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