P-Labs & LIM Reports - Purchasing a Property
The Relationship Between Land Information Memoranda and Contamination as a Result of Illegal Drug Manufacture/Use
We recommend to clients intending to purchase a property to obtain a Land Information Memorandum (LIM) from the relevant local authority. This report may contain references to:
1. The presence of hazardous contaminants; and/or
2. Records of Cleansing and Repair Orders issued.
In respect of the premises, the Local Authority must declare any current or past information indicating that the property has been used as a P lab in the LIM report they issue. They must also state if there is a real or substantial risk of contamination. It is now accepted P Labs affect not only the dwelling, but eventually the soil surrounding the dwelling, and this can result in vegetation damage.
Any information contained in the LIM report which indicates contamination through use as a P lab or similar may not enable the purchaser to cancel the Agreement. We would also recommend a due diligence clause be inserted in an Agreement to ensure there is a clear route for cancellation should the LIM disclose information which is detrimental to the condition/value of the property.
When viewing a property, a prospective purchaser should look for:
(I) Evidence of use of the property for cultivation of cannabis (hydroponics): e.g. inspect roof cavity, basement, and cupboards for venting systems, broken fluorescent light bulbs, evidence of bulb packaging, blacked out windows, excessive tinfoil, soil/plant food/ nutrients, surveillance equipment, high water usage, and/or chemicals stored around the house; and
(II) Evidence of use of the property as a P lab: e.g. chemical odours (mainly solvents), chemical containers, expensive security and surveillance equipment, issues with access being denied to landlords, neighbours and/or real estate agents, blacked out windows, containers with labels removed, burn pits, stained soil, dead vegetation, and/or discarded packaging.
If evidence is found of contamination, individuals should leave the area immediately and avoid contact with any chemicals or equipment located on the property. All electrical devices should be left untouched as a simple act of turning on an electrical switch may cause a reaction with any chemicals located on the premises, including combustion.
The costs of decontamination can be significant and therefore if a potential purchaser intends to proceed with the property purchase they should, before declaring the agreement unconditional, obtain a quote in relation to the decontamination costs.
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