The Role of Environmental Regulations in New York Commercial Real Estate Transactions

What is the Purpose of Environmental Regulations?

State and federal regulations are put into place to protect natural resources, prevent pollution, and minimize human activities’ negative impacts on the environment we share. We only have one planet, and we must do what we can to protect it. Just the same, however, sometimes these regulations get in the way of business and real estate transactions.

Environmental regulation laws cover a wide array of matters, such as water management, land use planning, air quality, and conservation. For those involved with commercial real estate transactions, these environmental regulations are meant to ensure that new construction and real estate projects do not harm the environment or deplete natural resources. Environmental regulations require developers to consider the environmental impacts before breaking ground and beginning work. The regulations also attempt to ask developers to find new practices that could limit the negative impacts on the environment or affect natural resources, wildlife, and the people who live there.

If you are involved in a commercial real estate transaction, it is strongly recommended that you retain professional legal counsel from an experienced attorney. Your legal representatives can assist you in compliance with all environmental regulations to pursue the most optimal outcome for your case possible. Contact our New York law firm to discuss your questions and concerns in a free initial consultation today.

What Are Potential Environmental Risks of Commercial Property?

Before a new real estate development project can get off the ground, it is often necessary to perform environmental assessments to identify potential risks associated with commercial properties. By identifying the risks early, you can make informed decisions about addressing the problems before they worsen and potentially derail your project.

Risks to the environment may include the following:

• Hazardous materials: it is essential to identify and address toxic materials such as lead-based paint or asbestos for proper handling and removal
• Groundwater and soil contamination: it is wise to assess soil and groundwater conditions to identify potential risks and contamination
• Historic uses: we recommend investigating all commercial property’s historical uses to uncover potential risks from past industrial or commercial activities

How Can New York Environmental Regulations Affect Commercial Real Estate Transactions?

Although environmental regulations are meant to benefit the environment and various ecosystems, they can sometimes make life more difficult for real estate development projects and those in the construction industry.

Compliance with environmental regulations can help the environment and the economy, but they often require additional upfront expenses, such as the hiring of experts, the implementation of mitigation measures, and the installation of environmentally friendly infrastructure. Commercial real estate developers must also set aside finances for ongoing monitoring and maintenance to ensure continued compliance with environmental regulations.

Sometimes, environmental regulations dictate changes in designs for commercial real estate properties or developments. For example, it may be necessary to adjust building heights, install solar panels, and modify a project’s structure or architecture.

Simply by adding the environmental impact assessment evaluation process and the need for subsequent approvals, the timeline for a real estate transaction can be lengthened. Environmental impact studies could take several months or even years to resolve, and such delays could affect profit margins.

Commercial real estate projects that have been scrutinized by state and federal environmental regulation laws could face opposition from local communities, neighboring properties, business owners, and environmental advocates. These interested parties could be concerned about the potential negative impacts of your commercial real estate project. It is often necessary for commercial real estate developers to negotiate with stakeholders to address their questions and concerns in hopes of a successful business venture.

What Are the Due Diligence Requirements?

Environmental due diligence is a standard part of all commercial real estate transactions in New York. Due diligence involves a thorough set of investigations conducted to assess the benefits and drawbacks of the proposed commercial property before any deal can be finalized. The due diligence process aims to uncover potential risks and negative impacts on the environment and assure all involved parties that the information provided is accurate.

This process will include scrutinizing the property’s historical uses, current environmental conditions, the conditions of the neighboring ecosystem, and compliance with regulations. Due diligence may also include title examinations, zoning assessments, structural inspections, and financial reviews.

What Are Environmental Impact Assessments (EIAs)?

Before any new commercial real estate project can be approved, developers must undergo a comprehensive evaluation process that includes an environmental impact assessment (IEA). The specific requirements for an IEA may differ depending on local legislation and laws. These studies are generally meant to evaluate how the proposed project may affect surrounding ecosystems, wildlife, and sensitive areas.

What Happens in Cases of Non-Compliance?

Compliance with environmental regulations is a legal requirement. Non-compliance could result in severe penalties, litigation, and damage to one’s reputation. To avoid the potential penalties of noncompliance, it is recommended to work with an experienced lawyer familiar with commercial real estate laws and environmental regulations in your area. Our law firm would be proud to represent your interests in pursuing a satisfactory conclusion to your real estate transaction.

Schedule a Free Consultation with Experienced New York Real Estate Attorneys Today

There are several environmental challenges involved in commercial real estate in the state of New York. If you do not comply with all relevant environmental laws, you could face severe penalties, leaving your transaction in doubt. In order to help ensure that you are on top of things, you are strongly encouraged to retain professional legal counsel from an experienced attorney. Our legal team would be proud to represent your rights and interests as you proceed through your commercial real estate transaction with all environmental regulations kept in mind.

To learn more about our legal services, please contact our Middletown, NY, law office to schedule your free case evaluation today. You can reach us at (484) 383-7790.