Does a business that owns its land need an environmental assessment?

Leasing versus owning the ground a business sits on is a real distinction here, not a technicality. When a business owns the dirt itself, the environmental question becomes a real property question with its own liability, separate from anything a lease could ever create.

Ownership carries liability leasing usually avoids

A tenant’s environmental exposure is generally tied to what happened during their own tenancy. An owner can be on the hook for contamination that predates their ownership entirely, because provincial legislation commonly ties liability to the land itself and its current registered owner rather than only to whoever originally caused the problem.

Why the seller may want to commission the assessment first

Waiting for a buyer’s lender to require a Phase I late in the process risks surfacing a problem after a deal is already priced and under a tight closing timeline. A seller who commissions an assessment proactively, before listing, controls the timing and can address or disclose findings on their own terms rather than the buyer’s.

A clean Phase I doesn’t end the conversation

If a Phase I identifies a potential concern — a historical dry-cleaning operation, fuel handling, an old underground tank — it typically leads to a Phase II involving actual sampling, which takes longer and costs more. A seller should expect this possibility for any site with an industrial or fuel-handling history, regardless of what currently operates there.

Contamination found doesn’t have to kill the deal

It usually changes the deal instead, through a price adjustment, an escrow holdback pending remediation, or a seller indemnity that survives closing specifically for environmental matters. Structuring around a known issue is common, and generally a better outcome for both sides than a deal collapsing once a Phase I result is disclosed.