New
Federal Environmental Standards Will
Impact
All Commercial Real Estate Transactions Beginning
on November 1, 2006, new Federal
regulations will apply on all
environmental due diligence to be
performed on commercial real estate
transactions in the United States.
Buyers will need to comply with these
regulations in order to best protect
themselves against environmental
liability under the Comprehensive
Environmental Response, Compensation,
and Liability Act. In
order for buyers to be able to utilize
statutory legal defenses in attempts to
avoid liability for contamination on
their properties when the contamination
has been caused by others, buyers must
now comply with the new due diligence
regulations before purchasing
properties. In addition, there are other
requirements that buyers must comply
with also. We
all know that Phase I and Phase II
environmental assessments for commercial
properties have been the norm in most
areas for more than 15 to 20 years now,
but these new regulations will now
require a more extensive Phase I
environmental analysis to be performed
by buyers when purchasing a property.
Including...and you may want to take a
deep breath for this one...interviews to
be conducted with current and previous
owners of any commercial property before
it's purchased, as well as interviews
with present and former occupants of the
property also. For
more information on these new
regulations I recommend you read an
article on the subject written by two
environmental attorneys from one of the
most prestigious law firms in Los
Angeles...Greenberg Glusker. Click
here to go to Greenberg Glusker's Law
Report for the Second Quarter, 2006.
Once you're there (and the PDF file can
take a while to load), go to Page 3 and
read the article titled: Buyer
Beware: New EPA Due Diligence Standards
Will Impact All Commercial Real Estate
Transactions Greenberg
Glusker
recently renovated its Web site and the
link I've given you for the article is
its new location on their Web site. If
for some reason the link changes again,
go the their Web site at www.ggfirm.com
and look for the "Law Report, Second
Quarter 2006" on their Web site to
locate the article. One
of the reasons I urge you to read this
article immediately is because it
mentions that some of the new compliance
requirements are in effect right
now. I
spent 20 years as a commercial broker in
Los Angeles, and when I began in 1980,
agreeing on the purchase price was
normally the biggest problem we faced as
brokers on commercial real estate
transactions. But now with all the
regulations that have been enacted in
recent decades, getting the buyer and
seller to agree on the purchase price
can oftentimes be the easiest part of us
closing a transaction. But
I feel it's extremely important that you
know about these regulations because if
one of your buyers purchases a property
utilizing the old standards, your real
estate company will likely be sued if
the buyer's failure to comply with the
new standards results in liability to
them. So
do your homework, get educated on these
new regulations, and make sure both you
and your clients are protected by
complying with these regulations
whenever you're involved in a
transaction.
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