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The recent case of Stone and Salhouse Norwich Ltd v Environment Agency  EWHC 994 has highlighted the importance of knowing your tenant, its operation and what they use the land for.
In the above case the landowner lost his appeal against a criminal conviction for allowing an unauthorised waste operation on its land.
The liability to you as Commercial Landlord remains even after the Tenant has ceased to occupy the land and therefore Commercial Landlords need to be mindful of the risks and consider how their exposure can be minimised.
In the case of Stone Norwich Limited (Stone), Stone leased to a business who recycled mattresses. The Tenant carried out such activity without permits or waste exemptions and in August 2015 was served with an enforcement notice by the Environmental Agency. The Tenant ignored the enforcement notice and stopped trading, leaving mattresses in excess of 20,000 at the site.
The Landlord liaised with the Environmental Agency and proposed a schedule of remediation but this was rejected. The Environmental Agency charged the Landlord with the offence on the basis it knowingly permitted the storage of waste without the requisite permits. One of the directors of the company Landlord was also convicted in his personal capacity.
On appeal, the High Court upheld the convictions and found that Landlord and the director were guilty because:
- the continued presence of the mattresses on the land after the tenant abandoned them amounted to a waste storage operation; and
- they had known that the mattresses were present on the land, but had failed to ensure their removal.
It is evident that it was not necessary to prove intention and that knowledge was sufficient for the conviction. This is worrying for Commercial Landlords and highlights the steps that need to be taken when a Tenant vacates particular once the Commercial Landlord are aware of the presence of such waste, if they do nothing to remove it.
Before allowing a third party occupier on any site, a Commercial Landlord should carry out sufficient due diligence on the occupier’s business and whether it involves waste. Evidence should be obtained if the answer is yes as to what permits have been obtained/ are required and what the financial status of the occupier is. Does the Commercial Landlord owner have sufficient protection to avoid the occupier from side stepping liability by ceasing to trade?
Dina Parmar is an experienced Commercial Property solicitor at Band Hatton Button LLP and would be happy to assist with any enquiries or concerns. Any issues can be prevented or mitigated with the correct legal advice and support from the outset of the transaction.