NY Ethics Opinion May Erode Confidentiality for Sampling Results

Disclosure of Environmental Liabilities, Environmental Due Diligence / By

In April 2009, the New York Rules  of Professional Conduct (Rules) for attorneys replaced the New York Code of Professional Responsibility disciplinary rules (Code).  Section 1.6 of the Rules now governs the obligations of lawyers involving confidential information obtained during or relating to representation of a current or former client Rule 1.6(a) provides that a …

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Should a Vapor Encroachment Condition (VEC) Always Be a REC?

vapor intrusion / By

In a recent ASTM conference call, several consultants took the position that they could not envision a circumstances under which a “vapor encroachment condition” (VEC) identified pursuant to ASTM E2600-10 would not be a “recognized environmental condition” (REC) pursuant to ASTM E1527-05. I was surprised by this statement and therefore have decided to post about …

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CMBS Lender Kept In Case Over Questions About Environmental Disclosure

Lender Liability / By

The federal district court for the Southern District of New York denied a motion to dismiss filed by Morgan Stanley Mortgage Capital, Inc (MSMC)that it failed to adequately disclose environmental conditions at a shopping center and should not be required to buy back the $81MM loan. This case has some yummy nuggets. In this case, …

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NY Case Illustrates Why Borrowers Should Not Simply Rely on Lender Approval of Phase 1

consultant malpractice, Environmental Due Diligence / By

Lenders have long played a role as “surrogate regulator” in transactions. In many cases, lenders force potential borrowers to investigate suspected contamination and frequently require remediation under state oversight. Borrowers often balk at these requests any may even retain their own independent consultants to try to convince lenders that the work is not required or …

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State Court Decision Ilustrates Dangers of Inadequately Evaluating Neighboring HRECs

Environmental Due Diligence / By

The ASTM E1527 Phase 1 standard contains a term “Historic Recognized Environmental Condition” or HREC. The term was added to the standard in 2000 to provide a tool for consultants to help distinguish between properties where there was a release in the past that was satisfactorily remediated with sites that have historic contamination that have …

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State Appeals Court Affirms Damage Award Against Bank for Sale of Contaminated Property

Lender Liability / By

A New Jersey Appeals Court refused to disturb a $248,928 damage award against a bank involving a sale of contaminated property. The plaintiff had argued that the trial court had erred in calculating the damages flowing from the bank’s breach of contract. In Ritschel v. Spencer Savings Bank,SLA, 2011 N.J. Super. Unpub. LEXIS 1257 (May 16, 2011), …

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Consultants Survive Lawsuit For Negligent Investigation and Remediation of Brownfield Site

Brownfields, consultant malpractice, Environmental Due Diligence / By

Buyer agreed to purchase former oil field in 1996 to develop for residential complex.  Contract included 40 pages detailing  remedial obligations of parties. Buyer had five years to complete investigate of property and inform seller of contamination. If cleanup exceeded $30MM, seller could take over cleanup. Contract also provided that after completion of sellers’ corrective …

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Brokers in the Cross-Hairs For Environmental Disclosure

Disclosure of Environmental Liabilities, Environmental Due Diligence / By

With property values continuing to plummet in the wake of the Great Recession, it is probably not surprising that brokers are increasingly finding themselves embroiled in lawsuits over scope of environmental disclosure. The risk is particularly heightened in states with Property Conditions Disclosure laws. Common issues involve mold, lead-paint, asbestos, radon, poor drinking water quality and leaking home …

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$35MM Landfill Brownfield Project Derailed By Methane Gas

Brownfields, consultant malpractice, Methane Gas / By

Earlier this year, I discussed the BNY Mellon v Morgan Stanley Mortgage Corp where  the defendant/mortgage originator has been sued by the CMBS trust for a $80MM shopping center loan where methane gas issues led to a default. See detailed post at: http://lschnapf.blogspot.com/2011/07/cmbs-lender-kept-in-case-over-questions.html Now we have another case involving a $35MM development loan where a …

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