Anticipating Post-Closing Environmental Issues in Real Estate Deals - PowerPoint PPT Presentation

Presenting a live 90-minute webinar with interactive Q&A Anticipating Post-Closing Environmental Issues in Real Estate Deals Managing and Avoiding Post-Closing Consequences; Setting the Rules of Play TUESDAY, FEBRUARY 28, 2017 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Daniel A. Cantor , Partner , Arnold & Porter Kaye Scholer , Washington, D.C. Cindy J. Karlson, Founder , Law Offices of Cindy J. Karlson , Groton, Conn. Daniella D. Landers, Partner , Reed Smith , Houston The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .

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Cindy J. Karlson Law Offices of Cindy J. Karlson Direct Office: 860.245.4922 Cell: 860.614.0184 Cindy@Karlsonlawfirm.com

PROGRAM AGENDA I. I. Anticipating and identifying potential Anticipating and identifying potential environmental issues which may occur post- environmental issues which may occur post- closing closing II. II. Negotiation strategy and contractual tools to Negotiation strategy and contractual tools to address post-closing issues address post-closing issues III. III. Implications of court decisions and other Implications of court decisions and other considerations considerations 6

Rules of the Game 1. Joint and several liability. 1. Joint and several liability. 2. You cannot contract liability vis-à-vis the government 2. You cannot contract liability vis-à-vis the government 3. Environmental conditions are frequently latent and 3. Environmental conditions are frequently latent and unknown at the time of closing unknown at the time of closing 4. Most environmental issues run with the land 4. Most environmental issues run with the land 7

Rules of the Game  Real estate contracts often do not bind third parties  Real estate contracts often do not bind third parties  Some environmental agreements are not recorded on  Some environmental agreements are not recorded on the land records the land records (access agreement, technical risk management plans) (access agreement, technical risk management plans) 8

The Art of the Commercial Real Estate Deal - There is no boilerplate or default deal format - There is no boilerplate or default deal format - Need to identify the environmental risks - Need to identify the environmental risks - Allocate the risks - Allocate the risks - Pre-closing - Pre-closing - Post-closing - Post-closing 9

The Spectrum of Liability 10

Types of Post-Closing Liabilities Monetary Claims Cleanup Liabilities 1 st Government Party 3 rd Contract Government Voluntary Party Conditions 11

Potential Cleanup Obligations Investigation Investigation Remediation Remediation Post-remediation monitoring Post-remediation monitoring Land use restrictions Land use restrictions Ongoing operation & maintenance Ongoing operation & maintenance Financial assurance Financial assurance 12

Investigation Considerations  Soil sampling  Soil sampling Location Location   Timing Timing    Groundwater sampling  Groundwater sampling Location of wells Location of wells   Repair and replacement of wells Repair and replacement of wells   Removing or abandoning wells Removing or abandoning wells    Indoor air sampling  Indoor air sampling Where and when Where and when   13

Remediation Considerations - Specific level of cleanup - Specific level of cleanup - Who is responsible for government submittals - Who is responsible for government submittals - Who choices remediation option - Who choices remediation option - Who pays for what costs and unknowns - Who pays for what costs and unknowns - Will land use restrictions be allowed as remediation - Will land use restrictions be allowed as remediation - How will remediation impact post-closing existing or - How will remediation impact post-closing existing or future use of the property future use of the property - Are financial assurances required? - Are financial assurances required? 14

Post-Remediation Monitoring  Define length of monitoring program  Define length of monitoring program  Site access issues  Site access issues  Sharing data and information  Sharing data and information  Cooperation  Cooperation  Post-closing use of property potential impacts on  Post-closing use of property potential impacts on remediation outcomes remediation outcomes  Communications with government  Communications with government  Impacts on financial agreements  Impacts on financial agreements 15

Land Use Restrictions  Agree on which restrictions may  be allowed by the parties  Who will pay for costs?   A2 surveys  A2 surveys   Legal title work   Subordination agreements   What if remediation or land use restrictions not completed and property is sold again? 16

Odds and Ends  Operation and Maintenance  Operation and Maintenance  Remediation systems  Remediation systems  Who pays for electric  Who pays for electric  Equipment and structures  Equipment and structures  Engineering controls  Engineering controls  Cap repair and maintenance  Cap repair and maintenance  Trees and green cover  Trees and green cover 17

Complicating Factors  Tenants/Leases  Tenants/Leases  Lender conditions  Lender conditions  Third party claims  Third party claims  Government  Government 18

Issues to Parse Out  Site access  Site access  Obligation triggers  Obligation triggers  Cleanup end points  Cleanup end points  Notice requirements  Notice requirements  Information dissemination  Information dissemination  Agency communication parameters  Agency communication parameters  Cooperation requirements  Cooperation requirements 19