming an important consideration for anyone owning, developing or transacting land.
PFAS is an acronym for perfluoroalkyl substances. They are a large family of synthetic chemicals which have been used for decades in products ranging from agricultural pesticides, firefighting foams and industrial processes to product packaging and non-stick cookware.
Their attraction lay in their resistance to heat, water and grease. Unfortunately, those same characteristics make them remarkably persistent once they enter the environment. Many PFAS compounds do not readily break down and can remain in soil, groundwater and surface water for decades, often migrating significant distances from the location where they were originally released. This persistence has earned them the nickname “forever chemicals”.
The concern is not that every site containing PFAS presents an immediate environmental problem. Rather, it is that these substances can be difficult and expensive to remediate, while scientific understanding and regulatory expectations continue to evolve. For landowners, the greatest challenge is often uncertainty rather than contamination itself.
A landowner may first encounter PFAS issues during contaminated land due diligence when selling or mortgaging their land. Environmental searches may identify a historic high-risk use, such as firefighting activities, prompting consultants to recommend PFAS sampling. What starts as a routine environmental review can quickly develop into a detailed investigation of soil and groundwater conditions.
Sites linked to airports, military facilities, waste operations, chemical manufacturing and metal treatment are often considered higher risk, although PFAS contamination is by no means limited to these uses and may arise in an agricultural setting from activities such as the storage and use of pesticides and organic waste fertilisers.
The first task is to understand the nature and extent of any risk.
As with any contaminated land issue, the starting point is a review of historic land use and, where necessary, environmental investigations. In England and Wales, PFAS risks must be considered through the lens of Part 2A of the Environmental Protection Act 1990. For further details see our previous article: Contaminated land: from an agricultural landowner’s perspective.
As with any contaminated land issue, the starting point is a review of historic land use and, where necessary, environmental investigations. In England and Wales, PFAS risks must be considered through the lens of Part 2A of the Environmental Protection Act 1990. For further details see our previous article Contaminated land: from an agricultural landowner’s perspective.
The key question is whether a complete contaminant linkage exists: a source, a pathway and a receptor. The mere presence of PFAS does not automatically create liability; expert assessment is required to determine whether there is a risk of harm or pollution.
Where risks are identified, the appropriate response will depend on the circumstances. While some risks can be managed through further investigation and ongoing monitoring, others may require remediation. Given the complexity and cost of PFAS remediation, the focus is increasingly on proportionate and defensible risk management rather than eliminating all traces of contamination.
As awareness of PFAS has increased, so too has the importance of environmental insurance. Environmental insurance cannot remove contamination from a site, but it can help manage the financial consequences of unexpected liabilities, regulatory intervention and third-party claims. For that reason, insurance is becoming an increasingly valuable tool in transactions involving known or suspected contamination risks.
However, insurers are understandably cautious. PFAS is as new to them as it is to the rest of us. The availability of cover will often depend on the quality of environmental investigations, the extent of known contamination and the disclosures made to underwriters.
PFAS is also influencing the way property transactions are negotiated. Buyers may be concerned about future environmental liabilities. Sellers may be reluctant to retain open-ended obligations. Lenders often seek additional comfort before advancing funds. As a result, environmental due diligence, contractual risk allocation and pollution legal liability insurance are playing a greater role than ever before.
Prudent landowners should resist taking comfort solely from the absence of current regulatory action. PFAS contamination can be remarkably persistent, scientific understanding continues to develop and regulatory scrutiny is increasing.
The lesson is a simple one. Landowners who identify potential PFAS risks early, investigate them proportionately, explore remediation and insurance options where appropriate and address the issue openly within transactions are likely to find themselves in a much stronger position than those who wait for a problem to emerge.
Investigating, mitigating and insuring against PFAS risks can take months rather than weeks, potentially delaying land sales, lettings and funding arrangements. Landowners should therefore consider potential risks well in advance of any transaction.
