Purchasing real estate is a serious task and requires particular attention before the transaction occurs. This often includes thorough research into the property’s history and the identification of “hidden pitfalls” that could prove costly for the new owner — both literally and figuratively.
Such research involves standard checks, such as tracing the chain of ownership, verifying for any encumbrances on the property, and checking for the presence (or absence) of restitution claims and/or state property acts issued for the property. However, in our practice, we have come across exceptions to the rule and risks that can very easily remain outside the scope of this standardized examination. This brief article highlights one such case.
The Situation
The plaintiff in the case is a company that acquired ownership of a plot of land as a result of the liquidation of the assets of a bankrupt company. At the time of acquisition, there were 35 containers of hazardous waste located on the property.
What Steps Does the New Owner Take?
Upon discovering that hazardous waste was present on the newly acquired land — although not completely restricting the use of the land — the new owner made every effort to have it removed. Naturally, the owner aimed to do this without bearing the financial burden, since disposal involves significant costs due to the nature of the waste and the specific requirements for its handling.
Attempts to resolve the issue out of court were unsuccessful — the Regional Inspectorate of the Environmental Agency refused assistance and referred the owner to the municipality where the property is located. However, the municipality also failed to take appropriate action. The owner then decided to file a lawsuit against the municipality, seeking compensation for being deprived of the use of part of the property.
The Outcome of the Case
The facts of the case revealed that the waste was most likely caused by a previous owner. Due to a change in the legal framework, the responsible party for managing and disposing of the waste became the “holder” of the waste — in other words, the owner of the property where it is located.
The plaintiff failed to prove that the waste had been handed over for management or disposal to the municipality in any way. As a result, the claim was fully rejected.
How to Avoid Such Situations
Current regulations state that the costs for handling hazardous waste fall on the original polluter or the current or previous holder of the waste. This means that, in the discussed case, the only way out is proving the identity of the original polluter. If this cannot be done, responsibility falls on the current holder of the waste, which — unless third-party possession is proven — means the landowner. The owner’s lack of knowledge about the presence of waste on the property is irrelevant.
Avoiding such situations cannot be achieved through a standard checklist for verifying ownership and risks, as this is an exception to the norm. This type of “hidden pitfall” can only be avoided through thorough investigation by experienced professionals — such as the team at Ilieva, Voutcheva & Co. Law Firm.
The article above is for information purposes only. It is not (binding) legal advice. For a thorough understanding of the subjects covered and prior acting on any issue discussed we kindly recommend Readers consult Ilieva, Voutcheva & Co. Law Firm attorneys at law.
