Environmental Liability

I recently presented a webinar on environmental due diligence for commercial property transaction. In case you missed it, there was a discussion of three of the more common environmental site assessments we commonly conduct:

1. Phase I Environmental Site Assessment
2. Modified Phase I (MP-1)
3. Records Search with Risk Assessment (RSRA)

Each is a valuable tool that can be used in a commercial property transaction. The Phase I ESA is probably the most familiar, as it was formalized to comply with the USEPA's...

A facility’s Environmental Manager is tasked with ensuring compliance with the ever-changing rules and restrictions of today’s environmental policies. If this is a new role it is easy to get overwhelmed and not know where to begin. Over the next week or so we will feature a series which will highlight some of the common violations found in these areas:

• Clean Air Act 
• Clean Water Act
• Resource Conservation and Recovery Act
• Comprehensive Environmental Response, Compensation and Liability Act

Taken from a previously published article in our newsletter:

Owning a commercial or industrial building can present unexpected environmental liabilities. A property owner is ultimately responsible for the environmental condition of the property which includes contamination caused by past or current tenants. Most of these environmental concerns and potential liabilities are unknown until a Phase I Environmental Site Assessment (ESA) is performed. Unfortunately, a Phase I ESA is typically driven by...

Taken from our newsletter files:

Vapor intrusion (VI) is one pathway for building occupants to come in contact with chemicals of concern, occurring when vapors from contaminated soil and/or groundwater migrate into the indoor air of overlying structures. The American Society for Testing and Materials (ASTM) Standard Practice for Assessment of Vapor Intrusion into Structures on Property Involved in Real Estate Transactions E 2600-08 has been developed based on an industry need to address the VI...

This article details the issue of UST facilities and the change in the SBA's SOP (effective 10/01/11) pertaining to how to address them during environmental due diligence for an SBA backed loan:

http://www.elabs7.com/functions/message_view.html?mid=1358993&mlid=10412&siteid=29083&uid=78a43f1442

The logic makes sense, but the increased liability for EP's is significant.

It is very important, and most times required, by lenders to have a Phase I Environmental Site Assessment (ESA) performed prior to a property transaction. The purpose of an ESA is to identify environmental risks associated with the property and to protect against liability related to existing site conditions. However, there are a number of environmental considerations which are outside the scope of a Phase I ESA; commonly referred to within an ESA as “non-scope considerations.” These additional...

“In law, the judicial appointment of a person, a receiver, is to collect and conserve certain assets and to make distributions in accordance with judicial authorization. A receivership is properly an intermediate or incidental step toward some other principal objective and not generally the object of litigation. The principal objective may be the preservation of the assets pending a decision as to who should receive the property, or it may be the liquidation of the assets and the distribution of...

How you think about and utilize the environmental risk mitigation provisions included in your sales agreement can result in leaving money or other value on the table both in the just completed deal and, potentially, in future transactions involving the same assets.

Given the virtual impossibility of eliminating all of the material environmental risks surfaced during the due diligence period, they are normally addressed using a variety of financial and legal instruments which are set forth in the...

Preparing for my webinar on "Addressing Vapor Intrusion during a Property Transaction," I ran across an ASTM article that gave a great basic snapshot of the four tiers involved in conducting a vapor intrusion assessment. I have copied an exerpt below, but you can find more information at www.astm.org.

Anthony J. Buonicore, chair of ASTM Task Group E50.02.06 on Vapor Intrusion, says E2600 defines good commercial and customary practice for conducting a vapor intrusion assessment on a...

Conducting an All Appropriate Inquiry (AAI) Phase I Environmental Property Assessment (ESA) offers purchasers certain environmental liability protections. Many purchasers do not realize they may need to fulfill ongoing obligations to maintain these important liability protections. ASTM International recently published a Standard Guide for Identifying and Complying with Continuing Obligations, ASTM E 2790-11 (Guide). This Guide was developed by representatives of various industrial, lending,...

A facility’s Environmental Manager is tasked with ensuring compliance with the ever-changing rules and restrictions of today’s environmental policies. If this is a new role it is easy to get overwhelmed and not know where to begin. The following are typically regulated environmental policies and some of the common violations found in these areas.

Clean Air Act
Through the enforcement of the Clean Air Act (CAA), the U.S. Environmental Protection Agency (EPA) seeks to protect and enhance the quality...

When a property is undergoing a transaction (e.g., sale, refinance, foreclosure), a Phase I Environmental Site Assessment (ESA) is conducted to identify any potential liabilities associated with past or present use of the property. The industry standard for performing Phase I ESAs is based on the American Society for Testing and Materials (ASTM) Standard E 1527, which specifies industry-accepted minimumrequirements for evaluating the environmental condition of a property. The Phase I ESA is...