What should an environmental condition clause in an offer include?

An environmental condition makes the buyer’s duty to close depend on the site passing an environmental review. It protects the buyer only as far as it is specific. A clause that says only that the site must be in “satisfactory” condition leaves open what that word means. The sections below cover what to write instead. Contaminated-site rules differ by province (this page cites Ontario, Newfoundland and Labrador, New Brunswick and Saskatchewan), so use this as a drafting checklist and have a lawyer adapt it to your province.

Name the review

Say which assessment is to be done. A phase one environmental site assessment, as Ontario’s guidance on records of site condition describes it, includes a table of the current and past uses of the property. Say whether a phase two follows if the first review raises a concern. Say who chooses and pays the consultant, and make the seller give the consultant access to the site and to any reports it already holds.

Add a records search

Check whether your province will search its own files. Newfoundland and Labrador’s Impacted Sites Management Section searches Department files for property owners and purchasers and their environmental consultants, lawyers and realtors. If your province offers a search, make it part of the condition. Also ask the seller for any earlier reports. See what environmental checks you need for the checks themselves.

Check who has to assess

Some provincial programs assign assessment duties to a responsible party. New Brunswick’s program says the responsible party must engage a site professional to plan, implement and oversee an assessment. Saskatchewan’s guidance covers who is responsible, and its Environmental Code has a chapter on transfer of responsibility for an environmentally impacted site. Before you agree who commissions the work, ask your lawyer who that party would be on your site.

Set the deadline and the outcomes

Fix the date by which the review must be finished and the condition satisfied or waived. Define what an unsatisfactory result is, for example a finding that needs further assessment or corrective action. Then say what the buyer may do: end the agreement, renegotiate, or require the seller to act before closing. Tie it to the rest of the contract using the purchase agreement explained.