Commercial Real Estate Purchases And Environmental Issues – Buyer Beware?

Traditionally, Canadian common law as adopted from England places the obligation on purchasers of real property to complete due diligence and satisfy themselves as to the state of the property purchased. This general rule, caveat emptor or "let the buyer beware", was limited only by latent title defects or fraudulent statements or acts of concealment by the vendor.

As environmental issues become more prevalent and costly, it is important for purchasers of real estate to consider whether caveat emptor applies in the traditional sense to contamination or other environmental issues. Is contamination a latent defect? Is there some other rule which can make a vendor liable for such damage, even years after a property has been purchased?