Ever had that sinking feeling

like an environmental compliance issue might torpedo your property deal or put you in the cross-hairs for liability?

Or worse yet,

ever had that feeling like environmental compliance issues were a “non-issue” with your property deal?
How confident are you that you can really tell the difference between these two situations?
With over 20 years in the environmental and natural resources arena, we’ve seen time and time again how most property owners (and their lawyers) are completely unable to tell the difference between these two situations. Why? Because they don’t truly understand how the environmental laws work, so they just “wing-it”, setting them up for environmental compliance issues.

Here are the 3 biggest mistakes People make with environmental compliance.

1) First mistake they make is they ignore real or potential environmental compliance issues … “if I didn’t know, then I can’t be liable.” ANSWER: Wrong. EPA loves it when owners play the “head in the sand” defense. Some of the most stringent laws on the books are environmental laws and many have penalties that can bankrupt most businesses. Regulators like EPA have very big sticks and saying you “didn’t know” is not a defense that works with them.

2) Second mistake they make is they rely upon “Bad” reports. Phase I ESA, environmental site assessments are a very precise document. If it is junk in, the report will be junk out. Without a good Phase I report, you’ll have no idea what your environmental compliance issues may be. What makes them a “Bad” Phase I ESA? Suffice to say, if you don’t have an environmental law expert review them, you will have no idea if it’s good or bad.

3) Third mistake they make is they rely upon lawyers who aren’t environmental law experts. Because environmental law is so specialized and because the penalties are so severe, even the best transactional or real estate attorney will be way over their head offering environmental advice and counsel on environmental compliance issues. And whatever you do don’t turn to your environmental consultant for environmental law advice! They may be great consultants, but they are not lawyers and can’t answer the legal questions around environmental law … again regulators love it when you make these types of mistakes.

Environmental laws are not to be taken lightly. Don’t risk it. Bring in an expert who can help you navigate these tricky requirements. And, as mentioned above, they can have serious consequences.

Here are a couple of examples of environmental compliance issues:

Phase I – You buy a property after looking at the Phase I, which says “No Recognized Environmental Conditions”. Turns out there was an old dry cleaner on the site 20 years ago, but the consultant missed that, or maybe they saw it but determined that it was a “non-issue” . The defense to liability under CERLA (Superfund) just vaporized. That’s just the tip of the iceberg. What about the Phase I that was performed by the seller? Can you rely upon that or is there a catch? What about the “shelf-life” of a Phase I, when can you reasonably rely upon “old information”? Does the Consultants conclusion mean anything to the EPA?

Liability – Contamination issues under CERCLA (Superfund) attach to owners and operators – so even if you only owned the land for a day, you are in the liability chain. And before you think that leaves you unscathed, think again. It can take years of litigation to establish your “innocence”. Even lenders can be held responsible if they involve themselves in the operations at the property. Best advice is to understand the risk before you can make a decision about buying or selling property. And the only way to get that is to use an environmental law expert, not consultants or real estate counsel.

Penalties: Under some environmental laws, penalties can be as much as $32,500 per day, per violation. From the date of the discharge until it is “removed” … which could be years. So for example, each time you discharge dirt into a waters of the United States that is 1 violation. Development projects can have 100s of discharges. And to make it even worse, each day that it stays in the water, that is another day of violation. Which means penalties can quickly overwhelm your business.

Michael Denby is the founder of Denby Law, PLLC an exclusive environmental and natural resources law firm in Phoenix, AZ focusing on regulatory compliance law for all the major environmental programs, CERLCA, RCRA, CAA, CWA, & TSCA. In his 18 years of environmental representation, Michael has written and presented on numerous environmental topics, sat on 3 gubernatorial appointments, and represented large and small clients before local, state and federal regulators. Learn more about Denby Law, PLLC or to contact the author click here www.denbylaw.com re