Environmental due diligence procedures are vital for real estate sales and purchases in New Jersey, as the state has the highest number of Superfund sites in the country. An environmental due diligence assessment is also required when you want to make or obtain a property loan.
As a real estate lawyer in NJ for over 30 years, SCC Legal is ready to assist commercial and residential property owners in understanding their contract terms and will provide clarification on potential property issues that affect them. Our team includes environmental lawyers in NJ who know the unique environmental liability landscape of our state. In this article, we discuss the importance of environmental due diligence and how our experienced team can help.
What Is Environmental Due Diligence and Why Is It Important?
The due diligence process evaluates the environmental conditions and risks associated with a property to identify the presence or likely presence of contamination. Environmental assessments help property owners and purchasers understand the type and level of contamination as the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and other laws hold property owners liable for the costs attached to addressing onsite contamination. The New Jersey Spill Compensation and Control Act (“Spill Act”) provides an innocent-purchaser defense to persons who purchased contaminated property prior to September 14, 1993.
Different Types Of Environmental Due Diligence Assessments
New Jersey property owners must provide assessments in addition to the standard federally required Phase 1 Environmental Site Assessment (Phase 1). A Preliminary Assessment Report (PA) is required for properties located in New Jersey, in accordance with the Spill Act. It is similar to a Phase 1 report, but offers a more detailed analysis and satisfies the “appropriate inquiry” standard. A Site Investigation (SI)/Phase 2 Environmental Site Assessment is also required, and evaluates the potential existing contamination further.
Environmental Indemnification for Real Estate Professionals
Real estate professionals such as property lenders require environmental indemnification as they don’t want to be held liable for contaminated properties simply because they provide a loan or securities. The assistance of a real estate attorney with environmental law expertise, such as SCC Legal, is valuable in this instance, as the specific language used in environmental indemnity agreements is critical. The language rather than general concepts of indemnity have been shown to determine whether particular damages or costs will be subject to indemnity.
Best Practices for Conducting Environmental Assessments in NJ
The industry is aware of the best practices for conducting environmental assessments. It might seem like an additional cost, but appointing a professional company to perform the assessments protects you and your company from fines, lawsuits, and expensive remediation projects. The language used in environmental due diligence and indemnification documentation matters. The SCC Legal team can help you understand the legal implications of the due diligence results and ensure the language used in any environmental indemnity agreements abides by the law, while protecting your interests.
For more information on environmental and real estate law, or if you want legal assistance with your environmental due diligence efforts, please contact our team at SCC Legal today or visit us at: https://www.scclegal.com/