Top 5 Environmental Risks That Derail Property Deals (and How to Manage Them Early)
Introduction
Environmental issues rarely stop a deal on their own. What does stop deals is uncertainty, cost escalation and time delays. Based on our experience undertaking due diligence assessments for commercial, industrial and redevelopment sites, the following 5 issues are the most common causes of deal disruption.
1. Uncontrolled Fill and Unknown Site History
Sites with a history of filling, particularly where the source is unknown, present a high level of uncertainty.
Why it matters:
Fill may contain contaminants, asbestos or waste materials
Waste classification requirements can significantly increase disposal costs
Imported material may not meet site criteria
How to manage it:
Confirm fill origin and supporting documentation early
Undertake targeted intrusive investigations where required
Align sampling with NSW EPA Waste Classification Guidelines
2. Asbestos in Soil (Often Unexpected)
Asbestos in fill is one of the most common and disruptive findings during construction.
Why it matters:
Immediate work stoppages under WHS requirements
Reclassification of stockpiles to Special Waste (asbestos)
Increased disposal costs and programme delays
How to manage it:
Include asbestos in all soil investigation scopes where fill is present
Implement an Unexpected Finds Protocol (UFP) prior to earthworks
Train site personnel to recognise suspect materials
3. Underground Petroleum Storage Systems (UPSS)
Legacy or active fuel systems are a frequent source of soil and groundwater contamination.
Why it matters:
Hydrocarbon impacts can extend beyond the tank footprint
Regulatory obligations apply under the NSW UPSS Regulation
Remediation and validation can delay development approvals
How to manage it:
Confirm presence and status of UPSS early in due diligence
Review monitoring and compliance records
Allow for removal, validation and potential remediation
4. Groundwater Contamination
Groundwater impacts are often overlooked during early-stage due diligence.
Why it matters:
Can trigger long-term monitoring obligations
May affect development feasibility (e.g. basement excavation)
Offsite migration risk can introduce third-party liability
How to manage it:
Assess groundwater where there is a credible source-pathway-receptor linkage
Interpret results in the context of site use and exposure pathways
Focus on risk, not just exceedances
5. Poor Quality or Incomplete Environmental Reports
Not all environmental reports are equal. Low-cost or rushed assessments often miss key risks.
Why it matters:
Unknown risks surface later during construction
Costs increase significantly once works are underway
Delays impact programme and financing
How to manage it:
Engage consultants with relevant project experience
Ensure scope aligns with proposed land use and development
Focus on risk identification, not just compliance
Conclusion
Environmental risks are manageable when identified early. The key is not eliminating risk entirely but understanding it well enough to make informed commercial decisions. Early, targeted due diligence will almost always reduce overall project cost and risk.
Early advice can make the difference between a manageable issue and a project delay — reach out if you’d like to discuss your site.
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