PDF version: Fraud and Concealment of Contaminated Land: Do Your Due Diligence, Purchaser
Cases considered: Motkoski Holdings Ltd. v. Yellowhead (County), 2008 ABQB 454 (Q.B.), Motkoski Holdings Ltd. v. Yellowhead (County), 2010 ABCA 72 (C.A.)
As both environmental standards and the demand for strategically located land increase, there is a greater likelihood that contaminated land will come on the market. What is clear from the case of Motkoski Holdings Ltd. v. Yellowhead (County) is that the burden of thoroughly investigating a site remains firmly on the purchaser’s shoulders, despite the sometimes inequitable difference in bargaining power between a vendor and a purchaser. Standard real estate contractual terms will often transfer land “as is” and exclude representations and warranties outside the four corners of the contract as well as exclude any collateral agreements. A contractual term that excludes any warranty as to the soil conditions, particularly in light of an engineering report that recommends further investigation, should put the purchaser on notice that further investigation may be necessary. If there are any concerns raised from preliminary investigation of the site, the purchaser neglects to follow up or investigate at its own peril.