On February 1, 2021, amendments to the Environmental
Management Act (EMA) and associated changes to the
Contaminated Sites Regulation relating to the process for
identifying contaminated sites came into force. A notable amendment
for commercial real estate lawyers is the replacement of the former
“site profile” with a “site disclosure
statement” in the context of a sale or redevelopment of a site
that has been used for a specific industrial/commercial
activity.
Site Disclosure Statements
Fundamentally serving the same purpose as a site profile, a site
disclosure statement is a form that requires information about the
past and present uses of a site to identify the potential
requirement of a site investigation or to disclose past uses that
may have caused land contamination to a prospective purchaser as a
part of due diligence. Unless waived by a purchaser in its
discretion (as permitted pursuant to the Regulation), a vendor of
real property must deliver a site disclosure statement to a
purchaser 30 days prior to completing a conveyance if the vendor
knows or reasonably should know that the property has been used for
a specific industrial or commercial use specified in Schedule 2 of
the Regulation.
The B.C. Government’s Site Remediation website highlights
a
number of changes made to the list of the list of
triggering uses under Schedule 2. Several exemptions have also been
added, including for a property undergoing rezoning where there is
no change to the active Schedule 2 activity or subdivision to bring
about a minor boundary adjustment or lot consolidation. The most
significant differences between the site profile and the site
disclosure statement forms are the additional obligations to
provide a summary of proposed land uses and the information used to
complete the site disclosure statement that apply to land use
operations requiring municipal approval and not to a sale of
property.
Considerations
Contaminated sites pose commercial and financial risks to both
vendors and purchasers of real property, and thorough due diligence
is always advised in a purchase and sale transaction. However,
completing and providing a site disclosure statement involves time,
effort and costs that may not be available and/or worthwhile to the
parties. For this reason, B.C. purchase and sale agreements
commonly contain standard waiver language for properties that have
been subject to the requirement for a vendor to provide a site
profile under the EMA.
The additional uses that trigger the requirement for delivery of
a site disclosure statement by a vendor of real property may make
it more likely that a vendor will want the purchaser to waive this
requirement as part of the closing process. If so, the relevant
changes for commercial real estate practitioners in the context of
purchase and sale agreements that contain site disclosure statement
waiver language are minimal.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
