Soil Protection and Contaminated Sites: Liability Under the BBodSchG

The soil protection framework

The Federal Soil Protection Act (Bundes-Bodenschutzgesetz, BBodSchG) aims to secure or restore the functions of soil sustainably. It requires prevention of harmful soil changes, remediation of harmful soil changes and contaminated sites (Altlasten) and of water pollution caused by them, and precautions against adverse effects on soil. The Federal Soil Protection and Contaminated Sites Ordinance (BBodSchV), which was comprehensively revised with effect from August 2023, sets the trigger values, action values and precautionary values used to assess contamination, and contains rules on the investigation and remediation of sites and on the use of soil material.

Soil protection law is enforced by state authorities, which can order investigations and remediation. The most important feature for businesses is the broad circle of persons who can be held responsible – and the authority's discretion in choosing among them. A buyer of land may become liable for contamination caused decades earlier by someone else, and a seller may remain liable after the sale. Contaminated land is common at former industrial, military, mining and gas works sites, and many brownfield redevelopment projects depend on managing these risks.

This article explains liability under soil protection law, the procedure for investigation and remediation, the statutory compensation claim between liable parties, and the contractual tools used in transactions and redevelopment.

Who is liable for contaminated sites?

Under § 4(3) BBodSchG, the following persons are obliged to remediate soil, contaminated sites and water pollution caused by them so that no lasting hazards, significant disadvantages or significant nuisances arise for individuals or the public:

• the polluter (Verursacher) of the harmful soil change or contaminated site;
• the polluter's universal successor (Gesamtrechtsnachfolger), for example a company that acquired the polluter by merger;
• the owner of the land;
• the occupier, i.e. the person with actual control of the land, such as a tenant.

In addition, a person who is liable under commercial or corporate law for a legal entity that owns contaminated land may be obliged, and a person who abandons ownership of contaminated land is also liable. Remediation can include decontamination as well as containment measures that prevent the long-term spread of pollutants; where neither is possible or reasonable, other protective and restrictive measures can be ordered.

Former owners

A former owner of land is obliged to remediate if it transferred ownership after 1 March 1999 and knew or should have known of the harmful soil change or contaminated site (§ 4(6) BBodSchG). This does not apply to a person who, when acquiring the land, trusted that no contamination existed and whose trust deserves protection in the circumstances. Sellers therefore cannot escape liability simply by selling a site they know to be contaminated.

Choosing among those liable

The authority has discretion to choose whom to address. Its primary concern is the effective and rapid removal of the hazard, so it often addresses the person who is financially capable and has access to the site – frequently the current owner – rather than the original polluter. The order must nonetheless be proportionate. The Federal Constitutional Court has held that an owner's cost liability may, in certain circumstances, be limited by reference to the value of the property, particularly where the owner did not cause the contamination and did not know of it when acquiring the land.

Investigation, remediation orders and security

Where the authority has indications of a harmful soil change or contaminated site, it should take appropriate steps to establish the facts; if trigger values set by ordinance are exceeded, it should take the measures necessary to determine whether contamination exists (§ 9(1) BBodSchG). If there is a reasonable suspicion, it can order those liable to carry out investigations. If the suspicion is not confirmed, those required to investigate are reimbursed if they were not responsible for the circumstances that gave rise to it (§ 24(1) BBodSchG).

To fulfil the obligations under the Act, the authority can order the necessary measures (§ 10(1) BBodSchG). Where containment measures are ordered, the authority can require the obligated person to provide security for maintaining containment and monitoring measures in the future. For complex sites, the authority can require remediation investigations and a remediation plan, which can be declared binding and may be combined with a public law contract on remediation.

Cost recovery between liable parties

Because the authority may choose any liable person, the one who pays is often not the one who caused the contamination. § 24(2) BBodSchG therefore grants a statutory compensation claim: several liable persons have a claim against each other regardless of which of them the authority addressed. Unless otherwise agreed, the obligation to compensate and its extent depend on how far the hazard or damage was predominantly caused by one or the other.

The claim becomes time-barred after three years. Limitation begins after the authority has recovered the costs where it carried out the measures itself, and otherwise after completion of the measures by the obligated person. Importantly, the statutory claim can be modified or excluded by agreement – which makes the contractual allocation of soil risks in purchase agreements decisive.

