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Environmental Indemnity in Real Estate Transactions: Allocating Risks of Potential Liability and Cleanup Costs

Negotiating Key Provisions, Drafting and Reviewing the Agreement to Ensure Complete Coverage

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Thursday, September 1, 2022

Recorded event now available

or call 1-800-926-7926

This CLE course will guide counsel for buyers, sellers, and lenders in real estate transactions on allocating environmental liability and structuring environmental indemnity agreements to ensure proper coverage for liabilities. The panel will examine key provisions and lessons from historical precedent and recent court decisions.

Description

The risk allocation of environmental liabilities in real estate transactions is often essential to the terms of the deal. There are several key issues to consider when negotiating risk allocation, liability release, and indemnity--whether a buyer or a seller. Even though indemnity provisions are some of the most common tools for allocating risk, they may also present many unforeseen pitfalls.

The First Circuit Court of Appeals' decision in VFC Partners 26 v. Cadlerocks Centennial Drive is an example of a line of decisions demonstrating that the specific language in environmental indemnity agreements is critical in real estate transactions.

Under that series of rulings, the specific language of the environmental indemnity provision--and not general concepts of indemnity--controls and determines whether particular costs or damages will be subject to indemnity.

Counsel to buyers, sellers, and lenders in real estate and other commercial transactions must carefully consider negotiation strategy options and know how to memorialize indemnity provisions to ensure coverage for potential environmental liabilities and cleanup costs (in some cases, to exclude coverage).

Listen as our authoritative panel discusses environmental release and indemnity agreements in transactions, including how the courts treat these agreements, as well as examines the key provisions to address. The panel will offer best practices for negotiating and structuring the contract and anticipating the potential for litigation post-closing due to challenges to indemnity claims.

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Outline

  1. Environmental indemnity agreements and court treatment
  2. Key provisions
  3. Negotiating and structuring the agreement

Benefits

The panel will review these and other key issues:

  • When is an environmental indemnity agreement necessary, and when is it not useful?
  • First-party release vs. third-party indemnification
  • What are the key provisions of the environmental indemnity agreement?
  • How do environmental indemnity provisions complement other real estate purchase and sale agreements?
  • What are the critical lessons from recent court decisions for structuring environmental indemnity agreements?
  • What are best practices for allocating environmental risks in real property transactions?

Faculty

Jessen, Polly
Polly B. Jessen

Partner
Kaplan Kirsch & Rockwell

Ms. Jessen’s practice focuses on the range of contaminated property redevelopment issues, including environmental...  |  Read More

Karlson, Cindy
Cindy J. Karlson

Founder
Law Offices of Cindy J. Karlson

Ms. Karlson focuses on environmental and land use law, including compliance counseling, transactional work,...  |  Read More

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