A local council is finally telling residents and businesses in Melbourne’s northwest they have been living above an old tip leaking potentially toxic gases for years.

More than 80 properties have been built above part of Sunshine Landfills, which closed in the 1990s.

Gases are seeping out from waste buried below.

Brimbank City Council has spoken to its insurer about possible financial claims.

Up to 69 homes, six businesses and five community groups using council land, open spaces and the M80 Ring Road are on top of the former landfill site or near the gases.

Some residents may know they live above a tip but others have been left in the dark.

Council city development director Kelvin Walsh told the ABC on Friday that the council had spoken with residents in 2011 and 2012, with ongoing gas and soil testing.

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A 2013 state environmental protection watchdog report found a “high risk” to residents, workers and the public in commercial and residential facilities, including the local bocce club.

But since then, the council has been lax in telling new residents about the issue.

“The disclosure for land purchasers has not been ideal. What we are doing now is embarking on the planning scheme amendment to ensure full disclosure,” Walsh said.

It is a joint responsibility of the state planning department, environment protection watchdog and the council to fully inform buyers keen to move to the area, he said.

The council wants to introduce an environment audit overlay to identify potentially contaminated land, uncompacted soil and waste linked to the tip.

It hopes to team up with the state government for a co-ordinated response.

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