Focus on Manufacturing | Irwin Mitchell | An Update on Real Estate

Irwin Mitchell’s Real Estate team has broad expertise in advising manufacturers and industrials on a wide range of property related issues, including acquisitions and disposals, landlord and tenant and environmental and planning.

Irwin Mitchell recently advised White Label Co on the disposal of a 50-acre brownfield site in South Yorkshire which was surplus to the company’s requirements. The site had previously been used for heavy industry and was as a result, potentially contaminated under the Environmental Protection Act 1990. There were a number of interested purchasers and Irwin Mitchell was required to move swiftly to secure the interest of the preferred bidder by way of lock-out agreement. A number of previous environmental reports and surveys were supplied to the purchaser as part of their due diligence process. Given the sensitive nature of the information deduced, our client was advised to enter into a confidentiality agreement with the purchaser that would enable our client to control the flow of information. This process was carefully managed, so as to balance the interests of our client with the need to allow the purchaser to share information appropriately within its own corporate structure and with its professional advisers.

The agreement was also dove-tailed with a licence that would permit the purchaser to undertake their own site investigations.

Our client was conscious to keep these investigations tightly managed, bearing in mind the potential for further contamination arising from the drilling and sampling that was required by the purchaser. The site investigation licence was therefore an important document in the context of the wider transaction and many of the principles agreed at that stage would transfer to the sale contract.

A key element of the transaction was the extent to which liability for the risk and cost of potential remediation could be apportioned between the parties and, insofar as possible, the weight of responsibility shifted to the purchaser. The sale contract would document this agreement and it was keenly negotiated as a result. Appropriate warranties and indemnities from the purchaser were agreed and obligations secured by way of parent company guarantees. Throughout this process, the property team worked closely with Irwin Mitchell’s environmental and planning law experts to ensure that the agreement provided as much contractual protection for our client as possible, whilst keeping the client appraised of the risk that would remain with them as ‘appropriate persons’ under the relevant legislation.

Key Contact

David Goy