TOXIC CONTAMINATION

Concern about toxic contamination has become a primary issue in acquiring, selling, and leasing real property.

In representing a client in a purchase and sale or lease transaction, we are available to guide the client through the toxic investigation and evaluation process and negotiate a buyer’s or seller’s (or lessor’s or lessee’s) rights and obligations regarding toxic contamination that may exist on or under a parcel of land or in a building.

The issues that you are  likely to encounter include the following:

(1) dealing with toxic contamination as part of a real property purchase and sale or lease transaction and

(2)  unexpectedly finding that you own a contaminated parcel of property or building.

A typical real property purchase and sale transaction, and many lease transactions, involve three phases related to toxics:

• Investigation of the property for toxic contamination;
• Evaluation of the extent and nature of the contamination; and
• Negotiation and documentation of each party’s rights and responsibilities regarding toxic contamination and its remediation or removal.

The investigation and evaluation (or due diligence) process, including the use of consultants, documenting the seller’s disclosures, and addressing due diligence issues. Allocation of the parties’ respective rights and responsibilities regarding toxic contamination and documentation of the negotiated allocation should be part of most agreements.

The terms “toxic contamination” or merely “contamination,” are inexact terms that generally refer to any number of chemicals, substances, or by-products defined variously as hazardous wastes, hazardous substances, and petroleum fractions.  Other terms that may apply are the following:

• “Release” (defined in 42 USC §9601(22));
• “Response” (defined in 42 USC §9601(25)); and
• “Removal,” “remedy,” and “remedial action” (defined in 42 USC §9601(23)–(24)).

Most practitioners use the term “remediation” instead of the statutory terms “remedy” or “remedial action,” and in practice “remediation” is often used to include both “remedial actions” and “removal,” even though their statutory definitions are mutually exclusive.