Buyers and sellers of real estate who wish to approach a transaction from a position of strength must be aware of environmental issues that can hinder or help their side of the deal. Here are just a few examples of how ESA ensures that our clients are strategically positioned for the sale or purchase of an impacted property.
Buyers and Due Diligence: Due diligence performed under the SRRA must be in the form of a Preliminary Assessment (PA). If other forms of due diligence (e.g., an ASTM Phase I) are submitted to the NJDEP, they will be rejected. Moreover, Licensed Site Remediation Professionals (LSRPs) have the obligation to report certain forms of environmental impacts. Therefore, buyers and sellers may wish to retain non-LSRP consultants during the due diligence process. This strategy should be discussed with your attorney, and appropriate language should be included in your contract of sale.
Innocent Purchaser Protection (IPP) Under the NJ Brownfield Act: IPP protects buyers from third-party liability if they should purchase a property that is subsequently found to contain contamination that, during “proper due diligence,” was not discovered and the buyer did not cause. IPP is only available to those who perform Preliminary Assessment. This protection does not, however, shield buyers from the cost of remediating such problems.
Seller-Financed Cleanups: Should sellers remediate their properties prior to closing? All things being equal, ESA thinks they should because clean properties command the highest selling price.
A Sense of Perspective: Some real estate deals have environmental issues that require attention, and some environmental consultants see their involvement as central to the deal. But it is the attorney who should direct how the deal is to proceed. ESA works closely with our clients’ attorneys to affect an outcome that makes sense and, most important, keeps the deal moving forward.