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Hot Environmental Issues in Real Estate and Development

Hot Environmental Issues in Real Estate and Development. Peter E. Hapke Advocates Law Group www.advocateslg.com phapke@advocateslg.com 206-714-6444. Model Toxics Control Act (MTCA) Overview. Codified at Chapter 70.105D RCW Strict, joint and several, retroactive

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Hot Environmental Issues in Real Estate and Development

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  1. Hot Environmental Issues in Real Estate and Development Peter E. Hapke Advocates Law Group www.advocateslg.com phapke@advocateslg.com 206-714-6444

  2. Peter Hapke, Advocates Law Group Model Toxics Control Act (MTCA) Overview • Codified at Chapter 70.105D RCW • Strict, joint and several, retroactive • Three year statute of limitations from Ecology approval of cleanup • Status liability – owner, operator, generator, transporter • Prevailing party attorneys’ fees

  3. Peter Hapke, Advocates Law Group MTCA Sets Legal Agenda for Transactions Involving Contaminated Property or Assets • Forces investigation and cleanup • Forces parties to allocate environmental risk • Provides hammer of cost recovery lawsuit

  4. Peter Hapke, Advocates Law Group An Indemnity is Not a Release: A Cautionary Tale • Seller indemnified Buyer for three years and cleaned up the property, but did not get a release of MTCA or other environmental liabilities • Buyer discovered new contamination 15 years later when it began to develop property • Buyer sends PLP letter to Seller for MTCA cost recovery • Seller brought summary judgment asserting that Buyer has no statutory right under MTCA to recover from it • Superior Court grants summary judgment in favor of Buyer and Division I affirms

  5. Peter Hapke, Advocates Law Group Cleanup Approach May Impact Cost Recovery including Attorneys’ Fees • Taliesen v. Razore (144 P.3rd 1185 – 2006): Another cautionary tale • Kaiser Shipyard cleanup: “must be ecologically necessary and economically efficient

  6. Peter Hapke, Advocates Law Group As Seller do your own environmental investigation, even if Buyer does one • Trust and Estate cautionary tale • MTC – RCW 70.105D.020 (17)(iii) • Trustee liability • Trust and estate assets not protected • Trust/estate beneficiary liability: • MTCA is silent; CERCLA case law is persuasive authority • Best course is to distribute trust/estate assets ASAP per applicable probate law

  7. Peter Hapke, Advocates Law Group Seller’s Commercial Real Estate Disclosure of Environmental Conditions • Chapter 64.06 RCW • Buyer should specify time for Seller’s disclosure early in due diligence period • Buyer can waive disclosure, unless “yes” on environmental checklist • Buyer has right to rescind before closing • Buyer has common law remedies if Seller was dishonest in disclosure

  8. Peter Hapke, Advocates Law Group Residential Real Estate Disclosure of Environmental Conditions • Chapter 64.06 RCW – Form 17 • Similar analysis as commercial real estate rule • Leaking underground heating oil tank is issue • Grey v. Leach (244 P.3d 970 -- 2010) Court of Appeals essentially eliminates innocent owner and domestic use exemptions • Broadmoor home cautionary tale

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