When you are purchasing a new commercial property, the last thing you want are problems with the EPA and state regulators. This is exactly what you will end up dealing with if you do not do your due diligence and protect yourself from environmental liabilities when making a new purchase though. A Long Island, NY real estate closing lawyer can tell you more about what you can expect and how you can protect yourself. They can also help you review contracts and make sure that you are not leaving yourself open to any additional liabilities.
What Kinds of Environmental Liabilities Do I Need to Look Out For?
Environmental liabilities usually refer to contaminations on a property that would need to be cleaned up. These can be an issue for a few reasons. First of all, cleanups can sometimes cost six or even seven figures. That is a big investment to commit to when you are buying a property.
Another potential issue is that contamination could end up spreading to other properties nearby. This could result in lawsuits from other property owners.
Should I Trust a Seller’s Assessment of Environmental Liabilities?
If you really want to know the full scope of what you are getting into here, it is recommended that you have your own review of the property completed. Sellers will often show a Phase I environmental assessment with no issues, a so-called “clean” assessment. However, you are really going to want to get one of your own done.
You want a Phase I assessment that is less than a year old. Your seller’s assessment might be older. Their assessment also may not have been done by the most reputable company, so trusting it blindly could result in more headaches later.
Can Forming an LLC Protect Me?
Some people think that forming an LLC can protect them from personal liability completely. This is not necessarily true when it comes to environmental liabilities, even if the issue was a pre-existing condition on the property that was purchased. Incorporating and using an LLC can still be a good idea for other reasons, but you just should not expect this to give you full indemnity.
Can a Lawyer Protect Me From Environmental Liabilities?
Having a lawyer review your contract can give you a better idea of how environmental issues are being dealt with in your sale agreement. Depending on how a contract is written, someone could end up unexpectedly on the hook for environmental liabilities. It needs to be clear when the buyer or the seller is responsible for something.
Talk to a Real Estate Lawyer Today
If you are considering a big commercial property purchase, it’s wise to talk to an attorney first. Contact David A. Gallo & Associates LLP and schedule a consultation. We would love to tell you more about what we can do for you and how we can make it easier to protect yourself in the fast-moving commercial real estate business.