Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
Issue link: http://cire.epubxp.com/i/700533
July | August | 2016 CCIM.com "no further action" determination as the cleanup endpoint. In order to receive a no further action rul- ing, buyers and sellers fi rst need to be more specifi c as to the property's use. Even setting a site-use parameter, such as industrial or residential, may not be suffi ciently specifi c under current risk-based cleanup rules. You likely need to specify whether the party con- ducting the cleanup can implement institu- tional prohibitions, such as groundwater well installation, or engineering controls, such as paved surfaces, in order to attain the requi- site degree of risk avoidance under the state cleanup statute. 4. Making environmental liabilities "at purchaser's sole cost and expense" may inadvertently extinguish the buyer's con- tribution rights against third parties. When contract language states the buyer assumes site cleanup costs at its sole cost and expense, I assume no environmental lawyer has reviewed the language. Such sole-cost lan- guage may inadvertently eliminate the buyer's rights to recover the cleanup costs from third parties, such as the facility next door. Even in cases where the transaction agreement also contains a clause eliminating any third-party benefi ciaries, a court may interpret such sole- cost language to extinguish statutory contri- bution rights. at may not have been the parties' intent. e seller may have no objec- tion to the buyer's bringing an environmental contribution action against the owner of the property next door for contamination that migrated onto the buyer's property. 5. "Survival" clauses that purport to endure for the length of the correspond- ing statute of limitations for the indemni- fi ed environmental liability might endure indefi nitely. Acquisition agreements sometimes set the survival period for indemnity claims for breaches of the environmental representations at "the expiration of the statute of limitations applicable to" the representation, including the representation that there had been "no release of hazardous materials." ere could be many bases for asserting claims based on breach of the "no release" representation: a couple federal statutes, one or more state stat- utes, and several common law theories. Under one federal statute, causes of action would be evergreen as long as the plaintiff could show that there was the threat of a release of hazard- ous materials. So it is possible that the survival period could endure indefi nitely. Where environmental liability is a mate- rial risk, and the parties intend to apportion it between themselves, they need to take care in dra ing the contract provisions to give eff ect to their intent. Tom Mounteer is a partner in global law fi rm Paul Hastings Washington offi ce. Contact him at tommounteer@paulhastings.com. GET CONNECTED CCIM Connect is the new members-only communication platform that allows you to: Log on at CCIMconnect.com Request and share industry insights that build your business Strengthen the relationships that lead to closed deals Collaborate on documents to ensure best practices