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COMMERCIAL
OR: WHAT CAN PARTIES DO THROUGH THE TRANSACTION?
ARE THERE WAYS TO MITIGATE THE RISK FROM POTENTIAL
OR KNOWN ENVIRONMENTAL DAMAGE?
RY:
• Assign liability through contractual provisions
• Negotiate an escrow for cleanup costs
• Adjust sales price to reflect cleanup costs
• Consider additional “specialty” insurance such as:
• environmental
• pollution and/or remediation liability
• contaminated property development or others specialty
insurances
OR: WHAT SHOULD BUYERS SEEK REGARDING
DISCLOSURES, WARRANTIES, AND REPRESENTATIONS?
RY:
• Disclosures in the representations and warranties
• Breach of warranty or representation that the property contains
no existing environmental conditions can provide a mechanism
by which the buyer can rescind the contract
• That no contract clause should interfere with a legal requirement
to reports
The overriding issue for commercial agents is one of professionalism.
An unsophisticated buyer could sue an agent for failure to
make the buyer aware of conducting due diligence on environmental
issues. While there is generally presumption that commercial
buyers are knowledgeable about their investments, commercial
agents will want to minimize their risk of defending a costly suit and
potential reputational damage. Making buyers aware that they need
to conduct appropriate environmental due diligence can increase
the buyer’s confidence in you and reduce your probability of being
party to a complicated legal battle.
> Brenda Bray, Charles Rutenberg Realty, is a member of the Orlando Regional
Commercial Council. She can be reached at bbraysells@gmail.com. To learn more
about the Orlando Regional Commercial Council (it’s free to join) and its upcoming
events, visit orlandorealtors.org/commercial.
ORLANDOREALTORS.ORG/BIENNIALETHICS
orlandorealtors.org 17
/Florida
/commercial
/BIENNIALETHICS
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