Minimizing Environmental Risk In Real Estate Transactions

Caveat emptor. Although the harsh effect of this common law mantra is typically handled through complex real estate conveyance contracts, a purchaser of commercial real estate should remain wary of potential environmental pitfalls. Contracts are designed to allocate risk. In dealing with environmental laws such as CERCLA (commonly known as "Superfund") and its state counterparts, however, the governmental agencies enforcing such laws will look first and ultimately to the property owner. Under the liability scheme of CERCLA, owners of contaminated properties are deemed liable for the cleanup costs, regardless of fault. A property owner then bears the burden of proving nonliability under the statute.