The prudent acquisition of a building or land requires that certain important steps be completed, such as due diligence on the property, including title deeds, leases and other contracts relating to the building. An important element of this due diligence, particularly in the case of commercial or industrial property transactions, is the environmental assessment of the land. In cases where the property being sold is used for commercial or industrial purposes, and the prospective buyer wishes to change the intended category of use, this environmental assessment of the land or building could then become more than just an option. The Environment Quality Act (” EQA “) stipulates that :
Anyone planning to change the use of land on which an industrial or commercial activity belonging to one of the categories designated by government regulation has been carried out must first conduct a characterization study of the land, unless he or she already has such a study and a certificate from an expert referred to in section 31.65 establishing that the study meets the requirements of the guide prepared by the Minister under section 31.66 and that its content is still current.
[…]
A change of use of land within the meaning of the present article is the carrying on of an activity different from that previously carried on, whether it be a new industrial or commercial activity belonging to one of the categories designated by government regulation, or any other activity, notably of an industrial, commercial, institutional, agricultural or residential nature.[1].
Examples include a developer who acquires land on which a service station used to operate for a residential development project, or a future tenant who wants to lease part of a building for commercial or industrial activities other than those previously carried out there. The person or entity wishing to proceed with such a change of use must first obtain a land characterization study, if the said commercial or industrial use is included in the list of uses provided for in the Règlement sur la protection et la réhabilitation des terrains (the ” Règlement “). [2]. Once the study has been completed, it must be sent to the Minister of Sustainable Development, Environment and Parks (the ” Minister “), along with an attestation from an expert authorized to issue such attestations[3]. If the tenant or future purchaser has requested the study, it must also be submitted to the building owner. If the characterization study reveals the presence of contaminants in concentrations exceeding regulatory limits[4], a site rehabilitation plan must be submitted to the Minister for approval. Among other things, this plan must set out the measures to be implemented to protect the quality of the environment and avoid harm to human life, health, safety, well-being or comfort, ecosystems, living species or property, as well as the measures intended to make the proposed use compatible with the condition of the land, include an implementation schedule and, where applicable, a plan for dismantling installations on the land.[5]. Only once the plan has been approved by the Minister can the change of use take place. The obligation to obtain a characterization study is qualified, however, in cases where, for example, the future buyer or lessee has previously required such a study from the landowner under the terms of the offer to purchase or lease. If such a study is already in place, and if an expert certifies that it meets the requirements of the Guide d’intervention – Protection des sols et réhabilitation des terrains contaminés, and that its content is still current, a new characterization study will not be required. This is why it is important for the future buyer to take this study into account when drafting an offer to purchase. In conclusion, it is important to emphasize that failure to comply with the provisions of the LQE relating to the obligation to carry out a site characterization study and, where applicable, a rehabilitation plan, can result in significant penalties, such as fines and, in more serious cases, imprisonment.
[1] Article 31.53 LQE [2] Appendix III of the Règlement sur la protection et la réhabilitation des terrains (chapter Q-2, r.37). [ 3] The list of qualified experts can be found on the website of the Ministère de l’Environnement et de la Lutte contre les changements climatiques: Experts habilités à délivrer des attestations (gouv.qc.ca). [ 4] The list of limit values can be found in Appendix I and Appendix 2 of the Regulation. [ 5] Section 31.54 LQE