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I dont believe that the ancient doctrine of caveat emptor should
have a place in a modern society. It was more appropriate for an
agricultural society where there were not latent defects like chemicals in
groundwater or buried drums nor large corporations with enormous bargaining
power.
That was my point in bringing up UCC warranties, SEC disclosures and even
new home construction warranties. This approach has certainly humbled a giant
corporation like Toyota. But for the disclosure of the problems,
it would have business as usual. It was the disclosure that (dare
I say this) put the brakes to the problem.
However, in response to my esteemed friend, Barry, greater
transparency is one of the key tools being used in the green
building movement. California is requiring building owners to disclose
results of energy audits as are many cities such as New York. The idea is that
the sunshine that is cast on the previously hidden information will cause
building owners to improve their buildings or the market will punish them
by devaluing their properties.And let us not forget the proliferation of
property disclosure laws popping up in states for residential
transactions.
I see no reason why this modern trend should not be applied to
latent environmental conditions. There is nothing so special about
environmental conditions that should warrant continuing to allow for this
antiquated practice of allowing property owners to keep secret information they
have about historic environmental information about their properties. Mandatory
disclosure will even the playing field and not punish those whose aspirational
goals cause them to be more open than current required under law.
There are also good reasons on the other side of the ledger for promoting
greater disclosure. Think of all of the phase 1 and phase 2 reports that are
done for a property over the past 20 years. If this information was publicly
available, new potential purchasers or lenders could review this information and
use it to make more informed decisions if or where to sample. Think of
all the money that is wasted repeating work that may have been done half a
dozen times since the passage of laws like CERCLA.
So Barry, tag you're it :)
Larry
Law Offices
Lawrence P. Schnapf,
55 E.87th Street #8B
NY, NY 10128
212-756-2205
office
212-876-3189 home
203-263-5212
weekends
Larry@schnapflaw.com
www.schnapflaw.com
In a message dated 2/25/2010 5:54:06 P.M. Eastern Standard Time,
Paul@lqm.co.uk writes:
Dear
all,
from across the pond...
the system we have here in (olde)
England is 'buyer beware' (caveat emptor).
The principle being however
that if prospective purchaser asks vendor questions then they must be answered
truthfully and lying carries heavy criminal penalties. The law society ha
prepared a list of standard questions it expects lawyers to ask during the
buying process (conveyancing is the term we use over here). Of course one can
(and I would) go beyond these standard questions, if one wants to.
If
total protection of buyers is wanted (for both known and latent defects) this
can only be delivered by insurance or contractual indemities or some
combination.
fnally thank you to all (and especially Lenny) for a VERY
informative forum!
Paul Nathanail
University of
Nottingham
________________________________________
From:
brownfields-bounces@lists.cpeo.org [brownfields-bounces@lists.cpeo.org] On
Behalf Of Trilling, Barry [BTrilling@wiggin.com]
Sent: 25 February 2010
21:06
To: lsiegel@cpeo.org; Brownfields Internet Forum
Subject: Re:
[CPEO-BIF] [Fwd: EPA's March 17 listening session is an opportunity] from
Larry Schnapf
Larry defines the problem, apparently as he sees it with
AAI, as a failure to require information to be disclosed that
"allows the bad people to gain advantage over the people of good faith," and
goes on to compare the situation with a car manufacturer's duty to disclose
defects to purchasers, UCC express and implied protections, and SEC disclosure
obligations. Regrettably, his "disclosure" solution doesn't reach the bad
people and provides a disincentive for the people of good faith to attempt to
meet an important social, economic, and environmental problem.
AAI
requires the person of good faith to make efforts to discover environmental
problems. The 2002 CERCLA amendments also require the bona fide
purchaser to take reasonable steps to address the problems it discovers.
It provides no shield for either the bona fide purchaser or the property owner
if either attempts to conceal public endangerments. Larry, however,
would apparently impose an affirmative duty on any property owner who becomes
aware of a release or threatened release of a hazardous substance on his or
her property, regardless of its gravity or imminence, and whether or not it is
migrating or threatens to migrate off the property to make public disclosure
of that knowledge and would also require the potential property purchaser to
do so. This is a recipe for a very bitter meal, providing even further
incentive for the "bad people" to cover up and take no measures do discover
their problems and making the ability of the people of good faith who want to
remediate
properties and bring them back to productive use almost
impossible to achieve because of the potential for the process of cleanup and
development to be taken out of their hands or made pragmatically or
politically unachievable. The analogies to protecting consumers from
defective products and investors from fraudulent deals just do not
apply. Here the bona fide purchaser, rather than the community, stands
in the shoes of the consumer or investor, and AAI requires it to take steps to
protect itself. The community stands to benefit when that BFP remediates
the property to meet regulatory standards. Drive away that BFP and
the likelihood of remediation dwindles, if it survives at all. If the
BFP fails to remediate, then stringent enforcement should be the
consequence. The problem, as I noted in my earlier message
consists in the failure of agencies to undertake adequate enforcement and of
the professional community to insist upon adequate site
characterization.
