HAIL sites and contaminated land: what a commercial or industrial buyer needs to check
A HAIL site is land on which an activity or industry on the Ministry for the Environment's Hazardous Activities and Industries List is being carried out, has been carried out, or is more likely than not to have been carried out. Being identified as a HAIL site does not prove the land is contaminated. What it does is bring the national contaminated-soil regulations into play, so that disturbing the soil, subdividing the land, removing a fuel storage system or changing the land's use can need a resource consent and a site investigation. Check the council's contamination record and the site's history during due diligence, not after settlement.
What the HAIL is, and where the list lives
The Hazardous Activities and Industries List is published by the Ministry for the Environment. The Resource Management (National Environmental Standard for Assessing and Managing Contaminants in Soil to Protect Human Health) Regulations 2011, usually shortened to the NES-CS, define HAIL simply as the current edition of that list. It is incorporated by reference, so the Ministry can revise it without the regulations changing; read the current edition on the Ministry's own site.
What the NES-CS actually triggers
The NES-CS came into force on 1 January 2012. On land with a HAIL history, five activities bring the regulations into play:
removing or replacing a fuel storage system
sampling the soil
disturbing the soil
subdividing the land
changing the use of the land to a use that is reasonably likely to harm human health given the land's history
For a buyer, the last three matter most. A new hardstand, an extension, a subdivision or a change from workshop to offices can each need a resource consent under the NES-CS, with a site investigation behind it. The regulations also provide an exit: land comes out of the NES-CS where a detailed site investigation shows contaminants at or below background concentrations. A HAIL history is a question to answer, not automatically a reason to walk away.
PSI and DSI are defined terms
Two reports come up in this area, and both are defined in the regulations:
A preliminary site investigation (PSI) must be done by a suitably qualified and experienced practitioner, reported in accordance with the Ministry's Contaminated Land Management Guidelines No. 1, and certified by the practitioner. It is largely a records and history exercise.
A detailed site investigation (DSI) must additionally follow Contaminated Land Management Guidelines No. 5 on site investigation and analysis of soils. This is the report with sampling and laboratory results behind it, and the one that can take land out of the NES-CS.
If a vendor or agent offers you a "contamination report", ask which of these it is, who prepared it, whether it is certified, and how old it is. We could not find a published figure for what a PSI or DSI costs or how long each takes; in practice the PSI is the quicker and cheaper of the two. Get a quote and a timeframe before you rely on either fitting inside your due diligence period. Our note on the due diligence period for commercial property sets out what does and does not fit in a typical 10 to 15 working days.
How to check whether a property is a HAIL site
The council contamination record. Auckland Council sells a site contamination enquiry report covering council-held information on potentially contaminating activities on or near the site, including known or potential HAIL activities, consents and incidents such as spills, bores and closed landfills, normally within 200 m of the site. It costs $204 standard with a 10 working day turnaround, or $304 urgent in three working days. Other councils hold their own records under their own names; ask what they hold.
The LIM. A LIM must include the likely presence of hazardous contaminants known to the council where that is not apparent from the district plan. A clean LIM on this point means the council has recorded nothing, not that nothing happened.
Historical aerial photography. Auckland Council itself recommends checking historical aerials through GeoMaps and Retrolens when assessing past site use.
The property file and the site itself. Old consents and correspondence in the property file can point to past activities the listing does not mention, and fill, vent pipes, bunded areas or disused tanks on site are worth asking about.
Our hub on commercial property due diligence in NZ shows where the contamination check sits alongside the title, LIM, zoning and building checks.
What a HAIL history means for the purchase
A HAIL history does not itself put a cost on the land. The cost arrives when you want to do one of the trigger activities. For an owner-occupier keeping an existing building in its existing use, the immediate effect may be small. For a buyer planning earthworks, an extension, a subdivision or a change of use, the cost is a PSI at minimum, possibly a DSI, and possibly a resource consent and remediation before the project can start. That belongs in your price and your programme. Found later, the same problem surfaces as a claim for unforeseen ground conditions on the construction contract.
What the vendor and the agent have to tell you
We could not find a general statutory duty on a private vendor to volunteer contamination information. The protections that exist are narrower:
The standard ADLS/REINZ agreement (now published with The Law Association of New Zealand, TLANZ) carries a vendor warranty at clause 7.1 that there are no undisclosed notices, demands or requisitions from any authority or under the RMA, and at clause 7.2 that the vendor knows of no facts that might lead to proceedings.
A licensed real estate agent must not withhold information that should by law or in fairness be provided, must disclose known defects, and, where hidden defects appear likely, must either obtain evidence-backed confirmation from the vendor that there are none or ensure you are told of the risk so you can get expert advice.
The LIM must record the likely presence of hazardous contaminants known to the council.
None of those makes anyone investigate for you. The records check and any PSI are the buyer's job.
What this doesn't tell you
This is a records check. It cannot tell you whether the soil is contaminated; only a site investigation with sampling can.
We could not read the current edition of the HAIL for this article and have not listed its categories. Read the list on the Ministry for the Environment's site directly.
Whether the NES-CS has been amended or is under review is not something we could confirm; check the current regulations before relying on a clause.
The fees and turnaround above are Auckland Council's; other councils hold different records at different prices.
FAQ
What is a HAIL site in NZ?
Land on which an activity or industry on the Ministry for the Environment's Hazardous Activities and Industries List is being carried out, has been carried out, or is more likely than not to have been carried out. The list is incorporated by reference into the contaminated-soil regulations, so it can change without the regulations changing.
How do I check whether a property is a HAIL site?
Ask the council for its contamination record; in Auckland that is a site contamination enquiry report at $204 standard or $304 urgent. Also read the LIM, which must note hazardous contaminants known to the council, and check historical aerials and the property file for past uses.
Does a HAIL listing mean the land is contaminated?
No. It means a listed activity has been, is, or is more likely than not to have been carried out there, which brings the NES-CS into play for soil disturbance, subdivision and a change of use. Only a site investigation with sampling can tell you whether contaminants are present.
What does a preliminary site investigation (PSI) cost and how long does it take?
We could not find a reliable published figure for either. A PSI is a records-based report by a suitably qualified and experienced practitioner, so in practice it is quicker and cheaper than a detailed site investigation, which involves sampling and laboratory analysis. Get a quote and a timeframe before you commit to a due diligence date.
Will a bank lend on a HAIL site?
We could not verify any lender's policy. In practice a lender may ask for a site investigation or attach conditions where land has a HAIL history, so raise it with your lender early rather than at the finance date.
Is the vendor required to disclose contamination?
We could not find a general statutory duty on a private vendor to volunteer it. The standard agreement includes a vendor warranty that there are no undisclosed notices or requisitions from any authority, a licensed agent must disclose known defects and warn of likely hidden ones, and the LIM must record contaminants known to the council. Beyond that, finding out is the buyer's job.
Send us the listing and the LIM
If you are looking at industrial or commercial land and want to know what the council records, the LIM and the site history say, send them through and we will tell you in writing what the records show and whether a contaminated-land practitioner needs to look. Independent analyst, not a valuer, engineer, surveyor, building inspector or lawyer.
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