February 10, 2016 Article

Tips for Negotiating Environmental Risk Allocation Provisions in Leases for Non-Environmentally Sensitive Properties

The California Court of Appeal weighs in the issue in regard to retail leases

by Maryam F. Mujahid

Office buildings and retail stores do not conjure up images of impending environmental catastrophe. In fact, from an environmental perspective, these non-chemically intensive sites are usually about as low-risk as commercial sites come. However, it is important for a lessee to take certain precautions for even the most seemingly environmentally benign properties because these sites can have latent environmental liabilities that arise from contamination tied to a prior use or migrating from a neighboring site and that could lead to liability and litigation for the lessee down the line. For example, if liability for preexisting contamination is not explicitly addressed in the lease, the lessee may end up facing claims from owners of affected neighboring properties, other third parties, or even the lessor relating to that contamination. This article offers some tips to guard against these oft-underestimated environmental risks.

Premium Content For:
  • Litigation Section
    • Real Estate, Condemnation & Trust
Join - Now