Commercial Investment Real Estate May/June 2017 | Page 40

Wind
W
Re
Resistant
Environmental liability risks
persist despite change in
administration.
nvironmentalism is so deeply embedded into the
U.S. culture — including its business culture —
that even a radical change in U.S. presidential
administrations won’t set it off course. Some
good business practice that commercial real estate profes-
sionals have adopted are susceptible to the political winds.
However, several signifi cant trends in the purchase and
sale of commercial real estate will be largely unaffected by
political change. These trends include the many sources of
environmental liability, the utility of environmental insur-
ance, the risk of criminal liability, after bankruptcy liability,
and the movement toward disclosure and transparency.
E
by Tom Mounteer
38
May | June 2017
When deal makers consider the environmental liability
risks that could arise in their transactions, blockbuster
federal statutes may come to mind fi rst. Remedies under
those federal statutes, however, are limited.
The statute commonly referred to as the Superfund law
allows recovery of only response costs incurred through
prescriptive rules. The federal cleanup statute that applies
to underground petroleum storage tanks provides only
injunctive relief — orders to remove a leaking tank and
contaminated soil — not monetary damages.
Under common law theories, damages include compen-
satory damages, lost profi ts, and stigma damages. That’s
why, despite the federal statutes, there remain frequent
negligence, trespass, and nuisance claims.
A few years ago, the U.S. Supreme Court ruled that
there could be no federal public nuisance claims directed at
carbon emissions contributing to climate change. Because
the U.S. Environmental Protection Agency indicated its
COMMERCIAL INVESTMENT REAL ESTATE
Beyond Federal Statutes