For those willing to invest in the State of São Paulo, Brazil, buying companies, sheds, land, etc., or renting their respective areas, getting acquainted with the applicable provisions of State Law No. 13577 of July 8, 2009 is recommended. Said law provides for policies and procedures for soil quality protection and management of contaminated areas.

The law addresses the protection of soil quality against changes identifiable as harmful contamination. It also defines responsibilities, identifies and records contaminated areas and proposes remediation for these areas, making their use safer for the present and future.

Under Article 6 thereof, any individual or legal entity who, by act or omission, may contaminate the soil should adopt such measures as necessary to prevent any significant and harmful changes to soil functions.

Article 15 of the law is nonetheless the most important one for those who are buying or renting areas after this law came into force, because it establishes that the party responsible for an area should immediately report to environmental authorities any evidence or suspicion that an area is contaminated.

Under article 13 of the law, the following parties are held legally and jointly liable to preventing, identifying and remediating a contaminated area: i) the one who caused the contamination and their successors, ii) the owner of the area; iii) the lessee; iv) the holder of the actual possession v) anyone who benefits directly or indirectly from it.

The legal analysis concerning where liability shall lie is very important, because without going further into identifying liable parties as established in article 13 of the law, one can initially determine that the legislation may have relied exclusively upon the federal legislature when establishing rules of civil law, in that emphasis is placed on civil liability. This rules out the theory that this law refers to environmental protection legislation, and that being so, jurisdiction would also apply to the Brazilian states.

This law also allows for disregarding the legal entity when its form of business organization is an obstacle to identify and remedy a contaminated area.

Last but not least, for entrepreneurs to have an idea of the sanctions to which they are subject when not meeting the applicable requirements set forth by Law no. 13577, individuals or legal entities that in any way, by act or omission, contaminate the soil (article 6) or the party legally liable who has suspicion that an area is contaminated but fail to report it to the environmental authorities (article 15) may be subject to i) warning notice; ii) fine (which currently may range from R$ 63.40 to R$ 63,400,000.00), iii) stays of execution iv) demolition v) suspended financing and tax benefits.