Soil protection in transactions

Soil risks must be addressed in every acquisition of industrial or commercial land and in share deals for companies owning such land. Typical steps and clauses include:

1. Phase I and Phase II environmental assessments – historical research, site inspection and, where needed, sampling;
2. Register checks – state registers of contaminated sites and suspected sites, and building and water authority files;
3. Allocation clauses – who bears costs of known and unknown contamination, often with a split based on time, use or thresholds;
4. Indemnities – for remediation orders relating to pre-closing contamination, with caps, baskets and time limits;
5. § 24(2) BBodSchG – express agreement on whether and how the statutory compensation claim applies;
6. Security – escrow, guarantees or environmental insurance for significant risks;
7. Conduct of claims – who deals with the authority and how remediation is managed.

Leases of industrial property should also allocate soil protection responsibilities, because a tenant is liable as occupier and as polluter for contamination it causes. Restoration obligations at the end of the lease and baseline surveys at the start help avoid disputes about whether contamination existed before the tenant moved in or was caused by its operations.

For share deals, the target company remains liable as owner and possibly as polluter, so the buyer's protection depends on warranties and indemnities from the seller. Universal successors – for example after a merger – can be liable for contamination caused by the predecessor, which makes historical corporate restructurings relevant in due diligence.

Brownfield redevelopment

Redeveloping contaminated sites is attractive in growing cities and supported by policy goals to reduce greenfield land take. Projects typically combine planning law, soil protection and waste law. The development plan must address contamination, the remediation standard depends on the planned use – residential use requires stricter standards than industrial use – and excavated soil is often waste subject to the Circular Economy Act and the Substitute Building Materials Ordinance.

A public law remediation contract with the authority can provide certainty: it defines remediation targets, measures and responsibilities and can release the parties from further orders for the contamination covered. Developers should negotiate such contracts early, in parallel with the planning procedure, and reflect them in the sale and development agreements. Funding programmes of the states can support remediation where the polluter is not available. Close cooperation with the soil protection authority, the planning authority and the waste authority – ideally in joint meetings – avoids conflicting requirements and helps align remediation targets with the intended use and the construction schedule.

Insolvency and abandonment

If the polluter is insolvent and the owner cannot pay, the public purse often bears remediation costs. Authorities therefore act quickly to secure assets, including through security for long-term measures. Investors should be wary of acquiring contaminated property from distressed sellers without strong protection, and lenders should consider soil risks when taking land charges, since remediation obligations can affect the value of their collateral.

Preventive duties and soil management in construction

The Act is not only about historical contamination. Everyone who affects the soil must behave in a way that does not cause harmful soil changes (§ 4(1) BBodSchG), and owners and occupiers must take measures to avert harmful soil changes threatening from their land (§ 4(2) BBodSchG). For operators of industrial installations, this overlaps with immission control and water law duties: preventing leaks from tanks and pipelines, managing storage areas and responding to incidents quickly.

Construction projects raise practical soil protection issues. Large volumes of excavated soil must be classified, handled and either reused on site or disposed of in accordance with waste law. The revised BBodSchV contains rules on applying and introducing materials onto or into the soil, and the Substitute Building Materials Ordinance governs the use of mineral recycled materials. Soil management concepts and, for larger projects, soil protection supervision during construction are increasingly required by authorities as permit conditions. Costs for handling contaminated excavated soil can be substantial and should be addressed in construction contracts, including who bears the risk of unexpected contamination found during excavation.

Insurance and accounting

Environmental liability insurance and environmental impairment cover can protect against some soil risks, but policies often exclude known or gradual contamination. Companies must also consider whether remediation obligations require provisions in their financial statements. In M&A, buyers frequently ask for specific environmental insurance to bridge gaps in seller indemnities.

How TRW & Co helps with soil protection

We advise industrial companies, investors, developers and lenders on soil protection and contaminated sites. We assess liability under the BBodSchG, negotiate with authorities on investigation and remediation orders and public law remediation contracts, structure risk allocation in purchase agreements and leases, pursue and defend compensation claims under § 24(2) BBodSchG, and support brownfield redevelopment projects. Our work connects with our planning and environmental and real estate transactions practices and our articles on water law and the Circular Economy Act. Please contact us. This article is general information and not legal advice.