This is the next post in a series of articles discussing the importance of real estate counsel in commercial transactions in Tacoma or Olympia, Washington. My previous post discussed the role of an attorney in the due diligence process. A thorough inspection of all of the relevant documents pertaining to the property’s past and current status is essential to establishing the property’s value and potential risks. One essential element of a good due diligence process is to review environmental studies conducted on the property and the landscape, soil, geologic, and other environmental conditions of the property. This post will discuss some of the common environmental issues that arise in commercial property and investment property transactions. It will also emphasize the importance of retaining an experienced real estate attorney to identify the environmental risk areas. If you are engaging in the lease, sale or purchase of commercial property, contact my office today to speak to a lawyer.
Most commercial property owners are aware that there are multiple federal, state, and local laws and ordinances designed to protect the environment. These laws govern how businesses operate with respect to disposal of waste and pollutants. Some may not be aware, however, that purchasing or leasing property with existing environmental problems may result in the new owner or lessee having responsibility for the entire pre-existing condition. Under certain state and federal laws, current owners or tenants share equal liability with past owners for contamination, even if they did not have an active role in the initial prohibited activity. The failure to identify the problem before the purchase or lease can result in assuming significant liabilities.
More often, even pristine properties can have environmental conditions that limit their uses and value. A stream, lake or pond can require set backs on developments, restricting the location, size and shape of building footprints. These can often make good looking lots unbuildable, and can surprise buyers who bought them based on first impressions without conducting a due diligence review. Similarly, some historic uses of a property might not be allowed under current zoning code or critical areas rules. These can usually continue, as “grandfathered uses,” but do so under significant limitations on expansion or change of use. This can limit the growth potential of a project, often unexpectedly.
My Olympia firm has experience in commercial property and investment real estate transactions and the environmental diligence process. If you are contemplating buying, selling or leasing commercial property, contact my office today to speak with an attorney. The firm also services the Thurston County cities of Lacey, Tumwater, and Yelm, the Pierce County cities of Tacoma, Puyallup, and Lakewood, the Lewis County cities of Centralia, and Chehalis, the King County cities of Seattle, Auburn, Bellevue, Burien, and Federal Way, as well as other areas in Washington, including Grays Harbor, Mason, Cowlitz, and Pacific Counties.