Description
With ever-increasing federal and state environmental regulations imposing strict standards and penalties, buyers and sellers of commercial real estate must anticipate and mitigate potential environmental risks associated with a deal when negotiating and drafting the PSA. Crucial provisions in any PSA are environmental reps, warranties, and indemnities; and given the potential liability for buyers and sellers, boilerplate language should be avoided.
Common reps and warranties include, among others: (1) the usage of hazardous materials on the property is in compliance with all applicable laws; (2) the facilities have the necessary permits and authorizations; and (3) there are no present or threatened hazardous material releases in violation of any environmental law affecting the property. Although these reps and warranties appear straightforward, disputes often arise related to breaches of these provisions that result from poor or vague drafting.
Where the seller may breach an environmental rep or warranty, a well-drafted indemnification provision may provide the buyer with indemnity although there may be certain statutory limitations (e.g. CERCLA). Therefore, counsel should understand key negotiation and drafting considerations for these provisions to minimize the risk of breach and liability for their clients.
Listen as our expert panel guides real estate practitioners through drafting environmental reps, warranties, and indemnities for commercial PSAs. The panel will discuss pre-drafting considerations and offer best practices for comprehensively drafting these provisions to best protect clients--whether buyers or sellers.
Presented By
Ms. Jessen’s practice focuses on the range of contaminated property redevelopment issues, including environmental due diligence, negotiating purchase and sale agreements, cleanup plans, development agreements and environmental insurance policies, severed mineral interests, and professional service and construction contracting. She advises and represents clients before regulatory agencies regarding remedy selection, administrative orders, cleanup standards, institutional controls, redevelopment, and community relations activities under voluntary cleanup agreements and regulatory orders.
Ms. Karlson focuses on environmental and land use law, including compliance counseling, transactional work, administrative matters and litigation. Her work involves pre-transaction counseling and structuring of deals, developing risk management strategies, negotiating contractual language on environmental risk and allocation of liability for known and unknown conditions, and environmental due diligence.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Thursday, January 16, 2025
- schedule
1:00 p.m. ET./10:00 a.m. PT
- Introduction
- The importance of well-drafted reps, warranties, and indemnities: potential environmental liability for buyers and sellers
- Pre-drafting considerations
- Environmental reps and warranties
- Purpose
- Frequently used reps and warranties
- Drafting considerations
- Sample clauses
- Role of reps and warranties insurance
- Environmental indemnification provisions
- Purpose
- Limitations
- Statutory limitations (e.g. CERCLA)
- Deal-specific limitations
- Drafting considerations
- Sample clauses
- Practitioner takeaways
The panel will review these and other important considerations:
- What recent regulatory developments make the drafting of comprehensive environmental reps, warranties, and indemnities more important than ever for commercial real estate buyers and sellers?
- What are frequently used environmental reps and warranties, and what pre-drafting considerations should be made to ensure these provisions best mitigate risk for both parties?
- What are best practices for drafting environmental indemnification clauses? What statutory and deal-specific limits on these provisions should counsel be aware of?
