Lenders are making loans again. Lenders are much more cautious
about the loans they are making and much more thorough with their
due diligence on every piece of property. Perhaps the biggest
concern for a lender (aside from whether its borrower will default)
is the environmental condition of the property. Now more than ever,
lenders are fearful (and rightfully so) of exposure to liability
for violations of environmental laws following foreclosure and
transfer of possession of a commercial property. Generally, Lenders
are insulated from such liability; however, they must be careful
not to overstep the boundaries of the protections afforded
them.
What is CERCLA?
It is mentioned in many commercial real estate loan documents,
typically in connection with a representation by a borrower that
they are in material compliance with it. "CERCLA" is an
acronym for the Comprehensive Environmental Response, Compensation
and Liability Act of 1980. This is the primary piece of