As much as we want to protect the public from
exposure to hazardous substances, we won't get there by ignoring the facts
that get in the way of attractive and amusing, yet inappropriate and
inaccurate analogies.
The issue is not that real property is a
sacrosanct concept. The issue is how best to protect the public by
getting sites cleaned up most efficiently, safely, productively, and at the
least cost to the public. A system that encourages private sector
entities to do so, as AAI does, makes more sense than one that will drive good
faith volunteers away from the process.
Barry J. Trilling
W I G G I
N A N D D A N A
-----Original Message-----
From:
brownfields-bounces@lists.cpeo.org [mailto:brownfields-bounces@lists.cpeo.org]
On Behalf Of Lenny Siegel
Sent: Thursday, February 25, 2010 1:55 PM
To:
Brownfields Internet Forum
Subject: Re: [CPEO-BIF] [Fwd: EPA's March 17
listening session is an opportunity] from Larry Schnapf
From:
LSchnapf@aol.com
My dear friend Barry has such faith in his fellow
human beings. We have
laws because people won't do the right thing. I would
submit that sadly
the universe of people acting in good faith is extremely
small. The
problem is not incompetent consultants (and there are many) but
perhaps
because the owners, buyers and lenders don't want to pay for what
it
would cost to do a good investigation.
But I believe the real
problem continues to remain that the information
is not required to be
disclosed in most cases. In fact, that allows the
bad people to gain
advantage over the people of good faith that Barry so
passionately
defends.
And my other question is what is so special about real estate
that we
continue to have these archaic disclosure rules? Car manufacturers
can't
force consumers to buy cars as is (except maybe Toyota--sorry
couldn't
resist).The UCC contains all sorts of expressed and implied
protections.
Public companies have vast disclosure obligations under SEC
regulations.
We're no longer an agrarian society. It's a time our real
estate rules
conform to the transparency expected in the 21st century--and
that are
necessary to protect the public.
Lawrence P. Schnapf,
Esq.
55 E.87th Street #8B
NY, NY 10128
212-756-2205
office
212-876-3189 home
203-263-5212
weekends
www,environmental-law.net
Trilling, Barry wrote:
>
Lenny:
>
> I agree that this listening session will be valuable,
if for no other
> reason than to try to continue to clear the air with
regard to your
> insistence that the AAI Rule is part of the
problem. I'm afraid that
> you and Larry are using your
considerable persuasive talents and access
> to decision makers to
divert their attention from the real problems:
> first and foremost, is
the failure of environmental agencies (primarily
> on the state level)
to enforce the law against parties that are abusing
> the system.
Second, but also important, is the failure of the
> environmental
professional and legal communities to convey the message
> to their
clientele about the importance of strict adherence to both the
> rule
and the ASTM E1527-05. To impose additional new restraints on
>
good-faith volunteers who need a more level playing field to address
>
brownfield sites will discourage private cleanup activity and leave
the
> burden on government to take remedial action. This will
result in more
> time-consuming, more expensive, less comprehensive, and
less
> economically productive cleanup activity and will ill-serve
the
> constituents you sincerely want to benefit.
>
> The
AAI rule is not perfect-- my experience in its operation so far
> shows
very inconsistent observance of its dictates. Not surprisingly
>
there are still so-called "environmental professionals" out there who
do
> not appear to be meeting either the rule or the ASTM E1527-05
standard.
> EPA and professional organizations (both in the
environmental
> engineering/consulting and legal communities) should be
advising
> prospective purchasers about the importance of strict
observance of the
> standards and the trade press should advise the
community of developers
> and municipalities who rely on Phase I studies
to beware of "on the
> cheap" assessments. A good example of a bad
result that I've seen on
> more than one occasion recently is that of
the potential site purchaser
> who wants to be eligible for the bona
fide purchaser defense hiring a
> low-cost consultant (perhaps at half
the cost of a more conservative
> professional) to conduct a Phase I
assessment that I've had to send back
> after legal review as
insufficient. The additional legal fees expended
> for my review
and comment usually amount to substantially more than the
> potential
purchaser would have paid for a first-rate Phase I.
