Environmental assessments are one of the many tedious but necessary components of a corporate real estate transaction, helping companies avoid stepping blindly into a costly environmental clean-up. They also help them make more informed decisions about property development and usage. However, one of the often overlooked benefits of these assessments is their ability to protect companies from future litigation.
The following are three ways that performing thorough environmental due diligence can save companies from future liabilities:
1-Time to mitigate risk
Identifying potential environmental issues like contamination or land usage restrictions early on allows companies to address those issues before closing the deal. That can mean further negotiations with the seller on price or mitigation or making a plan to address the situation after purchase. Designating the responsible party and solidifying a plan of action puts companies in a much better position by reducing the likelihood of being sued later on over claims of environmental harm.
2-Proof of compliance
Early discovery of potential environmental issues also allows companies to ensure that their development plans comply with all local and federal environmental regulations that may apply to the property. Not complying can result in fines and penalties and become a basis for future litigation from government agencies or other individuals.
3-Proof of reasonable action and intent
Should a company face a lawsuit for environmental damages, providing proof of an environmental assessment and documented mitigation actions can help build a strong defense by showing the company took reasonable steps to identify and address environmental risks.
Messner Reeves LLP’s seasoned corporate real estate team can provide experienced legal counsel in corporate real estate and environmental matters, helping you navigate the complexities of the process while minimizing your company’s risk.
