Getting Ahead of the Deals Coming Your Way in 2012: Avoiding Pitfalls in Real Property

Over the past few years in-house legal departments have become more aware than ever of the myriad potential obstacles facing companies closing real estate acquisitions and dispositions. Contracts now contain many clauses intended to protect parties from liability and to address complicated environmental issues. This session provided concrete suggestions, that can be taken before a deal is done, to disclose, to investigate and to address these concerns head on. The panel provided the inside scoop on how these clauses are being negotiated in today’s market, what they should and should not say, and the extent to which they are enforceable. Attendees left with specific examples of how potential real property and environmental liabilities can be minimized.

Lee Gotshall-Maxon and Sandi Nichols, partners at Allen Matkins, discussed the following key topics include: 

• Limitations on liability, including post-closing damage limitations 
• Liquidated damages 
• Waivers, releases and indemnities 
• Automatic modification of representations 
• Deed restrictions limiting future uses of property 
• Independent consideration to enhance enforceability 
• "Quick" arbitration provisions to resolve defined disputes (e.g., who is entitled to the deposits?) 
• Scope and control of environmental investigations (including Phase I, Phase II, satisfying the "All Appropriate Inquiries" standard for CERCLA protection) 
• Evaluating and addressing vapor intrusion and mold risks 
• Minimizing and allocating environmental risks