July 14, 2020

Volume X, Number 196

July 13, 2020

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Environmental Considerations: Identifying Risks and Protecting Assets in Turbulent Times

We are all currently experiencing turbulent economic conditions and uncertainties that may last for the foreseeable future. In light of this uncertainty, we remind property owners, lenders, and managers, as well as landlords and tenants, to identify both potential environmental risks and valuable environmental assets associated with a property or tenant.  Identifying these potential liabilities and assets now will ensure that risks can be managed and valuable entitlements can be preserved so as not to negatively affect the value of their assets.  

  • For known contaminated property, identify any ongoing soil or groundwater monitoring requirements or ongoing remedial actions.

    • Review contractual obligations, including potential reporting dates, and associated penalty clauses.

    • Confirm with contractors and environmental consultants whether the staff is able to continue monitoring or mitigation work. 

  • Identify all environmental permits and entitlements, including those noted in any sale, lending, or lease documents, as well as any regulatory agency databases.

    • Review permits for ongoing and future environmental compliance responsibilities, including monitoring or mitigation requirements, and note any deadlines and associated penalties or fines.  

      • Consider outreach to regulatory agencies to request deadline extensions, and/or confirm whether certain reporting dates have been tolled. 

  • If environmental compliance or remediation efforts are stipulated in an agency agreement (e.g. consent agreement) or court order, review and identify any "force majeure"  provisions which may provide relief if compliance becomes difficult or impossible to undertake.  

  • Resist the urge to shorten due diligence timelines for eager sellers. Prior to closing, buyers and/or their lenders have a one-time opportunity to place environmental risk on the seller. 

  • If considering foreclosure, a lender should conduct the same due diligence activities that a buyer would in order to qualify for the same innocent landowner defenses. 

  • Economic downturns can affect borrowers' liquidity. Always consider environmental issues that may siphon off cash. 

© 2020 Bilzin Sumberg Baena Price & Axelrod LLPNational Law Review, Volume X, Number 83

TRENDING LEGAL ANALYSIS


About this Author

John V. Chibbaro Land Development & Government Relations Attorney Bilzin Sumberg Law Firm
Of Counsel

John V. Chibbaro is an attorney in Bilzin Sumberg's Government Relations & Land Development whose practice is focused on environmental and land use matters. John advises clients on virtually all aspects of development, from initial permitting and entitlement strategy through government approvals and incorporating legal, political, community, and public relations issues. John is experienced representing clients before local, state, and federal agencies and has handled complex regulatory matters involving the National Environmental Policy Act, the Clean Air Act, the...

305-350-2401
Alexandra Barshel Environmental Lawyer Bilzin Sumberg
Associate

Alexandra Barshel is an Associate in Bilzin Sumberg's Environmental Group. During her time at the University of Florida, Alexandra served as an articles editor for the Florida Law Review. She was also a student associate in the University of Florida Conservation Clinic where she worked on drafting a comprehensive plan for the management of marine resources in Hernando County. Alexandra also interned for the Miami-Dade Commissioner of the Florida Inland Navigation District (FIND), which sponsors government projects promoting waterway access and sustainable improvement.

Experience 

  • Environmental Clean Up Resolves Issues for New Housing Development
  • Brownfield Remediation for Redevelopment of 9.6-Acre, Mixed-Use Property
  • Environmental Permitting for 32-Acre Commercial Tree Farm Redevelopment
305-350-7233
Howard E. Nelson, Environmental Practice Attorney, Bilzin Sumberg Law Firm
Partner

Howard E. Nelson has over 20 years of experience in environmental and land use law and over 25 years of experience in zoning and regional planning. He represents clients throughout all phases of the development process—from site location through permitting and construction, as well as in permit appeals and defense of environmental enforcement matters.

Howard focuses a substantial portion of his practice to the analysis and remediation of site contamination issues, representing several national homebuilders in pre-acquisition...

305-350-2386
Cristina Arana Lumpkin, Environmental Attorney, Bilzin Sumberg Law Firm
Partner

Cristina Arana Lumpkin is a Partner in Bilzin Sumberg's Environmental Group. She advises clients on all aspects of environmental law, including transactional, regulatory and litigation matters.

Cristina represents homebuilders and commercial real estate developers throughout all phases of the land development process. She advises clients on pre-acquisition environmental due diligence, working with the client's environmental consultants to ensure the appropriate scope and methods of site assessment. For contaminated sites, Cristina advises...

305-350-7241