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Event Information:
Lenders, Landlords and Tenants - Avoiding Environmental Liabilities of Others

Date and Time:
8/7/2019 at 3:00 PM, Duration: 45 Minutes


When a borrower stops paying their commercial loan, lenders will begin a process of trying to work with their borrower restore repayment.  There are times when both the lender and borrower can agree on new terms and the loan is put back in good standing.   Unfortunately, there are other times when the lender needs to move towards foreclosure.  In this position, the lender is now facing the potential to be responsible for environmental liabilities of the real estate and proper action should be taken by lenders during the foreclosure process to avoid shifting this liability from their defaulting borrower. 

Lenders should avoid getting too involved in the day-to-day decision making of the defaulting business because if the wrong steps are taken by the lender during this time, the lender may be viewed as acting as an “owner or operator” of their defaulting client's site.  Likewise, landlords and tenants can find themselves in a similar position with respect to being responsible for the environments sins of others.  If either party is not careful during the lease, one party may find themselves responsible for the others’ environmental problems.  New tenants who lease space with a long history can be blamed for contamination left behind by prior tenants and landlords can be left to deal with environmental issues left behind by departing tenants. In order to avoid such situations, both parties should perform some level of due diligence prior to lease, during the lease and prior to lease termination.

This 60-minute training will provide the audience with an understanding of a). How lenders and landlords can become liable for their borrowers and tenants environmental liabilities, b). The court’s ruling against a lender in the matter of the State of New York and the New York State Department of Environmental Conservation v. HSBC BANK USA c).  Case studies of projects where tenants left landlords with significant environmental liabilities that either devalued the real estate and/or was addressed and paid for by the landlord d). Risk management strategies for both lenders and landlords to avoid the environmental sins of their customers.

About the Presenter:
Kent Johnson

Kent Johnson is the Transaction Program Development Manager with August Mack Environmental, Inc. in the Indianapolis office. He has more than 20 years experience with extensive knowledge regarding Brownfield site investigation and remediation, Phase II subsurface investigation, Underground Storage Tank (UST) removal and closure, groundwater monitoring sampling programs, asbestos and lead investigations and management, as well as indoor air quality investigations. Kent can be reached at 317.916.3177 or via e-mail at kjohnson@augustmack.com.


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