Environmental issues in commercial real estate often surface at the worst possible time during due diligence, right before closing, or after a lender flags something in the Phase I Environmental Site Assessment (ESA) report. These issues can delay a deal, scare off buyers, or expose sellers to long-term liability. At Kleiner Law, we help clients identify and manage environmental issues in commercial real estate transactions before they become roadblocks.
From reviewing environmental assessments to drafting legal protections, we guide buyers, sellers, and investors through deals that involve real property risk. If you’re working with a property that may have a history of industrial use, hazardous materials, or questionable soil or groundwater conditions, we make sure you know exactly what you're taking on.
Where Environmental Issues Typically Arise
Most environmental issues in commercial real estate show up in a Phase I Environmental Site Assessment, which follows the ASTM E1527-21 standard. That report may identify Recognized Environmental Conditions (RECs), historical concerns, or a need for further testing under Phase II.
Buyers often discover problems tied to prior land use, underground storage tanks, or even adjacent sites that share contamination risk. Sellers, meanwhile, may be unaware of lingering conditions from past tenants or outdated permits. These findings can trigger lender pushback or require environmental insurance, cleanup reserves, or contract restructuring before a deal can move forward.
How We Help You Address Environmental Issues
We don’t perform environmental testing. We take what your consultants and engineers find and help you respond strategically. That includes reviewing the Phase I or Phase II reports, identifying exposure points in your purchase agreement, and aligning the contract terms with the site’s actual conditions.
If the report triggers a concern, we help buyers request remediation plans, price adjustments, or indemnity language. For sellers, we draft clear disclosures and risk-shifting provisions that limit future claims. Either way, we ensure the deal reflects what’s happening on the ground, not just what the parties hoped would happen.
Our goal is not to slow down the process, it’s to ensure you don’t inherit liability or get stuck in endless back-and-forth with lenders or insurers.
Who We Work With
Our clients include real estate developers, private investors, portfolio managers, and commercial brokers. We’re often called in when a site’s history is uncertain, a lender has raised environmental questions, or a buyer or seller simply wants to tighten up the legal framework of a high-stakes deal.
Many of these clients are working with older sites—gas stations, warehouses, or light industrial buildings—or pursuing redevelopment opportunities that require a clean environmental bill of health. We step in early to ensure that the health check is not only understood but properly reflected in the legal documents.
Why It Matters
Environmental issues in commercial real estate affect more than just the dirt under your building. They influence the value of the property, your ability to finance it, and your exposure to long-term cleanup obligations. If the right disclosures or legal protections aren’t in place, you could end up responsible for problems you didn’t create.
These aren’t just legal risks—they’re business risks. Whether you’re buying or selling, you need to know what’s in the reports, what those findings mean under federal and state law, and how to structure your deal accordingly.
Resolve the Risk Before You Sign
When a Phase I report reveals red flags, it’s not the time to guess. You need clear, actionable legal support. We help you evaluate environmental issues in commercial real estate without delay. That means structuring purchase agreements that allocate liability clearly, defining cleanup responsibilities if needed, and making sure the transaction still works.
Even if the deal moves forward, the way it’s documented matters. Getting that wrong can cost you well beyond closing.
Contact Us
Do you have an environmental concern tied to your commercial real estate deal? Let’s get in front of it.
We help buyers, sellers, and investors understand environmental findings, allocate risk through contract terms, and meet closing requirements without unnecessary friction. Whether you're preparing for due diligence or in the middle of it, we’ll help you move forward with clarity. Contact Kleiner Law to schedule a consultation. You’ll get answers, not delays.
Some of the CRE matters we have experience in include:
- Negotiation of and execution of purchase agreements
- Resolution of due diligence matters
- Escrow issues
- Title issues
- Section 1031 tax-deferred exchanges
In addition, we provide our clients with professional assistance on the tax implications and structuring of real estate deals, including acquisitions, taxable and 1031 tax-free exchanges, sales, and commercial leases.
Testimonials
Juan POVINA
Stephen Legow
Peer Review
Amy Beenken
Valentina Tafurt
Dania Rodriguez
What is a Phase I Environmental Site Assessment (ESA), and why is it important?
A Phase I ESA is a standard due diligence report that evaluates a property’s environmental history and potential contamination risk. It’s typically required by lenders and can uncover issues like past industrial use, underground storage tanks, or neighboring contamination. It helps protect buyers from inheriting environmental liability and is often the first step in identifying risks.
