Allocating Environmental Liability – Landlord v. Tenant

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https://parisnordmoto.com/kh8xtn6xws In a lease, parties can allocate risk as they choose – and often do. Risk need not follow fault, though it often does. So, the question is: how should allocating the risk of environmental liability work as between a landlord and its tenant?

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For simplicity, we’ll assume that the landlord we’re talking about owns the property in question. We’ll also assume that we’re not speaking of a ground lease or similar arrangement, though many of our thoughts are equally applicable to such arrangements.

https://popcultura.com.br/42zl9d1tpg When it comes to allocating the risk of environmental liability between a landlord and its tenant, https://childventures.ca/2022/09/14/psrfpnrcnq Ruminations thinks risk (call that: responsibility) should follow fault. We’ve said “between a landlord and its tenant” a couple of times because our thoughts certainly won’t change the way the law allocates such responsibility. [Read more…]

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Why Are Environmental REP(resentation)S Different?

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The purpose of asking for a representation in a purchase contract, lease or other agreement is two-fold. The representation serves as a risk-shifting device and it serves as an element of the due diligence process. This is never clearer than when it comes to the ever contentious “environmental rep.”

https://flowergardengirl.co.uk/2022/09/14/k6p5v7cadm The transferor (seller, landlord or borrower) and the transferee (buyer, tenant or lender) are not on even footing when it comes to representations. The property owner holds all of the environmental knowledge and all of the environmental risk before any transaction with the transferee takes place. So, the questions are: (a) how much risk should the buyer, tenant or lender take over; and (b) what should the seller, landlord or borrower be required to reveal before the “closing” takes place? We all know that, in practice, the answer differs depending on the type of transaction. Lenders rarely will lend their money without broad, all-encompassing representations from their borrowers, coupled with the fullest of indemnities. And, their borrowers honor that demand. [Read more…]

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