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Environmental concerns and commercial real estate deals

Environmental regulations can impact real estate transactions. As noted in a publication in the Southwestern Law Journal, these regulations can result in restrictions and liabilities that stick with the property after a transaction is complete.

As such, entrepreneurs are wise to consider environmental issues like potential restrictions and liabilities before moving forward with a commercial real estate transaction.

Issue #1: Environmental restrictions

Two of the many specific protection programs that can result in restrictions to land use development include the National Flood Insurance Program and the Endangered Species Act. The former limits development in flood-prone areas and the latter limits development in habitats that are home to endangered species.

Issue #2: Potential liabilities

Business ventures should account for pollution and chemical regulatory programs. A wise investor will factor in costs to attain and maintain compliance.

Entrepreneurs should also consider the potential for liability when hazardous substances are, or have been present. These can take many forms such as  asbestos, leakage from underground storage tanks or other operations, or the presence of polychlorinated biphenyl (PCBs) from equipment like transformers or capacitors.

Protect your investment

Learn about the statutes, regulations, permits and other legal matters that guide environmental considerations plans before moving forward with a commercial real estate transaction or development plan. Sometimes an environmental audit is advisable to pinpoint potential areas of concern.

This is just one of many issues to consider when structuring and negotiating your deal. As such, it is wise to seek the legal counsel of an experienced commercial real estate attorney to better ensure environmental and other legal issues are addressed appropriately in the transaction.

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