> Penny-Wise/Pound
Foolish. And for those unwise enough to commission a
> budget
assessment without legal review, the long term risk includes much
> more
dire consequences, including exposure as a CERCLA PRP. This is
not
> a problem that changing the AAI rules will cure,
however.
>
> I look forward to our discussions on March
17.
>
> Barry J. Trilling
> W I G G I N A N
D D A N A
>
>
> -----Original Message-----
>
From: brownfields-bounces@lists.cpeo.org
>
[mailto:brownfields-bounces@lists.cpeo.org] On Behalf Of Lenny Siegel
>
Sent: Tuesday, February 23, 2010 11:24 AM
> To: Brownfields Internet
Forum
> Subject: [CPEO-BIF] EPA's March 17 listening session is an
opportunity
>
> U.S. EPA's "Listening Session" on the All
Appropriate Inquiries (AAI)
> Rule, governing non-intrusive
environmental site assessments, is three
> weeks away. (9:30 a.m. to
noon on March 17, 2010 at room 1153 of the EPA
> East Building at 1201
Constitution Ave. NW, Washington D.C). I encourage
> participants in the
Brownfields Internet Forum, as well as others, to
> attend: to engage in
what I hope will be the first stage of a dialogue
> to improve the EPA
Rule, which was published in the Federal Register on
> November 1,
2005.
>
> I was a member of the Negotiated Rulemaking Committee
that developed the
> Rule, and I believe that it was a significant step
forward. The
> performance-based approach that forms its core is a
win-win solution
> that now helps to better identify potential
environmental problems with
> only minimal increases in assessment
costs.
>
> Nevertheless, except in states where there are
additional statutory
> requirements, the AAI process remains
unsatisfactory in terms of public
> notification that a site assessment
is being undertaken, public
> involvement in the collection of
information, and public disclosure of
> the results.
>
> It
is my hope that those elements of the Rule can be improved, be it by
>
revision of the rule, federal legislation, or state legislation and/or
>
regulation. I recognize that many well-meaning participants in
>
Brownfields redevelopment view such proposals as a threat to the
entire
> Brownfields process, likely to kill deals that lead to
additional
> environmental protection.
>
> I see the March
17 event as an opportunity to try to reach common
> ground, to bring the
public into the process without "killing the goose
> that laid the
golden egg."
>
> Before the Rule was finalized, I prepared a "A
Stakeholder's Guide to
> 'All Appropriate Inquiries,'" available
at
> http://www.cpeo.org/brownfields/SGAAI.pdf. It describes the rule
and
> offers the following summary of my concerns:
>
>
"Unless the Phase One is being conducted in compliance with another
>
environmental program, there is no requirement to ask for public
input,
> or even to notify the public that a site assessment is
underway.
> Furthermore, while the parties conducting the Inquiries may
conduct
> sampling to meet the assessment's performance objectives,
sampling is
> not required.
>
> "These limitations are
insignificant at most sites where there is no or
> little contamination.
But at sites where it appears that human health
> and the environment
are at serious risk, communities must demand that
> environmental
regulatory agencies become actively involved.
>
> "The Brownfields
concept, which uses the demand for property reuse to
> promote the
screening and remediation of blighted properties, can
> promote the
protection of human health and the environment. But unless
> affected
communities participate directly in the oversight of
> Brownfields
activities, they risk the likelihood that developers and
> local
agencies will simply sweep environmental problems 'under the rug.'
> The
... All Appropriate Inquiries rule can be a tool to ensure that
>
environmental protection accompanies property redevelopment, but this
is
> more likely to happen if the public is part of the
process."
>
> Lenny
>
> --
>
>
>
Lenny Siegel
> Executive Director, Center for Public Environmental
Oversight
> a project of the Pacific Studies Center
> 278-A Hope
St., Mountain View, CA 94041
> Voice: 650/961-8918 or
650/969-1545
> Fax: 650/961-8918
>
<lsiegel@cpeo.org>
>
http://www.cpeo.org
>
>
>
>
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list
> Brownfields@lists.cpeo.org
>
http://lists.cpeo.org/listinfo.cgi/brownfields-cpeo.org
>
>
>
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