Beyond Recognized Environmental Conditions (RECs): A Look At Business Environmental Risks (BERs) and Related Environmental Due Diligence Issues

This course will provide an overview of the environmental due diligence process as part of real estate transactions and explore Business Environmental Risks (BERs) that arise during due diligence. Specifically, the course will identify the most common BERs encountered in real estate transactions, along with technical and legal approaches to handling BERs.

The Phase I Environmental Site Assessment (Phase I ESA) standard practice guidance defines BERs as "a risk which can have a material environmental or environmentally-driven impact on the business associated with the current or planned use of a parcel of commercial real estate." Attorneys and investors involved in the purchase and sale of commercial property are familiar with the basic requirements of Phase I ESAs. When it comes to Phase I ESAs, sophisticated clients and counsel want to know one thing: what are the Recognized Environmental Conditions (RECs)? While it's important to know the RECs, particularly because they tell you if you potentially have a significant environmental issue on your property, not enough attention gets paid to BERs, which if ignored can completely derail an otherwise good investment.

In this program, Frank Cherena, P.G., Principal Geologist with Roux Environmental Engineering and Geology, D.P.C., and environmental attorney Jose Almanzar of Beveridge & Diamond, P.C.,  will answer these questions: 1. What are BERs and are they significant? 2. What are the most common and troublesome BERs? 3. What to do when a BER becomes a REC?

The course will also explore potential liability issues concerning BERs and the appropriate legal requirements when addressing certain BERs.

Learning Objectives:

1. Review the environmental due diligence process as part of real estate transactions, including legal requirements for Phase I ESAs and subsurface investigation
2. Explore technical and practical issues that arise whenever Recognized Environmental Conditions (RECs) and Business Environmental Risks (BERs) are identified during the Phase I ESA
3. Discuss the most common BERs that arise during the Phase I ESA process, and identify how attorneys and real estate investors/developers should handle BERs