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Peter Rogozik Property Consulting

It pays to check the dirt

I received a call from a client asking me to evaluate and negotiate a block of land in country Victoria. It seemed a straightforward enough assignment. My client’s end goal was to build a home on the property.

The owner was selling the land directly so I organised a chat over a cup of coffee. As you would expect, during our conversation the owner was pointing out all the attributes of the block of land.

However, the property had a deep, dark secret that the owner knew about but did not disclose during our meeting, nor in subsequent discussions.

It came to light that the land was previously owned by the local council and was once used as a refuelling station. There were underground storage tanks, which had leaked.

The owners had been granted a planning permit by the local council to build a home, but permission was subject to a certificate of audit being granted by the Environment Protection Authority.

This was the only clue that the site may have been contaminated. Astoundingly, the council had not placed an environmental audit overlay on the land.

As the current owners had fallen victim to purchasing land that was contaminated, there was a high probability a subsequent buyer would unwittingly purchase the site. It was another disaster waiting to happen.

The cost to merely assess the site was going be at least $60,000. It was highly likely the clean-up bill would have been greater than the value of the land. The current owners were always aware of these facts, but during our discussions did not disclose any information about the site’s contamination.

Before finalising a land purchase, a geotechnical engineer should be engaged to thoroughly test all aspects of the soil. They will take samples to test how reactive it is: this gauges how much the soil on the site is likely to move, expand and contract. This occurs because of changing moisture content in the soil.

Reactive soil can cause a lot of damage to a house, especially if the wrong type of footing system is used.

A geotechnical engineer will produce a report to ensure that there aren’t any hidden chemical or physical conditions on the site that could damage a proposed house. The report will also investigate the stability of natural slopes and the chemical composition of the soil.

The type of footing or slab subfloor that can be built on a site will depend on how stable the soil is. After the soil test is completed it is up to a structural engineer to design a footing system that is appropriate for the conditions.

Contaminated land can cost a lot of money to remedy. Buyers should always make enquiries as to the previous use of the land, and commission a soil test before finalising any contract of sale.

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