There is a contamination issue

Possibly. Under the Contaminated Land Management Act 1997 (NSW), a person who causes contamination, and an owner of land that has been contaminated, generally has a duty to report it to the NSW EPA, but only where the contamination meets the criteria set out in the Act (broadly, where the contamination is significant enough to warrant regulation, assessed against the criteria in the EPA's reporting guidelines). The duty usually arises as soon as practicable after the person becomes aware, or ought reasonably to have become aware, of the contamination. Whether the reporting threshold is triggered depends heavily on the specific facts and the data from any site investigation, so it is commonly assessed with environmental and legal advice.

A Preliminary Site Investigation (PSI) is generally a desktop and walkover review of a site's history and surroundings to identify whether contamination is likely, based on past and present land uses. A Detailed Site Investigation (DSI) usually follows where a PSI flags a potential issue, and involves sampling and laboratory testing of soil, groundwater or other media to confirm the nature and extent of any contamination. These reports are typically prepared by a suitably qualified environmental consultant and often inform decisions about reporting duties, remediation, transactions and development.

Contracts for the sale of land in NSW commonly include warranties and disclosure requirements, and contamination may also be flagged in a section 10.7 planning certificate or other searches. Knowingly concealing a contamination issue, or making misleading representations about it, can generally expose a vendor to legal risk, including under the contract and under misleading or deceptive conduct laws. Because disclosure and warranty obligations vary with the contract terms and the circumstances, the position commonly needs to be checked for the particular sale before exchange.

Under Chapter 4 of State Environmental Planning Policy (Resilience and Hazards) 2021 (which replaced SEPP 55 - Remediation of Land), a consent authority such as a council must generally consider whether land is contaminated and, if so, whether it can be made suitable for the proposed use before granting development consent. This may mean a site investigation, and sometimes a remediation action plan or remediation works, are required as part of the planning process, and consent may be subject to conditions. How these requirements apply depends on the site history, the proposed use and the relevant planning controls, so they are usually assessed early in a project.