Blog: Land - a limited supply
New laws relieve land of permanent stigma over contamination, writes Nick Atkins.
We know the quote, “Buy land, they are not making it any more”. As the world’s population increases, then the supply of land in proportion diminishes. Therefore, we need to make the best use of it.
My daughter’s boyfriend is from Texas. He is a good guy. Very tall so he is able to look down on me. He is always chatty and likes a good argument. I very early learnt that my knowledge of history can sometimes get me into deep water. I learnt not to refer to the American Civil War but to the War of Northern Aggression. Okay you ask - where are you going with this?
Let me explain. I started to learn about the geography of Texas. Texas is 10% larger than France. 10% larger means that Texas has a land mass of 696,241 square kilometres and a population of 26.4 million. By contrast, the UK has a land mass of 343,610 square kilometres and a population of 64 million. The mathematicians amongst you will quickly work out that the ratio between population and size means that land in the UK is at more of a premium. We live and breathe in a densely packed island. Making effective use of every square inch is important, not only for this generation, but for generations to come as it is anticipated that, over time, the population of the UK will significantly grow. The UK has been heavily industrialised in the last few centuries. Population masses have been centred on significant areas of economic growth. These industrial uses have significantly affected the land from which those industries operated.
The Environmental Protection Act 1990 introduced the legal concept of contaminated land. Through a number of legal mechanisms, including the planning regime, the aim of the Act was that land which had been used for industrial purposes or other “contaminated uses” be brought back into a state whereby it could effectively be re-used. This is a laudable aim. Land is a precious asset and we do want to see it being used effectively. Since 1990 a number of technologies have grown up centring on the means by which land can be successfully remediated and brought back into re-use, and we at Morton Fraser have been involved in a large number of the major contaminated sites in Scotland.
However, under the 1990 Act, land which was designated as contaminated i.e. requiring that it be remediated to a particular state, would remain as contaminated land forever and a day. This could stigmatise the land. There would always be a concern that such land was not as comparable with other competing land, as there would remain a regulatory concern over it, notwithstanding that it had been successfully remediated. In transacting with such land, lawyers would pore over various environmental reports, clients would be keenly wanting to hear their view on the marketability of the land considering the various reports that were attached to it and as to whether or not further investigation would be required etc. This takes time and money. Conversely, land that has been effectively remediated is probably in a better position than other sites which, whilst not designated as contaminated, would more than likely have an industrial past: which could throw up a number of environmental concerns which may need to be dealt with at some point in time in the future.
Now that I have set out the issues with contaminated sites and designation, let me introduce you to Section 45 of the Regulatory Reform (Scotland) Act 2014. I see this as a positive step forward in trying to ensure that land which has been designated and then effectively remediated is not then subject to the stigma of being “contaminated land”.
Section 45(3) inserts into the Environmental Protection Act 1990 a new section - Section 78C(a) stating that land is no longer considered to be contaminated where:
(a) a Local Authority has given notice under Section 78B that land in its area has been identified as contaminated land;
(b) the land is not designated as a Special Site by virtue of Section 78C(7) or 78D(6); and
(c) the Local Authority is satisfied that the land is no longer contaminated land.
In which case the Local Authority may give a notice to the effect that the land is no longer contaminated land. This would be a situation where the various remediation steps have been worked through and successfully completed .
This does not preclude the site being identified as contaminated land on a subsequent occasion but that would be in respect of a new environmental condition as opposed to the historic environmental condition which will have been dealt with.
With regard to Special Sites to which the Scottish Environmental Protection Agency (SEPA) would be the Authority, the non-contamination notice could also apply. We have recently been successful in dealing with a Special Site and the first de-designation of the site as a Special Site, which then clarifies for all concerned that the issues which relate to contamination on the site have been successfully dealt with.
The benefit of this is that it provides the market with greater levels of certainty that a problem which exists has been successfully dealt with. It only applies to land which has been designated. Therefore it will not be available for much of the land in Scotland which is potentially contaminated and has been voluntarily dealt with either (a) by the developer remediating in accordance with the proposed planning use, or (b) where the parties responsible for the contamination decided on a voluntary course of action to avoid designation. These sites will not benefit from a non contamination notice simply because the land has not been designated in the first place. Nevertheless, this provision is a step forward in providing the market with some level of comfort.
- Nick Atkins is a partner at Morton Fraser. You can view his profile here.