Q&A: Environmental Liabilities & Property Transactions

What are some common mistakes encountered when dealing with environmental liabilities in property transactions?

Common mistakes include overestimated costs based on highly unlikely scenarios that can be ruled out with data, as well as unrealistic approval timelines due to a lack of local knowledge. An experienced consultant will evaluate the unknowns, establish reasonable contingencies, and support agreements that clearly define the project’s path through the property sale and closure. Property deals that are delayed because of lingering environmental issues can greatly benefit from the fresh perspective of a transaction-focused consultant.

How can Langan support clients dealing with delayed property transactions because of lingering environmental liabilities?

Working with attorneys and state and federal regulators, Langan has helped craft agreements in advance of a sale to “save the deal,” laying out the path, timing, and costs of environmental cleanups. These agreements help bring the buying and selling parties to mutually agreeable terms, whether negotiating environmental escrows, remediation trusts, buyer-seller agreements (or tri-party agreements involving regulatory agencies), or consent orders.

As the environmental expert, Langan evaluates the known environmental conditions and may perform an investigation to fill in data gaps that affect the overall cost and timing. The information collected is then used to prepare a cost-to-closure evaluation or engineer’s estimate, which serves as the basis of the financial agreement, and a schedule based on regulatory milestones and achievable goals.

Charlene Drake, LSRP, PG is a Senior Associate with 30 years of experience specializing in environmental consulting. Her experience ranges from brownfields redevelopment and materials management, interpretation of environmental data, budget planning and administration, to critical path project management, environmental compliance, customer/stakeholder relationship management, and quality control and process development.