REAL ESTATE TRANSACTIONS

Clients and real estate attorneys often reach out to Environmental counsel to assist in managing due diligence issues and to negotiate environmental indemnity and disclosure terms in the agreement of sale. This partnership adds value in typical commercial or industrial property transactions, as well as “Brownfield” sites where environmental issues are expected to be more complicated.  

Effective due diligence starts with a well-planned Phase I investigation which includes the scope of inquiry set forth in the ASTM E1527-13 protocol and intelligently applies that scope to the issues associated with specific properties.  Compliance with the ASTM protocol is critical for assuring eligibility for “innocent purchaser” related liability limitations under CERCLA.   Of equal or greater importance in performing Phase I investigation is the goal of meaningful assessment of construction and land use risks from historic site impact; and to recommend appropriate levels of “phase II” investigation including soil or groundwater, as well as reasonable allocation of liability risk.  

 Environmental counsel can assure that the Phase I investigation and report adhere to the EPA regulations.  Of perhaps greater value,  is the assurance of a non-mechanical, mindful assessment of critical liability risk issues, with clearly articulated caveats and limitations.  

Environmental due diligence and negotiation of indemnity obligations are important for industrial properties generally; but also for commercial properties which may have previously had industrial operations or retail fuel, auto repair, or dry cleaning use.  It is also common to encounter commercial and residential property impacted by underground heating oil tanks. Where due diligence reveals historic site impact, Environmental Counsel works with consultants to obtain Pennsylvania Act 2 approval of site investigation and and any remediation, and statutory release of liability.  

At Brownfield sites, property is already known to be impacted by historic use.  Thus due diligence focusses on obtaining sufficient site data to enable reasonable remedial cost estimates and a presentation of general approach to the state agency. Negotiation of indemnities is also likely to expand into allocation of responsibility for assuring completion of necessary site investigation and remediation.    

Environmental counsel also add value to the Seller’s legal team.   Proactive due diligence can facilitate consummation of a sale as well as Buyer’s ability to secure financing.  Also, many sellers seek to force the buyer to take the property “as is;” but end up having to negotiate compromise exceptions, in order to consummate a deal.

Selected Experience
  • Special counsel for sellers of auto repair garage, residential property with old heating oil tank, and light industrial property having potential contamination issues from an off site source;   Negotiation of acceptable site investigation access and indemnity for future environmental claims; 

  • Special counsel for developers of vacant urban land with reported previous industrial use;  Advice on scope of due diligence and potential liabilities associated with an “as-is” purchase”.

  • Representation of storage facility company in evaluation and purchase of former industrial property with large shuttered manufacturing building still standing; Negotiated PADEP ACT 2  and USEPA remedial requirements in conjunction with demolition, remediation  and redevelopment; 

  • Representation of seller of industrial property in negotiating indemnity terms and allocation of responsibility for ongoing site investigation and remediation;

  • Representation of redeveloper of former gas station sites for retail use; Advice on oversight of ongoing groundwater monitoring and on new construction consistent with known residual site contamination. 

  • Advised bank regarding foreclosure on property potentially requiring additional remediation.