Can undisclosed environmental contamination on a neighbouring property affect the business I'm buying?

It can, even though the contamination itself sits on land you have nothing to do with. Contamination doesn't respect property lines, and groundwater or soil contamination migrating from a neighbouring site can affect the property your business operates from, potentially triggering remediation obligations, use restrictions, or regulatory attention directed at your site even though the source is next door.

This kind of risk is also one of the harder ones to catch through ordinary due diligence, since it isn't necessarily reflected in anything specific to the business or property you're buying — it depends on the history and current condition of surrounding land, which typically requires an environmental consultant's assessment (reviewing historical land use, any known contamination records, and site-specific testing) rather than a standard legal or financial review to properly identify.

Whether this is worth pursuing depends on the type of property and area — an industrial zone with a history of heavier land uses carries more of this risk than a modern retail plaza. If the business's premises or its value could plausibly be affected by neighbouring land use, an environmental assessment as part of due diligence is worth the cost. A Treadstone business lawyer can help you decide whether this risk is significant enough to warrant one for your specific deal.